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Music Industry Pushes Congress for Copyright Reform

Various factions seem to coalesce support behind one omnibus bill

Calls are mounting in the House of Representatives for one, large bill to address music licensing reform.

“Consumers don’t know the button they push on their car dashboard or smartphone dictates whether artists are paid,” for that song, said New York Democrat Rep. Jerrold Nadler during today’s hearing on copyright reform.

Nadler is referring to the patchwork of laws governing compensating music artists whether the song they produced is aired on satellite radio, terrestrial radio or Internet radio. That’s why he’s working on one music omnibus bill, to bring “fairness and efficiency to our music licensing system, and ensure that no particular business enjoys a special advantage against new and innovative technologies,” he said in a subcommittee of the House Judiciary Committee.

Music representatives brought up the issue of mandating a performance right on terrestrial radio. The Recording Academy President/CEO Neil Portnow said “we should remember who the authors of music are,” rattling off a list that included performers, producers and studio engineers. Low streaming royalties are preventing songwriters who create Internet music from making a living, he said, and NAB has “spent a lot of money retaining their free ride,” referring to radio’s lack of a performance royalty.

Broadcasters counter that they already pay music licensing fees to performance rights organizations ASCAP, BMI and SESAC, and should not be mandated to pay for music rights twice. Broadcasters also point to the benefits to artists that station airplay and station promotion bring.

Little of that was discussed today, though former broadcaster and now Texas Republican Rep. Blake Farenthold, reminded his colleagues on the Courts, Intellectual Property and the Internet Subcommittee that radio stations are running a business. And while the music industry is struggling to make the transition from the higher profits garnered from sales of physical records and CDs to lower profits from digital music sales, radio stations are struggling too “with the same forces. There’s no way a radio station is getting compensation from [music played on] Pandora. Historically, radio is highly regulated,” and has limited bandwidth and limited room for expansion, Farenthold said. He did mention that the industry provides a way for new music to be exposed.

Witnesses spent much of their time explaining how much money they’re losing because of what they say are arcane copyright laws and asking for lawmakers to look at revamping the entire music copyright system, possible creating a platform-agnostic system.

Nashville Songwriters Association International President Lee Thomas Miller said it took him 11 years to get a hit song on the radio, however nine out of 10 of his colleagues don’t write songs anymore because they can’t make a living based on the royalties they receive. Miller receives “a thousandth of a penny” for Internet radio performances.

Mechanical reproductions used to be dominant, but now only make up “a quarter of our revenue,” said National Music Publishers Association President/CEO David Israelite. The current royalty rate per song is about nine cents, which would be about 50 cents per song if adjusted for today’s inflation, he said.

BMI CEO Michael O’Neil said “We’re locked into a [copyright] model that might have been appropriate when the Beatles came to America, but not now.” BMI seeks to replace the current copyright rate court with an arbitration model and believes consent decrees should sunset when their basis no longer exists.

Jim Griffin, managing director of OneHouse, called himself the “geek” of the hearing for his tech experience. He said the industry needs to create a giant database to properly track all songs so that every person responsible for each song is paid the proper royalty.

Also, each song should have a unique identifying code, said Griffin, who notes that today’s system of using an artist’s name or song title doesn’t work because of spelling variations.

Radio in all its forms gets a chance at the table on June 25 when the second panel is slated to testify on the topic.