New Congressional act to benefit artists and musicians!

Here are two articles from Billboard Magazine which interested me and I hope will interest those who frequent this site, especially musicians and anyone involved in the music business. The first covers a new Act in Congress which would force radio stations in the US to pay not just songwriters, but performers and musician for works played on the radio.

The second covers webcasting royalty rates.

As expected the Performance Right Act has been reintroduced jointly to Congress today with Senator Patrick Leahy (D-VT), chairman of the Senate Judiciary Committee, and Senators Orrin Hatch (R-UT), Dianne Feinstein (D-CA), Bob Corker (R-TN), and Barbara Boxer (D-CA) submitting it in the Senate, while in the House by Representatives, it was sponsored by Rep. John Conyers (D-MI), chairman of the House Judiciary Committee, and Representatives Howard Berman (D-CA), Darrell Issa (R-CA), Marsha Blackburn (R-TN), Jane Harman (D-CA), John Shadegg (R-AZ), and Paul Hodes (D-NH).

While radio already pays songwriters for songs they broadcast over the air, the bill would require royalties to also be paid the artists and musicians performing the songs and master recordings copyright owners, as well.

The latter payment is common in other countries and has already been enacted in the U.S. for Webcasters, satellite radio, cable radio services and all other non-terrestrial broadcasters.

Upon introduction of the Performance Rights Act in the Senate and House of Representatives, music FIRST executive director Jennifer Bendall, said in a statement, "Today marks the beginning of the end for corporate radio's loophole."

"It's unfair, unjustified and un-American that artists and musicians are paid absolutely nothing when their recordings are played on AM and FM radio," she added.

Grammy winner Sam Moore noted, "American broadcasters literally earn billions by playing our records. All we ask is to receive what artists in every other civilized country around the world receive when their recordings are broadcast - fair compensation for the performance of our work."

American Federation of Musicians of the United States and Canada (AFM) urges Congress to pass the Performance Rights Act because "The overwhelming majority of performers are not rich, but hardworking men and women trying to make a living," AFM President Tom Lee said in a statement.

Besides the U.S., only a few countries do not provide a fair performance right on radio, including Iran, North Korea and China. Since the U.S. doesn't have a performance right, foreign stations do not have to pay American artists when their music is played on stations around the globe.

A2IM President Rich Bengloff labeled the bills sponsors "true friends of the music community who understand that creators of music and those that invest in its creation should be compensated for their work. As the manufacturing and service industries have moved offshore, the need to support those in the United States who create intellectual property has never been more important to our economy."

But radio station owners, with the the National Assn. of Broadcasters leading the fight, oppose the bill. "Local radio broadcasters consider this fee a 'performance tax' that will not only harm your local radio stations, but will threaten new artists trying to break into the business as well as your constituents who rely on local radio," NAB president and CEO David Rehr, said in a statment. "Although the proponents of H.R. 848 claim this bill is about compensating artists, in actuality at least half of this fee will go directly into the pockets of the big record labels, funneling billions of dollars to companies based overseas." Three of the four largest record label conglomerates -- Universal Music Group, Sony Music Entertainment, and EMI -- are internationally-based. "Although the big record labels have seen their revenues decline over the last decade, local radio broadcasters are not the reason the recording industry is losing money, and it should not be the industry to fix it," he added.

NAB said a measure opposing today's Congressional action is expected to be introduced shortly.

Likewise the Radio Free Alliance said, "Congressman Conyers' re-introduction of a performance tax bill on local radio is disappointing, especially since the bill doesn't reflect the views of the majority of his colleagues. Last year, the more than 226 members of Congress stood with local radio in opposing any measure that would tax local radio to benefit the big, foreign-owned labels. Especially in the dire economic times we all face, any measure which will threaten the family-supporting jobs of more than 125,000 people employed by radio, the more than $6 billion in local community support of non-profit and service organizations, and the ability to introduce more diversity in station ownership is a short-sighted approach and bad public policy."

But the proposed legislation accommodates small broadcasters, public and religious radio stations, according to a musicFirst press release. For example, small commercial stations would pay only $5,000 per year; while noncommercial stations such as NPR and college radio stations would pay only $1,000 per year; stations that make only incidental uses of music, such as "talk radio stations, would not pay for that music; and Religious services that are broadcast on radio would be completely exempt."

The legislation also is written to ensure that a new royalty wouldn't impact songwriters and other copyright owners, the press release said. The legislation provides for the rate to be negotiated between impacted parties, or set by the Copyright Royalty Board, and paid to SoundExchange, which will distribute payments accordingly.

On the latter issue, NMPA president and CEO David Israelite said in a statement, "The National Music Publishers' Association has proposed a concept called, "One Music", urging the entire music community to be supportive of each other regarding the value of music. Therefore, we support the efforts of Chairman Leahy and Chairman Conyers in introducing this bill. We are pleased the bill introduced today includes some protections so songwriters are not harmed in the process of fairly compensating performers and record labels - a must for any such legislation.

"We will continue to work closely with lawmakers and our partners in the music industry as this legislation moves through the process to make sure songwriters are not adversely affected."

SOURCE




SOUNDEXCHANGE ROYALTY RATES

With the Feb. 15 deadline to reach a compromise on webcasting royalty rates approaching, SoundExchange has made a new settlement offer to small webcasters, Billboard.biz has learned.

Under the terms of the deal, different rates are being offered to different webcasters, depending how much revenue the company makes and how much traffic it receives, according to documents obtained by Billboard.

The deal takes a tiered approach to both the minimum per-channel fees and the royalty rates owed for music played on Internet radio. The smallest group of webcasters are defined in the agreement as "microcasters" -- those who make less than $5,000 a year, with expenses of less than $10,000 a year, and with less than 18,067 total aggregate tuning hours.

This group would pay only an annual minimum payment of $500, plus a $100 "proxy fee" in lieu of providing reporting data on which songs they play to cover SoundExchange's costs of administering the payments without such data.

Webcasters with gross revenues less than $50,000 a year are offered a $2,000 minimum payment per year, while those with gross revenues of more than $50,000 would pay $5,000 as a minimum payment. Webcasters with annual transmissions totaling less than 5 million aggregate tuning hours a month would pay either 10% of their first $250,000 in gross revenues and 12% of any revenues over that, or 7% of all expenses for the year -- whichever is greater.

Webcasters with transmissions that exceed 5 million aggregate tuning hours a month, or with annual revenues of more than $1.25 million a year, would no longer be considered a small webcaster and as such would have to pay the statutory commercial webcasting rates.

What's more, the deal is being offered through 2015, and retroactive from 2006. That would resolve both the dispute over the current rate structure handed down by the Copyright Royalty Board in March of 2007, as well as avoid renegotiating those rates for the next rate period, which begins in 2011. Webcasters agreeing to the deal would not be able to participate in any proceedings to determine rates for the next rate period or petition Congress to overturn the existing CRB decision.

The offer resembles that made in 2007 to small webcasters, which was based on the small webcaster settlement act of 2002. While SoundExchange says more than 40 small webcasters accepted the deal, many others didn't because the terms applied only to music by SoundExchange members. Although SoundExchange represents about 95% of music copyright owners, webcasters who refused the plan were concerned that it didn't cover the remaining 5%.

This new deal is being offered under last year's Webcaster Settlement Act, which makes it binding on all copyright owners.

A SoundExchange spokesperson confirmed the offer, saying, "SoundExchange is firing on all cylinders trying to get as much accomplished by the Feb. 15 deadline."

But representatives from the webcasting community are less enthused with the offer. Several pointed out that under the deal, smaller webcasters who sell their company to a larger one that does not qualify for the discounted rates would suddenly owe the full statutory rate retroactively to 2006. The buying company would have to pay those rates, which would represent a serious obstacle to any potential acquisition.

Also singled out for scorn is the 5 million cap on aggregate tuning hours a month. Several small webcasters who meet the $1.25 million revenue exemption find themselves awfully close to that traffic limit, which would make them ineligible for the deal. They would prefer a limit of closer to 10 million aggregate tuning hours a month, or none at all.

"We're disappointed with the offer," says Rusty Hodge, founder of SomaFM. "It effectively is worse that the previous [one]. Basically SoundExchange has done nothing to comprise with webcasters at all."

SOURCE