If you’ve been reading our newsletters - even infrequently - you’ll know that we’ve been following the radio payola saga for many years. Earlier this year, the FCC finally announced a payola settlement with the four major radio networks. As part of the settlement, the radio networks agreed, among other conditions, to air 4,200 hours of local and independent music on their stations. A pittance, really, but this meant that artists that have long been excluded from the airwaves in favor of payola-driven playlists might finally get a chance at some commercial airplay.
Clear Channel set up an online application for local and independent artists to submit their music for airplay on each of its stations. The applications are on a web page attached to each Clear Channel station website. See, for example, http://www.dc101.com/cc-common/artist_submission. Specifically, the contract states (as of 6/25/07):
"Royalty-free", "in perpetuity", "use, copy, modify, adapt, translate, publicly perform, digitally perform". Looks to us like Clear Channel is asking the artists to sign away their right to get paid a royalty just to allow Clear Channel to consider playing their music. Sure, artists may be comfortable signing away the rights to one song, but what if the song becomes a huge hit and it’s played 7 times a day on all the modern rock stations across the US? Believe us, that’s a LOT of royalty revenue that the artist would never see.
This story isn’t over. We’ve heard that negotiations are in the works to make this language more acceptable, so that independent artists can have a legitimate and fair way to access commercial radio without losing rights to their performance royalties in perpetuity. Stay tuned to our blog for updates.
FMC Press Release:
Clear Channel strips local, independent artists of digital performance royalties
Move runs counter to spirit of the payola settlementJune 22, 2007
Clear Channel: Swap Exposure for Royalties
Neda Ulaby, National Public Radio, June 22, 2007
Clear Channel Accused of Forcing Artists to Ditch Performance Royalty
Brooks Boliek, Hollywood Reporter, June 22, 2007
Did you tune into KCRW this past Tuesday only to hear….nothing? It’s not your cable connection. On Tuesday, thousands of webcasters participated in a "Day of Silence" as a simulation of what might happen to internet radio if higher webcasting rates go into effect on July 15, 2007.
The campaign is just one of the efforts that webcasters have been employing to protest the new royalty rates set by the Copyright Royalty Board in March. The royalties are paid to SoundExchange, which then distributes them directly and simultaneously to performers (45%), sound recording copyright owners (50%) and non-featured musicians (5%).
When the CRB published these rates in March, many webcasters - especially the small and noncommercial ones - claimed that this royalty rate was far too high, in many cases exceeding their available revenue. If the financial impact is as severe as stated by some small webcasters, these new rates could mean less music and more advertising or, even worse, stations going off the air altogether because they can’t afford to pay the new rates.
Over the past few months, webcasters have appealed the CRB for a rehearing (denied), filed an emergency stay in the courts (in process), and urged Congress to introduce legislation to amend the CRB decision. SoundExchange, for its part, has continued to support the published CRB rates. In late April both the House and Senate introduced the Internet Radio Equality Act, which would nullify the CRB’s rates and establish a "transitional" royalty rate of .33 cents per listener hour, or 7.5% of annual revenues.
Details about the bills here by Kurt Hanson
On the surface, the webcasters’ efforts - managed primarily by SaveNetRadio - have generated lots of visibility. The Inslee bill now has over 123 House co-sponsors, there are reports that Capitol Hill offices have been deluged with calls and emails about the issue and the House Small Business Committee held a hearing on the matter today, Thursday, June 28 (see details). FMC has filed testimony with this office.
But, it has also been reported in the Washington Post that it’s unlikely that Congress will be able to pass this bill, given everything else on its policymaking plate.
Where does that leave the webcasters? And, more importantly, what is the status of the royalty-rate setting process? And what does all this mean for musicians?
It likely means that groups of webcasters (small, noncommercial, college, large, etc) will rely on the results of direct negotiations with SoundExchange. Some of these negotiations are in the works, and we hope that all of them are completed before July 15.
While following this tumultuous process, FMC has reiterated four key points:
1. Internet radio is an incredibly valuable music platform for musicians, fans and labels
FMC supports the continued growth of internet radio. It has the unparalleled ability to develop loyal, worldwide audiences for niche musical genres — from 60s rock to contemporary classical to southern blues. Small and noncommercial webcasters in particular have proven to be a valuable promoter of both independent music and genres that are routinely ignored by commercial broadcasters.
2. Performers and labels should be paid.
We have and always will support the digital performance royalty As webcasting continues to grow, and as consumers increasingly trend towards paying for access to music delivered to them via subscription services, satellite radio, etc, the digital performance royalty becomes an even more important revenue stream for artists.
3. Rates proportionate to the size of the webcasters.
We also believe that the "one size fits all" approach that was part of the March 2007 rate setting decision would be harmful to the small and non-commercial webcasters. There’s a vast difference between the staffing and revenue generated by a volunteer-run internet radio station and an AOL or Clear Channel. These differences in resources and revenue - not to mention motivation for running a station - makes a tiered system the most sensible solution.
4. Streamline the reporting process.
FMC continues to believe that it’s important to develop a reporting process that ensures that even the smallest webcaster can file timely and accurate playlists with SoundExchange. For years we have urged the development of an authentication database, managed by a neutral third party, through which copyright ownership and performer information would be verified. Such a database would reduce filling time and errors on playlists, thus making sure more money flows directly to artists.
To summarize, FMC believes that large commercial webcasters should pay rates comparable to their size and revenue, and we call on the other parties to adopt reasonable rates and reporting requirements for clearly-defined categories of small, noncommercial and hobbyist webcasters that will ensure the future development of this medium.
In the end, whether through legislation, court action or negotiation, FMC hopes that the webcasters and SoundExchange can work together to strike a balance that recognizes the value of webcasting to creators and listeners, but also properly compensates performers and labels for uses of their work.
FMC’s Testimony to House Small Business Committee for "Assessing the Impact of the Copyright Royalty Board Decision to Increase Royalty Rates on Recording Artists and Webcasters" HearingJune 27, 2007
FMC Press Release: Congress should strike a balance on webcasting rates
June 27, 2007
Web Radio Stations Hope Silence Speaks Volumes About Fee Hike
Mike Musgrove, Washington Post, June 26, 2007
Web spinners and royalty collectors
Should webcast hobbyists have to pay like pros? Publisher Kurt Hanson and attorney Jay Rosenthal debate the economics of online music in a five-day series.Los Angeles Times, June 11-15, 2007
Last week, Congressman Mike Doyle (D-PA) and Lee Terry (R-NE) introduced something that FMC and others been advocating for a long time — a bill that would clear the way for the creation of low power FM radio stations in urban areas.
Given the shrinking playlists and bland programming brought about by radio consolidation over the last decade, low power FM has the potential to create radio that is truly radio: local voices, cutting edge music and genres that are not regularly heard on commercial radio. Or as Indigo Girl Emily Saliers said during a teleconference with the congressmen:
"This about the airwaves belonging to the American public. This is a way to realize the beauty and the differences. This is a way for communities to express themselves."
What’s most exciting is that the bill has a good chance of passing. The National Association of Broadcasters had argued (in opposing similar bills in the past) that low power stations would interfere with full power stations next door on the dial. That argument, however, has been demolished by a congressional commissioned study.
An MP3 of the press conference announcing the bill can be found here:
FMC’s Low Power Radio Fact Sheet
FMC Statement on Introduction of Low Power FM Bills
Doyle Bill Would Encourage New Low-Power FM Stations
Jerome Sherman, Pittsburgh Post-Gazette, June 22, 2007
New Measures Could Bring Influx of New Noncommercial Radio to the Airwaves
Prometheus Radio Project’s Hannah Sassaman on Democracy Now!, June 22, 2007
As we approach the second anniversary of Hurricane Katrina, roughly 3,000 musicians remain without housing in New Orleans. The number is staggering, but New Orleans proved once again you can’t keep a good city down and you can’t silence its music.
FMC was thrilled to partner with Air Traffic Control to organize the "Musicians Bringing Musicians Home II" benefit concert on Sunday, May 27 at New Orleans’ famous Tipitina’s Uptown. The Indigo Girls, Damian Kulash of OK Go, Jim James of My Morning Jacket, Pamela Z, Bonerama, and Al "Carnival Time" Johnson played in front of more than 400 fans to raise money for Sweet Home New Orleans, a coalition of non-profits that helps Katrina-displaced musicians find new homes.
The evening’s highlights included: The Indigo Girls playing some of their biggest hits with a full trombone section; OK Go’s Damian Kulash, sans treadmill, performing his band’s tracks with the backing of Bonerama; My Morning Jacket’s Jim James and singer-songwriter Matt Nathanson’s collaboration on "Every Rose Has Its Thorn"; Bonerama’s full-throttle take on "Helter Skelter"; performance artist Pamela Z’s mind-bending mélange of samples, theramin and soaring vocals; Al "Carnival Time" Johnson’s soulful "Lower Ninth Ward Blues"; and the entire group performing Al’s "Carnival Time" for a rousing finale. We should have photos and video up soon.
The concert raised more than $7,000 for displaced New Orleans musicians.
Visit Sweet Home New Orleans for more information about the organization, or to make a donation
If you missed the news, we will be back in Washington, DC on September 17-18, 2007 for our 7th Annual Future of Music Policy Summit.
As part of our effort to make the Summit as relevant, interesting, effective, and FUN as possible, we want to give you all - dear readers - a chance to weigh in on the proposed programming. Click the link below to visit a 2-question survey that asks you to pick the 8 most interesting panel ideas and the top 4 workshop ideas. It also gives you a couple of boxes to suggest other topics or specific panelists.
But you gotta act quickly: this survey will only be up until the end of Sunday, July 1. Then we’re moving into programming in earnest.
Click here to weigh in. And thanks!
Public Performance Right for Sound Recordings
Consider this. When you hear John Coltrane’s recording of "My Favorite Things" on the radio in the US, the estates of Richard Rodgers and Oscar Hammerstein - the composers of ‘My Favorite Things’ - are compensated, but the estate of John Coltrane is not. However, if you hear the same performance on XM or Sirius, or via a webcast, or on a cable music station - even on that terrestrial radio station’s webcast - both Rodgers and Hammerstein’s estates AND John Coltrane’s estate are compensated. Same performance, but why the different payments?
The difference is that US terrestrial broadcasters are exempt from paying a public performance right for sound recordings. Recently, a coalition of advocacy groups and artists has organized to lobby Congress to enact this performance right, which would mean royalties for performers and the sound recording copyright owner (usually the label) for terrestrial radio airplay. Congress did the right thing in the 1990s by establishing a performance right for digital transmissions (i.e. webcasts, satellite radio, etc), and now it’s time to level the playing field by having the performance royalty also apply to terrestrial radio airplay.
For seven years, FMC has consistently reiterated our view that Congress should establish a public performance right for terrestrial broadcasts that does not curtail the traditional royalties received by songwriters/publishers or unduly burden non-commercial broadcasters. We’ve discussed this important issue in congressional testimony, our two radio studies, fact sheets, and at our Policy Summits.
We are hopeful that satisfactory solutions will emerge to the complicated issues around webcast royalties, and then Congress can then turn its attention to the need to address this historic anomaly that has denied artists the compensation due to them from the spectacularly profitable broadcast industry. Webcasters pay this royalty, satellite broadcasters pay this royalty, broadcasters in almost all other countries pay this royalty - it’s time for US broadcasters to pay their fair share.
FMC’s Public Performance Right Fact Sheet
FMC letter to Senate Commerce Committee on Public Performance Right
Performers to Push for Radio Royalties
Los Angeles Times, June 15, 2007
Psst. Want a radio station?
The FCC is accepting applications for full power non-commercial educational (NCE) licenses for any qualified nonprofit organizations during a 7-day window this fall — October 12-19, 2007. What does this mean for you? If you or your nonprofit organization has ever dreamed of starting your own radio station, this is likely to be your last chance before all remaining FM spectrum is given away. Get started early on your application!
If you are already a nonprofit and want to see if this opportunity is for you, the first step is to find out if you’re in one of the 2,500-plus zip codes where there is spectrum available. Visit http://www.getradio.org and enter in your zip code.
If your zip code search was a success, read up on the application basics here, then contact FMC’s Full Power Project Manager Mike Janssen at fullpower [at] futureofmusic [dot] org (firstname.lastname@example.org). He can walk you through the application process, refer you to lawyers, and help you through every step of the process.
To learn more about this full-power window, read our Fact Sheet: http://www.futureofmusic.org/articles/FullPowerfactsheet07.cfm
FMC’s Rock the Net campaign - musicians supporting network neutrality - grows bigger every day, with more than 465 bands and 135 labels now signed on. Rock the Net has also hit the road as one of the supporters of Just Plain Folks Summer Roadtrip concert series that’s winding its way around the country. Here are some upcoming JP Folks Roadtrip dates:
Sun, Jul 15: Louisville, KY Pour Haus
Mon, Jul 16: Lexington, KY Woodsongs Old Time Radio
Tue, Jul 17: Charleston, WV
Wed, Jul 18: Roanoke, VA
Thu, Jul 19: Winston-Salem, NC
Fri, Jul 20: Charlotte, NC
Sat, Jul 21: Columbia, SC
Sun, Jul 22: Charleston, SC
Mon, Jul 23: Jacksonville, FL
Tue, Jul 24: Orlando, FL (Eustice) Venue Set: A Third Place
Fri, Jul 27: Tampa, FL
Sat, Jul 28: Tallahassee, FL
Sun, Jul 29: Athens, GA Venue Set: Nuci’s Space
Mon, Jul 30: Atlanta, GA Showcase Venue Set: Red Light Cafe
Tue, Jul 31: Birmingham, AL Venue Set: Birmingham International Center
Check out the details for these show and more at http://www.justplainfolks.org
Also read their FAQ on how you can perform at these showcases, http://www.jpfolks.com/forum/ubbthreads.php?ubb=showflat&Number=485183&page=1#Post485183
Please help us spread the word about Rock the Net by signing on to the campaign at http://www.futureofmusic.org/rockthenet/ and telling your friends, posting it on your website or blog and adding your concert dates.
Do you have health insurance? Our 2001 study of musicians and health insurance showed that 44 percent of musicians didn’t have any health insurance coverage. Our Health Insurance Navigation Tool (HINT) provides free telephone consultations and musicians-friendly advice on our website. http://www.futureofmusic.org/hint/
This summer, our health insurance consultant, Alex Maiolo, is hitting the road to talk with musicians one-on-one. If you’re in Chicago for Pitchfork Music Festival July 13-15, or Seattle for Bumbershoot September 1-3, please stop by our FMC table and say hello, or schedule a specific meeting with him by emailing him at /action/hint [at] futureofmusic [dot] org" OLDLINK>hint [at] futureofmusic [dot] org. Alex will also be at FMC’s Annual Policy Summit in Washington, DC, September 17-18, 2007. More appearances to be announced!
In mid-June we unveiled a weekly news round-up on our blog. To catch up on all the latest news, visit our blog http://futureofmusiccoalition.blogspot.com/ or better yet, add our blog to your RSS aggregator: http://futureofmusiccoalition.blogspot.com/feeds/posts/default.
And remember, blogs are two-way communication, so please feel free to comment on our posts!
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