For the past three years, the FMC has hosted Policy Summits in Washington, DC shortly after the New Year. But instead of pushing our luck and biting our nails down to the cuticles regarding the unpredictable weather in January, we’re shifting our Summit for 2004 to the glorious springtime! So mark your calendars now for the fourth annual FMC Policy Summit.

Future of Music Coalition Policy Summit 2004
Date: May 2–4, 2004
Location: George Washington University’s Lisner Auditorium, Washington, DC
Website for event: http://www.futureofmusic.org/events/summit04/

In addition, we’re expanding our schedule this year and organizing two one-day events outside the Beltway. In January 2004, FMC will be collaborating with the Experience Music Project and the Seattle NARAS chapter for an event in Seattle that will focus on positive and proactive solutions to radio consolidation. And on February 25, 2004, FMC will join with Hastings College of Law for a one-day music law summit in San Francisco. We’ll be sending out a separate email with details about these events shortly.

For more info about events: http://www.futureofmusic.org/events/upcoming.cfm. And if you want to help us spread the word about these events, we have “Save the Date” postcards that we can send to you for distribution at shows, on tour, at record shops, at work, school, or conferences! Email us a bit about yourself and a mailing address at volunteer [at] futureofmusic [dot] org if you’re up for it.

This November, acclaimed activist musicians Billy Bragg, Tom Morello (The Nightwatchman), Steve Earle, and Lester Chambers of the Chambers Brothers are embarking on a thirteen-date “Tell us the Truth” tour to perform concerts and raise awareness on current media reform and fair trade issues. With support from unions, environmental, religious and media reform groups – including Jobs With Justice, Citizen Trade Campaign, Common Cause, Free Press and the Future of Music Coalition – this tour will be the most visible challenge to corporate domination of the public discourse in recent history.

The tour is partnering with Rock the Vote to register voters, as well as scores of grassroots media and trade groups to build an educated electorate in preparation for next year’s presidential election. The tour will raise funds to support future artist/activist partnerships and organize future Tell us the Truth Tours.

We hope you can make it out to one of these great shows in your area. And tell your friends!

November 7-8 Madison, WI National Conference on Media Reform
November 10 Chicago, IL Park West
November 11 Royal Oak, MI Royal Oak Music Theater
November 12 Indianapolis, IN The Vogue
November 14 Nashville, TN Belcourt Theater
November 15 Asheville, NC The Orange Peel
November 16 Atlanta, GA Variety Playhouse
November 17 Tampa, FL Tampa Theater
November 19 Miami, FL People’s Gala for Global Justice
November 21 Philadelphia, PA Keswick Theater
November 22 New York, NY Webster Hall
November 23 Boston, MA Berklee Performance Center
November 24 Washington, D.C. 9:30 Club

FMC’s Jenny Toomey will be traveling with the tour doing logistics, organizing and press. For more info about the tour, its mission, or to get tickets, visit this fabulous website: http://www.tellusthetruth.org

Earle, Bragg, Morello Set Tour Plans
by Jonathan Cohen, Billboard, October 9, 2003

On October 8, 2003, the FMC joined with AFTRA, AFM, and the Recording Artists Coalition to deliver a “Joint Statement on Current Issues in Radio” to the FCC and Congress. The statement was also signed by six other groups: Artists’ Empowerment Coalition; Association for Independent Music; Just Plain Folks Music Organization; Nashville Songwriters Association International; National Association of Recording Merchandisers; and the Music Managers Forum.

In the statement, the organizations – representing thousands of performing artists, as well as hundreds of record retailers – expressed gratitude that some of the issues of media ownership, payola and vertical integration first highlighted in a May 2002 letter have received more attention from Congress, the FCC and by the radio industry itself.

However, we also expressed our continued concern about the problems that are caused or exacerbated by radio ownership consolidation and vertical integration in the radio industry. We reiterated our call on the FCC and Congress to investigate such issues as vertical integration of radio ownership, payola, radio ownership consolidation and low power radio, to ensure that radio serves the public interest.

Read the press release here. Read the statement here.

On October 1, 2003, the American Federation of Television and Radio Artists (AFTRA) announced that it had come to a historic and long-fought-for agreement with the major labels regarding health insurance for musicians working under contract.

The agreement, known as the AFTRA Sound Recordings Code, covers both royalty artists (vocalists) and session vocalists that are AFTRA members who are performing on sound recordings. The centerpiece of the tentative agreement is an innovative structure that guarantees access to health insurance under the AFTRA Health Plan to all AFTRA covered royalty artists under exclusive contract to a label.

For the first time, every covered artist under contract to a major record label or other AFTRA signatory label is guaranteed access to basic health care for as long as the artist remains on the label’s roster as an exclusive recording artist.

The FMC joins AFTRA in commending the recording industry for recognizing the importance of providing basic health care to the artists whose music fuels this business, and for working with AFTRA’s negotiating committee to develop a breakthrough solution on this issue. We’d also like to congratulate and thank AFTRA for working so doggedly on this issue on behalf of royalty artists. Yay AFTRA!

For more info about this agreement, go here:
http://www.aftra.com/resources/pr/0903/riaa.html

Health Care for Recording Artists?
By Barry Willis, Stereophile, October 6, 2003

The FMC is also pleased to hear that SoundExchange – the royalty collection agency for webcasting royalties – has severed its ties with the RIAA. This separation of the two entities was one of the FMC’s earliest struggles, and one that our general counsel Walter McDonough has been advocating for as an artist representative on the SoundExhange Board since 2000. For us, the association between the two entities was akin to the fox guarding the henhouse, and we’re glad that the SoundExchange Board has agreed to separate the royalty collection agency from the RIAA.

"This has been a long time coming," said FMC’s General Counsel, Walter McDonough, who also serves as an artist rep on the SoundExchange board, "but hopefully this may serve as a model of how to increase artist compensation in the future.”

As reported in previous newsletters, the FCC’s Broadcast Ownership rules passed 3-2 by the FCC commissioners on June 2, 2003. Since then, a variety of groups and policymakers have been working on a multitude of fronts to amend, roll back, or stop these rules from being implemented. For brevity, we will only highlight three efforts here, but you can also read our October 30 media policy update page to understand the bigger picture.

Media Activists Successful in Motion to Stay Rules
––––––––––––––
On September 3, the Third Circuit Court of Appeals in Philadelphia granted a stay, which stopped the new FCC rules from taking effect. The motion for the stay was filed by Prometheus Radio Project – a group that works mainly on low power FM station advocacy – and was brilliantly argued in court by Andy Schwartzman of the Media Access Project, a public interest lawfirm with a long track record on FCC-related fights for citizens. Experts predict that this stay may be in effect for up to a year as it kicks off a variety of other legal and regulatory responses. Oral arguments will take place on February 11, 2004 in Philadelphia.

More information here:
Court Blocks FCC Media Regs
Reuters, September 3, 2003

Visit Prometheus Radio Project or Media Access Project’s excellent court timeline for more info about the 3rd Circuit case.

FMC Files a Petition for Reconsideration
––––––––––––––
Because of the research we published last November on the effects of radio’s consolidation on citizens and musicians, we felt it was important for the FMC to file a “Petition for Reconsideration” at the FCC. The document – filed at the FCC on September 4 – addresses a number of the fundamental flaws we saw in the radio section of the FCC’s recent rulemaking on media ownership. You can read our 19 page filing here. Executive Summary | PDF of document

Senate Action: CRA and S 1046
––––––––––––––
There has been remarkable progress in Congress, but opponents of FCC Chairman Powell’s plan still face a number if difficult hurdles. On September 16, the Senate passed SJ 17 by a vote of 55-40. This measure — a Resolution of Disapproval under the Congressional Review Act, or "congressional veto" — now moves to the House of Representatives. At least 200 Representatives have signed a letter circulated by Rep. Maurice Hinchey and others calling for a vote on the Resolution, but the House leadership (primarily Speaker Dennis Hastert, Majority Leader Tom Delay and Commerce Committee Chairman Billy Tauzin) are keeping the measure from coming to a vote.

Another promising piece of legislation, S 1046 the "Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003" has been moving through the Senate and may be brought to the floor early next year. Introduced by Senator Ted Stevens (R-AK) the bill now has 47 Senate co-sponsors (including 12 Republicans). This bill is important because it reinstates cross-ownership limits between TV and newspapers; clarifies that the FCC has the authority to "re-regulate" if it is in the public interest; mandates field hearings during ownership reviews; and forces divestiture of radio station clusters that exceed newly defined markets. If this bill is considered on the Senate floor, it will likely pass by a wide margin. This could put significant pressure on the House leadership to allow consideration on their side of the Capitol.

What You Can Do
–––––––––––––—
As always, letters to your elected officials to express your opinion on these issues are great. Call both your Senators and encourage them to co-sponsor S 1046. If they are already co-sponsors, you should thank them for their support. You can go to http://www.congress.org to get contact information for your Senators.

Want to do more? Our allies at Free Press have initiated a “Call Congress” campaign that encourages citizens to contact their members of Congress and urge them to support various bills like S 1046 that would roll back the FCC’s decision. The website includes links to members of Congress and sample messages. You can read more about it here: http://www.mediareform.net/callcongress.php

As part of its new "localism" initiative, the Federal Communications Commission will hold six "town meetings" across the nation over the next nine months to give citizens a chance to report how well the media is serving the public interest in their communities and how it can be served better.

The first town meeting happened in Charlotte, NC on October 22. As news reports recount, the Charlotte/Mecklenberg municipal building was packed with nearly 300 citizens for the evening hearing, many of whom lined up to tell Chairman Powell and Commissioner Copps their opinions about how local radio and TV stations are serving the community. Here’s a few news clips:

Own globally, act locally?
The FCC’s Michael Powell says a shortage of local and community affairs programming has nothing to do with media conglomeration. But at a North Carolina hearing, he heard from his critics.
By Eric Boehlert
Salon.com, October 24, 2003

FCC examines broadcasters
Charlotte hearing looks at how TV stations serve communities
The Associated Press, October 23, 2003

FCC Localism Hearing Draws Large, Vocal Crowd
Citizens, Broadcasters Discuss Local Media Ownership Issues
WRAL, October 22, 2003

What You Can Do
––––––––––––—
If you’re at all concerned about how your local radio, TV and newspapers serve your community, this is a fantastic chance for your voice to be heard. As actual dates and locations are confirmed we’ll post them on the FMC website at http://www.futureofmusic.org/events/upcoming.cfm

December 2003, San Antonio, TX
March 2004, Santa Cruz/Salinas, CA
April 2004, Rapid City, SD
May 2004, Portland, ME
June 2004, Washington, DC

Recently, the FMC had the pleasure of meeting with some folks who have kicked off a new effort to get music fans engaged in the political process, called Punk Voter. Punk Voter’s goal is to educate, register and mobilize over 500,000 of today’s youth as one voice. They plan to use the 2004 federal election as a way to get our fans engaged in politics and evolve into a movement that can get involved locally to affect real change nationally. Loads of bands, musicians and labels – from the Foo Fighters to Good Charlotte to Ministry – have jumped on the bandwagon. You can throw yourself in the mosh pit here: http://www.punkvoter.org.

The last two months has seen an almost daily barrage of news stories in the press about the lawsuits the RIAA has been bringing against individual infringers. The most recent reports indicate that the RIAA has settled out of court with a number of “egregious infringers” and dropped other lawsuits because of some “mistaken identity” problems. One alleged infringer – a Jane Doe – is countersuing the RIAA because of the tactics that the association has used to deliver subpoenas and collect evidence about individuals.

Politically the RIAA has taken some heat over these subpoenas, in particular from Senator Norm Coleman who has called for investigations into the RIAA’s wielding of this much “fast-track” legal power. In response, the RIAA has softened the blow by issuing warnings to their targets, allowing them ten days to negotiate a settlement. On the other end of the spectrum, the most recent reports seem to suggest that the RIAA’s lawsuits are having an effect on peer-to-peer file sharing traffic. Here’s a selection of news:

RIAA Croons a New Warning Tune
The recording industry group says from now on it will send out warning letters to suspected music-file traders before taking them to court, allowing them to negotiate a settlement. Those who do not respond within 10 days will be sued.
Reuters/Wired, October 18, 2003

File-Sharing Services Have Plan to Pay
Group Says It Can Protect Music Industry
By Frank Ahrens Washington Post, October 9, 2003

Listen, It Isn’t the Labels. It’s the Law
By Jeff Howe Washington Post, October 5, 2003

Florida Dorms Lock Out P2P Users
A program designed to nab file swappers at the University of Florida appears to be successful, much to the chagrin of students. The pilot project is a model for other schools coping with peer-to-peer sharing on campus networks.
By Katie Dean Wired, October 3, 2003

Lawsuits Damp Down P2P Audience
Activity on the more popular peer-to-peer networks has dropped 41 percent in three months, according to a new poll. The RIAA’s no-download message, delivered through lawsuits against individuals, seems to be getting through.
Wired, October 1, 2003

Rude Awakening for File Sharers
Many people who download from Kazaa and other applications say they’re shocked that sharing music files isn’t legal. After all, they paid$29.95 for premium versions of file-sharing apps, so how could they not be legit?
By Michelle Delio Wired, September 11, 2003

Tone Deaf to a Moral Dilemma?
Millions download songs illegally but don’t feel guilty. The industry wants to shake up their consciences. Targeting parents is one tactic.
by Jon Healey and Jeff Leeds, Los Angeles Times, September 2, 2003

Defiance propels music trading: Web means ‘free’ to file sharers
Online file sharing gave San Francisco band Ten Mile Tide its start and a fan following. The folk rock band has a partnership on file-sharing site Kazaa.com and on Cornerband.com which lets people search for and rate new artists and download songs or buy albums.
By Jennifer Beauprez, Denver Post, September 1, 2003

For even more news, go to http://www.futureofmusic.org/newsstream.cfm

For us here at the FMC, it’s the news about the launch of new legal distribution services that get us excited because this seems like the most promising way for artists to be compensated for their work in the digital future. In September, MusicMatch opened up a download store. In October we saw the launch of iTunes for PC, and most recently Roxio debuted the new, legal version of Napster 2.0. Here’s some of the top news:

Apple PC iTunes hits 1 million downloads
Apple Computer Inc. said that computer users had downloaded more than one million copies of its iTunes digital jukebox software for Windows since its launch Thursday, and that a total of one million digital songs had been purchased at 99 cents in that time.
Reuters, October 21, 2003

PC User Whistles a Happy ITunes
Apple crosses over to the PC world with an iTunes music-sharing program for Windows. Katie Dean gives the new software an audition.
Wired, October 18, 2003

Napster Returns — Not Free but Legal
Three years ago, it was ludicrous to think that Napster would win the backing of the record labels that were suing it for piracy.
By Jon Healey, Los Angeles Times, October 10, 2003

MusicMatch to Sell Downloadable Music
The online store, which opens today, imposes the fewest limits on copying and portability among legitimate outlets.
By Jon Healey, Los Angeles Times, September 29, 2003

Music Fans Starting to Tune In to Fee-Based Sites
Ex-file sharers like the bigger, more reliable libraries. But the labels have a long way to go.
By Jon Healey, Los Angeles Times, September 21, 2003

For consumers, the recent explosion of options about how to listen to, learn about and download music legally has been great, but the FMC continues to remind folks that these new forms of distribution should provide all artists – not just those signed to major labels or big indies – with a better opportunity to find an audience for their music and get compensated for their work.

Unlike terrestrial music stores with limited shelf space and can only stock the most recent or best selling hits, digital download stores have limitless space. Because of this, digital download stores can stock records that have long been out-of-print, or carry releases by artists that are unsigned or on indie labels. And now that there are better, more secure stores out there, artists should see these various sites as yet another way to promote and distribute their music.

But how do indie labels and unsigned artists get their tunes for sale through these various services? It’s not as hard as you might think. The FMC has recently interviewed three of the primary services that can help musicians and indie labels offer their songs for sale through various digital distribution services, asking them how they do it, what they offer, and how artists get paid. Check them out!

The Independent Online Distribution Alliance (IODA) is a digital distributor for the 21st century.

Digital Rights Agency is a company that negotiates distribution deals with digital music services by using the collective bargaining power of its rapidly expanding group of label clients.

CD Baby continues to offer a fantastic opportunity for independent and unsigned musicians to sell their CDs via their website. Now, CD Baby has added a digital distribution component to their services, so for a reasonably small set up fee artists can now have their songs included in up to seven different distribution services.

11. Universal Cuts Prices at Retail

In September, Universal Music announced it would cut their retail CD prices to $11.99. The FMC believes that this is a reasonable reaction from the record label to consumers’ ever-increasing dissatisfaction with the high cost of CDs. There’s a sense by some in the music industry that the four other major labels will follow suit and drop their retail prices to match.

The financial bottom line for UMG will probably stay the same. While they will see less money for each CD sold, the company has also stopped shelling out thousands per week in advertising money, which is usually referred to as co-op money – through which they subsidize the advertising costs of retailers.

This price cut, however, does have some negative consequences. First, it has been reported that the lower prices offered to retailers comes with conditions. UMG was insisting that, to get the lower price, that stores are expected to dedicate 25 percent of their display/rack space to Universal releases. We assume this number is based on UMG’s 27 percent global market share, but why should indie stores that have both limited space and usually a much wider selection of music from both major labels and independent labels be forced to dedicate that much rack space to one label just to get records at this new price?

In addition, the bands signed to UMG will most likely also feel the price drop. Since royalty formula in most major label contracts is based on the “suggested retail price”, the FMC assumes that bands will be seeing proportionately less in their royalty checks that are based on sales. Of course, the gamble is that the lower price will generate more retail sales, which will offset the price drops. Only time will tell.

Universal Music Was Boxed In on CD Prices by Big Retail Chains
Discounting by Best Buy and others may have forced the cuts. More labels may follow along.
By Jeff Leeds, Los Angeles Times, September 5, 2003

Top Label Cuts CD Prices to Fight Net Downloads
Universal Music’s move to increase sales could benefit consumers but squeeze retailers.
By Jeff Leeds, Los Angeles Times, September 4, 2003

Giving price cuts a spin
No. 1 record firm Universal Music looks to get sales back in groove
By Chris Gaither, Boston Globe, September 4, 2003

12. Other Items in the Newsstream

Hey music news junkies, for even more news about iTunes, RIAA lawsuits, webcasting royalties, low power radio, intellectual property, music and technology that’s updated almost daily, visit http://www.futureofmusic.org/newsstream.cfm or FMC in the News at http://www.futureofmusic.org/fmcnews.cfm

13. What We’re Doing

Jenny Toomey
For the past few weeks Jenny has been coordinating the details of the Tell Us the Truth tour and embarking on her first solo tour in over a year. She recently was quoted in the New York Times coining the expression "Lowry Burger" and she spoke at American University on a panel that discussed the future of P2P.

Walter McDonough
Walter recently moderated at panel on the State of the Music Industry that included Mike Dreese, president of Newbury Comix, Bill Thomas, Chief of Staff of ASCAP, Dickie Barrett of the Mighty Mighty Bosstones and Brian Celler, Epic Records.

Kristin Thomson
Kristin has to get a hat rack installed in her home office just to keep her various hats organized, let alone put on the damn hat and actually get some work done. But somehow we keep moving forward, ever so speedily. She recently participated in a panel moderated by Carrie McLaren of Stay Free! Magazine as part of the “Illegal Art Extravaganza” and looks forward to more research on intellectual property issues, digital distribution services and event organizing for 2004.

Brian Zisk
Brian’s been comparing the huge touring industry (of which musicians get a large share) to the much smaller recorded music industry (of which artists get a much smaller share). He’s been seeing obvious sighs as to which
sectors of the economy are most likely to help support artists in the future.

14. How are we doing?

If you have any feedback, questions, or suggestions please send an email to suggestions [at] futureofmusic [dot] org, and let us know how we’re doing.

Thanks for your support and see you next time.

Jenny Toomey
Michael Bracy
Brian Zisk
Walter McDonough
Kristin Thomson
Peter DiCola