IRFA

Musician in HuffPo: Neither Congress nor RIAA wants to tangle with NAB, so webcasters are punished

Thursday, January 24, 2013 - 11:50am

Writing about the Internet Radio Fairness Act, musician David Fagin points squarely at the "one-sided, unfair exemption terrestrial radio currently enjoys" on royalties, and says the solution is to "make them pay their fair share of performance royalties to artists and labels -- just as the rest of the radio-playing world has to do."

Fagin is also a writer and producer and former member of the band The Rosenbergs, and represented independent artists in webcasting copyright hearings in 2001.

In a piece for the Huffington Post, he suggests IRFA foes are really on the same side when it comes to wanting to artists to succeed and get paid, and on the matter of FM radio's royalty exemption. But the music industry and webcasters are stuck fighting each other, because neither has the power to fight broadcasters. 

"Congress is scared to go after big radio and their lobby, and the RIAA is 'just fine' with the status quo. In the meantime, both sides have decided to just kick each other's asses, instead."

(Interestingly, he holds that the current royalty situation is harming the webcasting industry, evidenced by the fact that just a single "brand-name" success exists, Pandora. He also cuts through the music industry anti-Pandora rhetoric: "The 'fleecing of artists'... argument makes no sense, whatsoever. Why would a company, whose main business model consists of promoting independent artists over 60% of the time, and is practically the only place to hear new music on a regular basis, want to destroy the very artists whose careers it's sustaining, and who are sustaining it?")

Interesting read, in Huffington Post, here.

Recording Academy head hails end of 112th Congress as Fairness Act defeat

Thursday, January 3, 2013 - 12:45pm

Recording Academy president and CEO Neil Portnow sent the following e-mail to members today the conclusion of the 112th U.S. Congress, to which the Internet Radio Fairness Act was introduced. It should be easier to read here (and you can click on his links).

We've extensively covered the IRFA here. You can also see our coverage (and link to written witness testimony) of the House Judiciary Subcommittee that met on this matter in November (to which Portnow refers) here and here.

Internet Radio Fairness Act's final result will have "huge impact on radio's future," says tech blog

Wednesday, January 2, 2013 - 12:05pm

Among tech blog ReadWrite's "The 5 Most Pivotal Moments for Digital Music in 2012": the introduction of the Internet Radio Fairness Act [We covered this extensively in 2012.].

The Internet Radio Fairness Act (IRFA), among other measures, would require Copyright Royalty Judges, when determining royalties for web radio, to use the same legal standard (known as 801(b)) they use for satellite radio and cable radio royalties. Under current law, CRB judges are instructed to try to set royalties at a "fair market value," using a legal standard known as "willing buyer willing seller." This has led to the current state of affairs in which webcasters like Pandora pay many times the royalty of other types of digital radio when expressed as a percentage of revenue.

"Whatever happens with the IRFA as it was originally drafted (many predict its demise), something needs to give, and that something will have to balance the need for innovation with the rights of those who create music for a living," says ReadWrite. "The end result of the debate that kicked off in 2012 will have a huge impact on radio's future."

See all 5 of ReadWrite's "Most Pivotal Moments" here.

Academic's math shows Pandora pays sound recording royalty at 10 times the rate of UK radio

Wednesday, December 12, 2012 - 12:10pm

We've heard (at the recent House Subcommittee hearing on the Internet Radio Fairness Act for one, but elsewhere too, and often) the recording industry:

  • doesn't like the amount of royalties streaming services pay to play copyright recordings, and wants more;
  • really doesn't like that U.S. broadcasters don't pay at all; but should, like the good folks of the non-U.S. broadcast world.

So, how much does, say, a UK radio broadcaster pay to play a copyright sound recording per listener, and how does that compare to other services, like Spotify or Pandora?

Enter David Touve (you may remember him as the Washington and Lee University Assistant Professor of Business Administration who estimated that U.S. broadcasters would owe the recording industry $2.5 billion a year if they were required to pay at the webcasting rate here).

Using data from PPL (which collects royalties from UK radio) and RAJAR (which measures listening), and estimating 12 songs per hour, Touve estimates "the value of a single radio play to a single listener in the UK for only that portion of the royalties that are paid to record labels, featured artists, and performing artists" is £0.000073, or $0.00012.

"For comparison, I believe the value estimated above is 1/36th the rate reported by Zoe Keating ($0.0042) [Touve's referring to this] for her receipts from streaming music services (e.g., Spotify), 1/10th the rate ($0.0011) paid by Pureplay Webcasters in the U.S. (e.g., Pandora), and 1/18th the CRB-established default Webcaster rate ($0.0021) in the U.S."

Put another way: Pandora currently -- under the settlement "discount" rate -- pays at a rate ten times what UK radio pays to perform sound recordings.

(The difference in audience size between Pandora and the broadcast industry of a country like the UK, much less the U.S., naturally means the recording industry's take from broadcasters will be much larger. But what Touve is putting in high relief is the discrepancy between the rates.)

Read Touve's latest Rockonomics blog entry here.

Clear Channel announces new on-air/streaming royalties deal with music group

Thursday, December 6, 2012 - 1:25pm

Clear Channel has forged another music rights deal that likely trades a small payment for on-air play for a discount (or waiver) for online streaming.

Broadcasters aren't required to pay royalties to the owners of sound recording copyrights for on-air play -- but do pay owners and performers for online plays. The music industry has long bemoaned radio's sound performance royalty exemption.

Back to last week's Internet Radio Fairness Act House Judiciary subcommittee hearing (here's audio of it)... Hubbard Radio President/CEO Bruce Reese (who also represented the National Association of Broadcasters) was pressed repeatedly on this topic (our coverage is here). Reese responded by saying he would look for more deals in the marketplace that would get copyright owners paid. He was nearly certainly referring to arrangements that Clear Channel has struck this year with copyright owners like Big Machine Label Group, Glassnote Entertainment Group, and Naxos.

Clear Channel today adds to that list, and announced an agreement with DashGo, Inc. "a digital content distribution and marketing engine for labels, podcasters, and artists." Like the prior agreements, Clear Channel described the deal as an "agreement that will help drive growth and innovation in Internet radio. As part of this new relationship, DashGo will share in Clear Channel’s terrestrial broadcast revenues, aligning the business interests of both companies and helping to build a sustainable market in Internet radio."

DashGo represents over 100 label and artist partners (Weezer (pictured), Rock Mafia, Coconut Records, Delicious Vinyl, and Time Records) and approximately 100,000 songs.

Corker of Tennessee urging opposition to IRFA in Senate

Wednesday, December 5, 2012 - 12:20pm

The Hill reports Republican Sen. Bob Corker of Tennessee is circulating a letter in the Senate strongly critical of the Internet Radio Fairness Act (IRFA), a bill proponents hope will make Internet radio royalty fees more equitable to those of similar forms of radio (read more on the IRFA here).

While the IRFA would simply give Net radio the same royalty-setting standard (known as "801(b)") as cable and satellite radio, Corker's letter says the bill would "force American property owners and creators to provide a subsidy to digital radio services, primarily Pandora." Leading webcaster Pandora currently pays more than half of its revenue for royalties, while cable and satellite radio pay less than 15% of revenue.

The Hill points to the Center for Responsive Politics site (here), which shows "As a senator for Tennessee, Corker's constituents include representatives from the country music hub of Nashville. Corker received $201,241 from the TV, movie and music industries during the 2012 election cycle."

Read more in The Hill here.

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