performance rights

Pandora scored a clear, and sharply worded, summary judgment from U.S. District Judge Denise Cote, enabling the Internet radio service to continue "performing" (streaming) works included in ASCAP’s entire inventory.

The ruling refutes ASCAP’s attempt to narrow Pandora’s right to perform portions of the ASCAP-represented publishers catalog, when the publishers choose to withhold certain rights. In this case, the publishing arms of EMI Music, Sony/ATV, and Universal Music tried to pull their new-media rights representation from ASCAP, in order to negotiate directly with digital platforms such as Pandora.

Cote's decision spells it out like this: "So whether ASCAP purports to categorize Pandora as an 'applicant' or a 'licensee,' Pandora's right to perform the compositions in the ASCAP repertory extends to all of ASCAP's repertory and ASCAP may not narrow that right by denying Pandora the right to play the songs of publishers who have withdrawn new media licensing rights from certain songs while keeping the songs in ASCAP's repertory to be licensed for performance by other music users."

Pandora’s response to the decision noted "the attempt by certain ASCAP-member publishers to unfairly and selectively withhold their catalogs from Pandora." ASCAP’s response noted "the true value of songwriters' and composers' performance rights, a value that Pandora’s music streaming competitors have recognized by negotiating rather than litigating with creators of music." Both notes noted.

Yesterday’s ruling is a stepping stone to the Pandora/ASCAP rate trial before the ASCAP federal rate board, in a process that arbiters the terms of a blanket license when negotiations fail. That trial starts on December 4.

Recent reports indicate that Apple's plans for launching a customizable Internet radio service have been slowed by difficult negotiations with rights holders -- both labels and publishers. 

At one time Apple had reportedly hoped to make its Internet radio service part of the iPhone 5 launch. When dragging talks with labels and publishers made that impossible, the company planned to launch around Grammy Awards last month. Now The New York Times says Apple won't likely come to market until summer or later.

The company wants to preload an app on iPhones and iPads to deliver customized music streams, free-to-use and supported by its iAds platform.

The New York Post reports that Apple reportedly offered to pay record labels "about 6 cents per 100 songs" -- roughly just half what Pandora pays. ("Songs" here means "performances," that is, a single song streamed to a single listener.) Record labels, which are in most cases the owners of copyright sound recordings, want Apple to pay "at least" the statutory streaming rate of about 21 cents per 100 performances. (Broadcasters pay slightly more than the "pureplay" statutory rate to stream sound recordings.) Some analysts say Apple is learning that it no longer has the negotiating weight it once did when Steve Jobs and the company first launched the iTunes download store.

Apple also needs to negotiate with publishing/composition rights holders. In this area, talks are reportedly snagged by Sony/ATV, which recently withdrew digital rights from ASCAP and BMI (which led to a big increase in what Pandora pays). See more in RAIN here and here.

Read coverage from The New York Times here and the New York Post here.

A new draft bill from U.S. Representative Jerrold Nadler (D-NY; pictured) aims to raise AM/FM streaming royalty rates, in effect implementing an over-the-air performance royalty. It would also potentially raise royalty rates for satellite and cable radio to the same levels as those for Internet radio.

Nadler's bill, dubbed the Interim FIRST Act and currently in "discussion draft" form, would "put cable and satellite radio services on the same royalty-setting standard as Internet radio," reports The Hill. That would mean switching cable and sallelite from the 801(b) standard, to the "willing buyer/willing seller" model currently used to determine web radio royalty rates.

Additionally, the Interim FIRST Act would "make traditional radio stations pay a higher fee for live-streaming their broadcast online." Nadler intends for this extra free to "make up for broadcasters not paying a fee when they play artists' songs over the air," writes The Hill.

That extra fee would wind up being what the Copyright Royalty Board decides "most clearly represents the royalty that would have been negotiated in the marketplace between a willing buyer and a willing seller for the public performance of sound recordings by means of over-the-air non-subscription broadcast transmissions by affiliated terrestrial broadcast radio stations," reads Nadler's draft bill (Section 3).

Technically, it's not royalty on over-the-air radio. But it amounts to paying a royalty for over-the-air (plus the streaming royalty) if a station also chooses to stream.

An over-the-air performance royalty appears to be the overall goal here. Comments from the musicFIRST Coalition seem to explain the Interim FIRST Act's name: "The only real solution is for Congress to create a legal performance right, but raising terrestrial radio’s digital royalties is an important interim step towards that goal." Said Nadler in a statement: "The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair. We can’t start a race to the bottom when it comes to royalty rates and compensation for artists."

As for changing the standard for satellite and radio platforms from 801(b) to "willing buyer/willing seller," how much of a difference will that really make? While we'd have to wait for a determination from the Copyright Royalty Board to definitively answer that question, consider this: satellite radio operator SiriusXM pays around 8% of its revenues for the right to use copyright sound recordings in its broadcasts, based on a determination using the 801(b) standard. Pandora, on the other hand, says nearly 70% of its total revenue (based on its Q1 FY 2013) will go to royalty payments (and that's based on on a deal Pandora struck that actually decreased its obligation from the CRB decision -- a decision based on "willing buyer/willing seller").

In July, we reported on (here) separate in-progress legislation from Rep. Jason Chaffetz (R-UT). That bill also aimed to bring more equality to radio royalty rates, but did so by potentially lowering web radio rates by determing streaming rates using the 801(b) standard.

Nadler says Chaffetz's bill -- which has Pandora's support -- could potentially "hurt performing artists." Not surprisingly, the musicFIRST Coalition has voiced support for the draft bill while the NAB opposes it.

You can find the discussion draft version of Nadler's bill here (PDF). The Hill has more coverage here.

Canada's CBC and the international Audio-Video Licensing Agency have announced an agreement that will enable the launch of a new CBC digital music service. The broadcaster plans to increase the online availability of its radio programming, including via on-demand services. 

Meanwhile, AVLA has also forged a deal with Canadian webcaster and digital music company Mediazoic for "reproduction" rights. (For its webcasting operation, Mediazoic has an agreement with Re:Sound to cover performance rights. Re:Sound is Canada's non-profit that licenses recorded music for public performance, broadcast, and digital.) In addition to their own webcasting operation and record- and radio-production facility, Mediazoic creates software tools for third-party organizations who wish to offer their own customized Internet radio stations. Renowned personality Alan Cross is currently a Mediazoic host.

AVLA represents the copyrights of more than 1,000 record companies and copyright owners, including majors Warner Bros., Sony, and EMI. Mediacaster Magazine reports AVLA members "own or control the copyright to most of the sound recordings and music produced, distributed and heard in Canada. It can license both the broadcasting and reproduction of members' audio and video recordings in Canada...

"Both AVLA deals are seen as clever and imaginative business propositions, and among the first such negotiated collective licenses in Canada for on-line streaming and podcasting of radio and online digital music programming," Mediacaster writes.

Read Mediacasters' full coverage here.