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01 Mar 2010

Do You Really Support Recording Artist?

Listed under: Blog

During Grammy week, more than 20 artists signed a statement encouraging Congress to pass the controversial Performance Rights Act (PRA), a bill that would require radio to pay royalties to musicians for playing their songs. Artists who signed the statement during Grammy Week included Tre Cool, Mike Dirnt and Billie Joe Armstrong of Green Day, Anthony Kiedis, Chad Smith and Flea of Red Hot Chili Peppers, Stephen Stills, Kenny Aronoff, Sheryl Crow, Phil Soussan, Jackson Browne, Don Was, Dave Matthews, Josh Groban, Travis Barker, Andrea Bocelli, Apl.de.ap, Taboo, Will.i.am and Fergie of Black Eyed Peas, Drake, Mary J. Blige, Mick Fleetwood, Stevie Nicks, Nitty Gritty Dirt Band and David Foster. SoundExchange’s VP of New Media & External Affairs, Bryan Calhoun, wanted to share his viewpoint with BRE and explain about his organization SoundExchange and the PRA and what he thinks you haven’t heard. BRE welcomes responses and exchanges towards a healthy dialogue that expounds more on this subject.

Dear BRE Editor:
You may have heard about SoundExchange lately. SoundExchange is the non-profit performance rights organization authorized by the Copyright Office to pay recording artists and copyright holders when sound recordings are streamed on digital services like Internet radio, satellite radio, cable-TV music channels, and web simulcasts. When Pandora or SIRIUS use a track, they send a small royalty and their playlist records to SoundExchange, and we match that payment with the artist and copyright holder and then send them a check.

Part of our job is working with services that bring music to listeners. Through a variety of agreements with webcasters and broadcasters who simulcast, SoundExchange has been able to adjust the rates and terms set by the Copyright Royalty Board to better fit the business needs of many services. We’re proud of those partnerships, and we’re always here if you have questions about the law or how to keep your service in compliance.

Unfortunately, there’s been a political effort to mislead broadcasters and the public about SoundExchange to create confusion around a bill called the Performance Rights Act (H.R. 848). If passed by Congress, the PRA would mean that broadcast radio would pay performance royalties to artists and copyright holders, just like they do for songwriters and publishers.

Some have claimed that the performance Rights Act is a reaction to changing business models, but the call for this right has been around for more than 80 years. Frank Sinatra was a major proponent of the legislation in the 1970s. In 2010, the bill is closer than it’s ever been to becoming law. A coalition of artists and allies called MusicFIRST (Fairness in Radio Starting Today) is leading the charge, supported by the NAACP, Leadership Conference on Civil Rights, The Rhythm and Blues Foundation, A. Philip Randolph Institute, members of the Congressional Black Caucus, and thousands of your favorite artists.

Some big corporate conglomerates have been trying to scare small stations with threats of what the PRA would require. Here’s the truth: under the law, any commercial or nonprofit station that makes less than $100,000 annually will pay only $500 annually for unlimited use of music. That’s just $1.35 a day. Any station making between $100,000 and $500,000 annually will pay only $2,500 per year, and those making between half a million and $1.25 million will pay just $5,000. For stations making under $5 million a year, the payments won’t even start for three years, providing time to weather this economic storm. Three-quarters of all radio stations, including 90% of all African American-owned commercial music radio stations, would never pay more than $420 a month for all the music they can play. That makes the most culturally valuable intellectual property – music – also the least expensive.

This has been widely (and falsely) called a ‘tax,’ but not a cent would go to government. Fifty percent of the royalty would go to the performers who bring music to life and 50% would go to the copyright holder. The copyright holder might be a record label – large or small – or, in an increasing number of cases, the artists themselves, as more and more artists own their own master recordings. Should the PRA pass, broadcast royalties will be treated just as digital performance royalties are now: SoundExchange cuts a check directly to the artist that the label can’t touch. Just like large corporate broadcasters don’t always represent the interests of small stations, major labels don’t always meet the needs of independent artists. That’s why SoundExchange is a neutral, non-profit organization, with a board that’s half artist representatives, and half representatives of small, independent and major labels. We’re run by the people we serve, and we want independent artists and small broadcasters (our fellow ‘little guys’) to succeed.

In the meantime, there’s more we all can do to make sure royalties get where they’re going. If you webcast, please report the tracks you’ve played as accurately as you possibly can. Unlike other organizations, which use sample data to approximate royalty allotments, SoundExchange is working toward a census model – meaning we pay for each track played, every time it’s played. It’s by far the fairest way to compensate artists, but also puts pressure on services and stations to report accurately. Consider this: among the top 25 artists on our ‘unpaid list’ are: ‘Various Artists,’ ‘Playlist unavailable,’ and ‘unknown.’ Equally problematic are labels like ‘Promo only,’ and ‘Soundtrack.’ Poor reporting results in a huge amount of royalties we can’t send out – like suitcases full of money without luggage tags.

So, fellow music lovers, please provide accurate and complete data to SoundExchange for your webcasts and learn the facts about the Performance Rights Act. Together, we can help protect and reward the creators of the music, which is the backbone of our businesses and the soundtrack to our lives.

Bryan Calhoun

Vice President of New Media & External Affairs

SoundExchange

Some great info from BC on the PRA.

Paul Porter
Industry Ears