Who gets paid, how much and under what terms when music is played on digital and AM/FM radio? Answering those questions isn’t easy, even for experts. But one thing is clear: 2014 has been a big year for the laws and policies that determine royalty rates for all forms of radio, and the intrigue will likely continue into 2015. read more
Today, news broke that Merlin—a global rights agency representing independent labels—entered into a deal with Internet radio leader Pandora that seems to align the incentives of both parties while maintaining direct payment to artists.
Overall, we are glad to see a major music service commit to better serving indies using technology, and with a shared goal of growing audiences for that music (and thereby generating more revenue).
It used to be that big companies were able to define the parameters for debate about music industry issues, and make all the big decisions. What was good for corporate media and big money, we were told, was good for the artists, and for the music industry as a whole.
The desire to tell a more complete and accurate story centered on the needs and experiences of musicians was a big part of why Future of Music Coalition got started 14 years ago. By now, more people understand that the agendas of a handful of giant music companies may sometimes align with artists, but not always. In fact, these companies are very capable of misdirection when it benefits their bottom line. And tech companies don’t have a lot of experience working directly with artists, in part because the existing structures so often compel big-money negotiations with the major rightsholders. Today, we’re thrilled to see more and more artists speaking openly about the issues that impact their livelihoods. Independent labels are getting bolder too, in demanding fair treatment and respect for their different way of doing business.
You may have heard that the United States Department of Justice (DOJ) is investigating potential anticompetitive behavior by major music publishers and Performing Rights Organizations (PROs), which collect and distribute royalties to songwriters and publishers for the performance of musical compositions. These “blanket licenses” are made possible by DOJconsent decrees and cover all forms of broadcast as well as concert venues or other establishments that publicly perform music (think bars or restaurants).
Make no mistake, PROs are crucially important to songwriters. They provide leverage to artists who wouldn’t otherwise have it in rate negotiations with music services; they pay their songwriter members directly under fair splits (50-50 between artist and publisher); and they allow music to be efficiently licensed to AM/FM, Internet and satellite radio, which means listeners have more opportunities to hear music, and songwriters have more opportunities to get paid.
In 1941, “Chattanooga Choo-Choo” was the biggest hit in the land, thanks to — what else? — the radio. Radio’s popularity owes much to songs like this — and the songwriters and publishers who enabled us to hear them. Back then, the balance of power in the music industry was tilted towards the performing rights groups ASCAP and BMI, organizations that acted as gatekeepers to the world’s most valuable musical repertoires — so much so that the US Department of Justice took action that same year to balance the scales: read more.
There’s been a lot of back-and-forth regarding a recent court ruling that maintains the current royalty rates paid by Internet radio company Pandora to ASCAP, a 100 year-old performing rights organization (PRO) that collects money for AM/FM and Internet radio play then distributes that revenue to songwriters and publishers.
In the coming days, we hope to offer varying viewpoints from individuals and groups in this ecosystem. For now, we’ll try to demystify this decision and the licensing frameworks that informed it.
For consumers, iTunes Radio may feel a lot like another version of the popular “predictive” radio service Pandora. Plug in an artist or genre, and an algorithm spits out sonically related tracks. But while the experience for listeners may be similar up to a point, the revenue flow behind the scenes isn’t an exact match.
In order to break down how money gets from iTunes Radio to the artists, it’s first important to remember that every song has two copyrights: one for the underlying composition (think notes and lyrics on paper), and one for the sound recording (think music on CD, tape or hard drive).
Washington, D.C.— Future of Music Coalition (FMC), a national non-profit research, education and advocacy organization for musicians, has submitted testimony for the House Subcommittee on Intellectual Property, Competition and the Internet’s hearing on Music Licensing, taking place on Wednesday, November 28. read more
Over the past ten years, internet and digital radio has evolved into a robust and viable business.
Services like Pandora, Sirius XM, Clear Channel’s IHeartRadio and Slacker are leading the way in delivering radio-like services to millions of music fans every day, and paying millions of dollars in digital performance royalties to rightsholders, performers and songwriters. read more