In February, the Future of Music Coalition hosted their 2009 Policy Day event in Washington DC to examine the issues “at the intersection of music, technology, policy and law”.
The panelists tackled some of the most contentious issues surrounding the music industry’s future including media ownership rules, public performance royalties, network neutrality, copyright reform and fair compensation models in the digital music marketplace.
Michael Bracy, Policy Director for the FMC, began the first panel by pointing out that the United States is one of the few industrialized nations in the world that does not collect or pay royalties on behalf of performing artists when their songs are played by terrestrial radio. Under current US law only songwriters are compensated for terrestrial radio airplay.
According to Hal Ponder, the Director of Government Relations for the American Federation of Musicians, performance rights legislation has just be reintroduced in congress but is facing stiff opposition from the radio industry.
Many of the panelist clearly favored repealing the legislation that allowed corporations like Clear Channel Communications to own multiple stations in a single market and compensating performing artists for terrestrial radio airplay.
However, Randy Hawke from Mid-West Family Broadcasting argued that changes to media ownership rules or increases in royalty payments wouldn’t affect only large corporations like Clear Channel but could jeopardize the six small stations his company owns and their support for local bands and communities. Vice President of New Media & External Affairs for SoundExchange, Bryan Calhoun did point out that under the performance rights legislation currently proposed commercial radio stations with less than $1.5 M in revenue would only pay a $5000 flat fee annually and non-commercial radio stations would only pay $1000 annually.
The Obama administration stated in its transition documents that it intends to “update and reform our copyright and patent systems to promote civic discourse, innovation, and investment while ensuring that intellectual property owners are fairly treated”. Despite this pledge it became clear during the panel on “Copyright and Innovation in the Digital Age” the issue of music copyright is so complex and divisive that comprehensive copyright reform seems highly unlikely in the near term.
Technology entrepreneurs are continually devising new and innovative ways to help consumers discover new music but often times struggle with the constraints of existing copyright law and licensing fee requirements from large rights holders.
According to Chief Counsel, Zahavah Levine, YouTube wants to license all the music in the videos uploaded by their users. “We want to pay” says Levine but they are currently required to obtain a separate synchronization license for each video and that can prove impossible. As many tech companies have learned there is no easy way to track down who owns the publishing rights to a particular piece of music since there is no central point for publishing ownership information.
Clearly music technology providers would prefer compulsory, blanket licenses for the use of music. Walter McDonough, General Counsel for the FMC, argued against blanket licensing pointing out that since there is no moral rights provision in US copyright law songwriters would have no way to stop their music from being used in a way that is personally offensive to them if blanket licenses were to be issued.
The Future of Music Coalition acknowledged the “natural tensions between protecting the rights of creators and establishing platforms for innovation” but believes “by coming together to discuss the many challenges and opportunities before us, we are contributing to a brighter future for music”.
Hopefully the FMC will be able to keep the dialog moving forward given the amount of work it is going to take for the interested parties to reach consensus on the important issues facing the music industry.
David Rose is a 15 year technology industry executive and former head of Business Development, New Media, Online Sales & Marketing and IT at Yep Roc Records & Redeye Distribution. He is currently the Managing Editor at KnowTheMusicBiz.com.