RAIN 11/13: IRFA foes slug it out on Future of Music panel

Paul Maloney
November 13, 2012 - 12:45pm

When it comes to an issues as complex and contentious as copyright, artist compensation, and fair business, maybe real clarity was simply too tall an order. A panel with four intelligent and strongly-opinionated players whose top goal is to advocate their position (and not necessarily educate an audience) arguing for 40 minutes was doomed to (as they say) generate more heat than light.

Truly the Future of Music Coalition put together a great panel of speakers (as well as a truly terrific day of content). Unfortunately, as it goes with issues like this, it's arguable whether any audience member was able to come away with a cooler or clearer head.

Today's discussion at the Future of Music Summit event in Washington, D.C. focused on the Internet Radio Fairness Act. Arguing against the bill was musical artist and University of Georgia lecturer David Lowery, Assc. General Counsel of the AFM Patricia Polach, and SoundExchange General Counsel Colin Rushing (the latter two are pictured at right).

CEA SVP/Government Affairs Michael Petricone and AccuRadio founder Kurt Hanson (publisher of this news source) spoke in support of the bill.

[The chief objective of the IRFA, a bill that's been introduced to both the House and the Senate, is to require Internet radio sound recording royalties, when determined by the government, to be based on the legal standard known as 801(b). 801(b) requires the government to consider the effects of its decision on the public's access to copyright material and the businesses involved, and is the standard used for satellite radio and cable radio royalty rates. Critics of the IRFA prefer the current "willing buyer willing seller" standard -- unique to Internet radio -- which they say leads to royalty rates based on a "fair market value" for music.]

Perhaps most frustrating was the lack of any real back-and-forth on the actual merits of the 801(b) versus the "willing buyer willing seller" standards.

For instance, panelists arguing against the IRFA suggested that it's not logical to change the royalties standard "used by thousands of webcasters" to one used "by only two services" (SiriusXM and Music Choice) -- ignoring the fact that those two companies represent two entire industries (satellite radio and cable radio). Additionally, Rushing and Polach asserted that "willing buyer willing seller" determinations are fair because they truly represent some objective and universal "fair market value" for music. Hanson tried to demonstrate the absurdity of this by suggesting the fair market wouldn't pay fifty cents for his cat that he values at thousands of dollars, but no one seemed interested in following his logic. Rushing and Polach simply complained that advocating for 801(b) was asking for a "below market rate."

In fact, an audience member tried to get panelists to address "just what is it that's wrong with 801(b)," as it's the same standard used to set rates that record labels themselves pay for musical compositions. The only response to this point came from Rushing, whose argument came down to "mechanicals (royalty rate settings) are very different."

Undoubtedly farthest afield were the arguments from Lowery (the second photo has Hanson on the left, Lowery on the right). Concentrating on the bill's less-publicized points (we covered David Oxenford's excellent piece regarding these here), he seemed more intent on being provocative than logical. He argued that the IRFA's measures that remove "the precedential effect" of past royalty decisions on future decisions would be "killing my free speech" and "muzzling artists." His claim is that the IRFA isn't even about rates, "this entire bill is about 'agency capture' -- broadcasters taking over copyright."

The understated Petricone assured Lowery that truly objectionable details could be ironed out in the committee process, and weren't call for abandoning the entire bill.

We understand Backbone Networks (which is streaming the Summit live) will soon post archived audio of the panel. We'll let you know where when they do.

Paul Maloney
November 13, 2012 - 12:45pm

The Cox Media Group has officially announced its support of the Internet Radio Fairness Act (details of the bill are here) that would move Internet radio royalty determinations away from the controversial "willing buyer willing seller" standard to the more widely-accepted 801(b) standard.

"We believe the current royalty system for Internet radio actually hinders its future and growth," CMG Director of Communications Andy McDill said. "Cox Media Group strongly believes in a vibrant Internet radio marketplace, where artists, broadcasters and our listeners benefit from a sustainable rate setting process."

Other broadcast groups supporting the bill include Clear Channel and Salem Communications. Other supporters include webcasters like Pandora, Radio Paradise, and AccuRadio; plus groups like the Consumer Electronics Association and the Computer and Commmunications Industry Association.

While the NAB hasn't explicitly signed on as a supporter of the IRFA, when the bill was introduced the group said it "strongly supports legislative efforts to establish fair webcast streaming rates. NAB will work with the bill's sponsors and all interested parties to create broadcast radio streaming rates that promote new distribution platforms and new revenue streams that foster the future growth of music" (here).

Read more in Radio Online here.

Paul Maloney
November 13, 2012 - 12:45pm

Former Chicago radio smooth jazz programmer and talent (and former AccuRadio smooth jazz programmer!) Rick O'Dell has launched his new SmoothJazzChicago.net service. It features live on-air personalities, and music from "one of the largest music libraries of smooth jazz in the world."

Chicago has been without an on-air smooth jazz outlet since April (and even then it was on the low-powered 87.7 frequency), a victim, O'Dell says, of Arbitron's Personal People Meter system.

"Terrestrial radio gave up on the format," O'Dell told Chicago media columnist Robert Feder. "No other format was as materially altered — and ultimately wounded — by the PPM as smooth jazz... Not a single one of (Chicago's) stations showed any interest in doing smooth jazz full-time... essentially, PPM scared them off. I decided I couldn't wait for a miracle to happen."

O'Dell is banking on listeners' passion for the music to generate the necessary listening to run the ad-supported venture.

Read more from Feder here.