Will Artists Lose Royalties From Satellite Radio?

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2 comments posted

Wow! Where do we start? I'm

Submitted by Shawn Brock (not verified) on August 18, 2011 - 4:33pm.

Wow! Where do we start? I'm not one for fueling the roomer mill, but this morning I spoke with a long time ally at Serious-XM. This fellow is a program director over there and is always a good source of information. He stated to me "off the record", that they would no longer be spinning records which they didn't have a direct deal for through the labels. He said that this would be the new protocol in short order, and that I could "take that to the bank".

Before the merger it seemed easier to get music added on both Serious and XM. Now its a little more of a challenge. Lots of singles are on the Billboard charts that are never added over there... That's frustrating to me not only as a musician, but as a listener and subscriber. I have noticed over the last year or so that the repetition of the playlist is getting a little redundant, and somewhat reminiscent of today's FM.

I'm sure that like me a lot of you depend on income from Sound Exchange to help you provide for your families. It seems that we will be suffering a large hit soon.

This news is sure to spark a lot of questions about the past. You may start thinking about those records you put out years ago on other labels, you know, the ones you never got paid a dime for? When Sound Exchange came in, you started seeing money from those old records. Wasn't that great? Now all of that money will go to that old record company, the one which you probably don't have an agreement with in regards to digital streaming. So what will happen there? What will happen with those records which were released on labels which went out of business? We all have questions, and it will take some time to get answers I'm sure. You can count on one thing though, the money will be cut off long before we get answers.

After being in this business all of my life, I'm considering a change. At some point an artist has to sit down and think about it. We sell fewer records now, get fewer bookings, and the ones we get we are under priced. I can't say that I'm making more money per show now than I was 10 years ago... When you add it all up, it almost don't seem worth it. Just when the independent artist was starting to be excepted into that snobby society of Serious-XM, Soundscan and all the others, someone comes along and starts to pull the plug. Its a dark and gloomy day!

When all is said and done we must remember that this is what we do. Its easy to quit, but in the end we know we won't. We'll struggle and complain, and itch to put out another record and play another show. Its in our blood, and nothing changes that. We do need to think about how we are going to move forward though, and come up with new ideas for the future. Perhaps $3000 and up for radio promotion isn't worth it anymore?

The language of the 1995

Submitted by Anon (not verified) on September 8, 2011 - 8:03pm.

The language of the 1995 statute creating a performance right in digital sound recordings specifically sets the percentage of income to each recipient: 50% to the owner of the sound recording copyright (usually the label), 45% to the featured artist, 2.5% to AFM musicians, and 2.5% to AFTRA recipients; thus, a label cannot reduce the artist's share of this income to something closer to the artist's record royalty rate without contravening the statute. In addition, the statute has always provided that the licensee (in this case, Sirius XM) is to pay the owner of the sound recording copyright (usually the label) and the "featured recording artist ...shall be entitled to receive payments from the copyright owner of the sound recording in accordance with the terms of the artist's contract." In other words, whether Sirius licenses the sound recording through SoundExchange or directly from the label, this has no effect on the statutory rights of the record company and the artist to share in resulting income under the Digital Performance Rights in Sound Recordings Act or the amount of those shares. If the record company can validly recoup recording costs against the artist's share of digital performance income in the absence of SoundExchange, it could equally have recouped those costs against artist income flowing through SoundExchange...by simply requiring that the artist's share be directed and paid to the label. The point is, the record companies HAVEN'T insisted on receiving the artist's share, but instead agreed to appoint SoundExchange as the universal collection agent and that both artist and record company should each receive their respective shares directly. If the labels now reverse this decision in the absence of SoundExchange, it won't be because any artist rights disappeared or label rights have been magically increased. It will only come to pass because this provides a convenient opportunity to change the current custom, re-examine the statute against the label's right of recoupment, and, at a minimum, earn some additional interest by holding the artist's share for some period. In the era of the 360 deal, this kind of move wouldn't even be surprising.

The real danger in eliminating SoundExchange, however, is the significant loss of bargaining power in the ongoing conversation with Sirius, which will work against both the record companies and the artists. A record company that negotiates directly and on behalf of only itself is vulnerable in a way that a collective bargaining agency is not and may soon find its income reduced by virtue of all the "promotional benefits" generated when a sound recording is played on satellite radio. Given Sirius's added administrative burden in negotiating all these direct deals, one has to assume that it's counting on some big pay-off down the line. Unfortunately, the cost of that pay-off to the record company will likely outweigh any small benefits it gains from direct collection. If the labels imagine that a direct deal with Sirius will increase the size of their slice of pie, they need to look again. What good is a bigger piece of a quickly shrinking pie?

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