A showdown between new technology and the musicians who provide the product is looming in congress with a bill that would greatly adjust the royalties paid for the broadcasting of copyrighted music.
Musician's Perspective on Pandora
HR. 6480 and S. 3609, also known as the Internet Radio Fairness Act, is aimed at setting a level playing field between streaming radio, satellite and cable radio and terrestrial radio. Currently, performance royalties for the songs being played are set by a three member panel of judges at the Library of Congress with today’s rates set at about 50% of revenue for internet services and 10% for satellite and cable. A long standing agreement means that regular radio stations pay no royalties.
The fledgling streaming radio market has seen some relief from the overly high percentage through intervention by congress in 2008 and 2009 but those temporary bills have expired, moving the rate back to the 50% level. For more information on the streaming industries beliefs, see the article posted by the Electronic Frontier Foundation.
Unfortunately, the reduction of the streaming rates without some compensating move in the amount paid by satellite, cable and regular radio stations would result in a loss of income to musicians. That is why a group of over one hundred artists have come together petitioning congress to vote against the Internet Radio Fairness Act.
The musician’s letter:
We are big fans of Pandora. That’s why we helped give the company a discount on rates for the past decade.
Pandora is now enjoying phenomenal success as a Wall Street company. Skyrocketing growth in revenues and users.We celebrate that. At the same time, the music community is just now beginning to gain its footing in this new digital world.
Pandora’s principal asset is the music.
Why is the company asking Congress once again to step in and gut the royalties that thousands of musicians rely upon? That’s not fair and that’s not how partners work together.
Congress has many pressing issues to consider, but this is not one of them. Let’s work this out as partners and continue to bring fans the great musical experience they rightly expect.
Among the veteran artists signing the petition are Bryan Adams, Alabama, Greg Allman, Blondie, Jackson Browne, Jimmy Buffett, George Clinton, Robert Cray, David Crosby, the Doors, the 5th Dimension, Vince Gill, David Gilmour, Amy Grant, Warren Haynes, Don Henley, Bruce Hornsby, Mick Hucknall, J. Geils Band, Billy Joel, John Paul Jones, Mick Jones, Journey, Jim Kerr, Kiss, Megadeth, Graham Nash, Stevie Nicks, Night Ranger, Ted Nugent, Pink Floyd, Robert Plant, Pointer Sisters, Bonnie Raitt, Martha Reeves, Rush, Dave Stewart, Survivor, George Thorogood, Toto, Butch Trucks, Frankie Valli and Bob Gaudio of the Four Seasons, Dionne Warwick, Roger Waters, Bobby Whitlock, Otis Williams, Ann and Nancy Wilson, Brian Wilson and BeBe Winans. A similar group of modern artists have also signed on.
There are certainly good arguments coming from both sides of the issue. Perhaps it is time that congress and/or the review board realize that terrestrial radio is no longer the promotion machine for music that it was earlier in the era (the reason for their royalty free use of the music) and all of the rates be adjusted to a uniform amount that would give new and veteran artists an equivalent amount of income for their work.
