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Due
R-E-S-P-E-C-T
The
March edition of CRUMBS Night Out is happening, well, tonight
(if you’re reading this on Thursday, March 26) at the Linda
Norris Auditorium on Central Avenue. The fun starts at 7 with
a set from Albany’s Sea of Trees, riding the release of their
debut album Animal Sounds. At 8 the music biz panel
of myself, attorney Paul Czech and our old pal Peter Iselin
will talk about how songwriters make money, at least hypothetically!
You’ve seen the names ASCAP, BMI, and SESAC, but do you know
what these organizations do?
On a related note, there’s some legislation before Congress
you should know about, and if you ask me, you should support
as well. The House Judiciary committee recently held hearings
on bill HR 848, legislation with the droll name “The Performance
Rights Act.” The bill provides for the creation of a “performance
right” for sound recordings. And what does that mean, you
ask?
Well, I’ll tell you. Until 1972, the federal copyright laws
didn’t protect sound recordings. Compositions—the songs—had
been protected since the 1800’s, but records, nope. If somebody
bootlegged an album, a record company would have to chase
the pirates around the state courts and rely on a patchwork
quilt of state statutes and common law to get justice. It
was awful. Then in 1972, Congress finally got around to dealing
with the issue, and was faced with a huge push-back from the
broadcasting industry. You see, traditional copyright gives
the copyright holder rights not only in making copies of a
work but in the performance of the work as well. So
by giving copyright status to sound recordings, the record
companies would then be able to demand payment for the non-private
playing of records, like on the radio.
The broadcast lobby prevailed on Congress to make a bizarre
exception to the law, to create federal copyright protection
for sound recordings, except with no performance right. The
given rationale for this odd little law was that since radio
airplay promoted the sale of albums, radio shouldn’t
be expected to pay record companies a royalty in addition
to providing a nice promotional service. Never mind that for
every other type of creative work, the performance right is
perfectly OK, whether the performance promotes sales of copies
of the work or not. The broadcast lobby convinced Congress
that recordings were different.
So, ever since we’ve had this weird situation where radio
stations pay songwriters royalties for playing music
on the air but not the record companies/musicians. So when
you hear “Respect” on the radio, Otis Redding gets paid, but
not Aretha. Dumb, huh?
But wait, it gets dumber. In the 1990’s, the Internet came
along, and the broadcast lobby was afraid of competition from
the internet and satellite radio, so they convinced Congress
that digital transmission of recordings were different
than terrestrial radio, and created a performance right for
digital radio. That’s right. Webcasters and satellite radio
now pay royalties to not just songwriters, but record companies
and musicians as well, while broadcast radio continues its
free ride.
One nice aspect of the digital royalty program is that record
companies get 50 percent of this revenue, while the featured
musicians on the recordings get 45 percent, and back-up musicians
get 5 percent. For many musicians, who either signed bad deals
or have been otherwise ripped-off by their record companies,
this digital performance money is the first they’ve seen since
getting paid maybe a measly advance or session fee.
Meanwhile, every other country in the civilized world has
long collected performance royalties on recordings from radio.
But none of these countries will pay U.S. record companies
or performers any of this money, because we don’t collect
these royalties for their artists.
The Performance Rights Act seeks to rectify this, to create
a performance right and royalty stream for terrestrial (broadcast)
radio performances of sound recordings, to bring us in line
with the rest of the world, and to compensate record companies
and musicians for the use of their works. The old argument
that “radio promotes sales” is looking pretty weak these days,
since there ain’t much sales of recorded music going on, radio
or no.
The broadcast lobby is, as you’d expect, apoplectic over the
bill, appealing to the ignoramuses among us by labeling the
performance right royalty a government-imposed “tax” of good
all-American business. Nonsense. It levels the playing field
with digital radio, it brings us into conformance with the
rest of the world, and in-so-doing it loosens up millions
of dollars all over the world that should be flowing to U.S.
record companies and musicians. It’s long overdue.
—Paul
Rapp
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