Wednesday, February 18, 2015


This article originally appeared in the 2.19.15 issue of Metroland

            In my last column we talked about the Flo & Eddie lawsuit seeking performance right payments for pre-1972 recordings.  The lawsuit is going very well for them, and as I explained, it highlights what a putrid and stupid mess copyright law has become, especially regarding music.  If you wanna go back and review the article now, we’ll wait.

            Tap tap tap... OK, on the same day my article ran, the Copyright Office (the federal agency that oversees all things copyright) issued a 250-page report entitled Copyright and the Music Marketplace, calling for a massive restructuring of how music is licensed and how musicians and songwriters get paid.  Sort of.   I think.

            When the report came out on February 5, everybody in the music biz trumpeted its existence.  A few hardy souls even made cursory comments about whether it was good or bad, based apparently on what is contained in the 13-page executive summary of the report.  Since then it’s been radio silence all around.  None of my go-to sources have said a peep, and I could find only a small handful of obscure blogs have attempted to sort it all out and explain the report comprehensively.

            I think a lot of this has to do with the complexity and mundaneness of the issues.  I’m not sure it’s possible to sit down and read the entire report without losing one’s mind and entering a state where violence and substance abuse seem like the only answer.  Heck, that’s how I felt after just reading the executive summary.  But let me try to, in the space allowed, impart at least a little of what I think is going on here.

            First the report recognizes that the current system is broken.  There are rules that date back to the days of player pianos, there are internet-specific rules that were made before anyone really realized what the internet was and what it could do, there are distinctions made that are artificial and nonsensical, and there is a tendency for secrecy among big players that benefit the big players at the expense of everyone else.

            The report explicitly recognizes this, and notes that consumers are rapidly switching from owning music (CDs and downloads) to accessing music through streaming services (like Spotify and Pandora) and how the current and outdated structure of payments doesn’t compensate musicians and songwriters at nearly the same rate as before. The report appears to suggest a consolidation of rate-setting under a single tribunal at the Copyright Office, and an effort to treat various types of music delivery (radio v. streaming v. physical delivery) as functional equivalents (which they are) and give them equivalent pricing structures.

            That sounds good to me.  We’ve now got a situation where the license fees from radio / TV/ nightclubs, etc. to ASCAP and BMI are set by a couple of federal judges, the price of using a song on a recording is set by Congress (if you’re using the entire song) or by private negotiation (if you’re using part of the song), and where Pandora pays marketly different royalties than Spotify, simply because Pandora won’t play the specific song you feed it (it only will play similar songs) while Spotify does.  It’s really just plain dumb.  And expensive.  And unpredictable.  It makes sense to have all this set by one dedicated body that has the expertise to do it.

            There were a number of other specific proposals that were good.  Like extending federal copyright protections to pre-1972 sound recordings.  This would take care of the multitude of issues we discussed last week arising from the Flo & Eddie litigation.  Like imposing on broadcast radio a performance license for sound recordings, which would put broadcast radio on par with the various forms of digital transmissions, would provide performers with a much needed income source, and would free up for US musicians foreign airplay performance royalties that are currently being withheld by foreign performing rights groups because the US (almost uniquely in the civilized world) refuses to pay them.  Like transparency in licensing and music use.  The most valid complaint about Spotify is that it doesn’t disclose how it determines its pay-outs.  Does anyone know how ASCAP whacks up its money?  Shouldn’t musicians know who is listening to their music, so better to whip up marketing strategies?  The report suggests that market participants disclose huge amounts of information about the deals they make, where the music goes, and the calculations used to determine where the money goes.

            Not that the report’s not all good, of course.   It really seems aimed at perpetuation the music industry as we know it.  Who knows how it will all shake out, how it gets through Congress (which needs to OK much of what’s proposed), and how long it will take.  What I’m not sure it does is ensure that the music marketplace will be fair and navigable to the smaller players, the indies, and lone rangers who make music because they have to and can’t be bothered becoming technocrats for the sake of getting the music to market.

            We’ll see.

Paul C Rapp is a high-altitude attorney and budding cheese aficionado who is pleased to be travelling to Harrisburg PA this weekend to give presentations at the Millennium Music Conference.


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