We were sent this internal email from inside National Public Radio by a whistleblower.  The internal email was apparently in response to the criticism of NPR coming from independent artists online.  As we suspected, it appears that NPR’s participation in the controversial “Mic Coalition” (or as we call it the “McCoalition”) was a decision taken by NPR’s Policy and Representation division (aka “suits”) without consulting with any of the music or news workers or any of the NPR member stations.

NPR is participating in the Music, Innovation & Consumers (MIC) Coalition to ensure that public radio’s voice is heard in future policy decisions involving copyright law. Changes to copyright law may have a direct impact on public radio stations’ abilities to bring music to listeners nationwide.

Our participation in this coalition is not an endorsement of the business plans or activities of other members.

The coalition has not yet made specific legislative or regulatory proposals. We will reassess our participation in the coalition as such proposals are drafted.

We have joined the MIC Coalition through NPR’s Policy and Representation division, which is charged with representing the needs and interests of NPR Member Stations before federal legislative and regulatory bodies. This role is stipulated in NPR’s charter which provides that it is part of NPR’s mission to represent our members in matters of mutual interest.

Our participation in the coalition is completely separate from NPR’s newsroom. NPR journalists and music curators have absolutely no role or involvement in the coalition.

Who Did NPR Get Into Bed With?

What’s different about the McCoalition is that we now see who our enemies are.  Not only does the McCoalition include the NAB–an extraordinarily powerful special interest group long devoted to protecting crony capitalism and the broadcaster loophole–it also includes Google, Amazon, Pandora, the Digital Media Association (of which Google/YouTube, Amazon and Pandora are members), the Computer & Communications Industry Association (of which Google, Amazon, Pandora are members) Cox Media Group, iHeartMedia (formerly Clear Channel), Salem Media Group, the National Association of Broadcasters (of which Cox, iHeart, Salem and Pandora are members), the Music Licensing Committee (of which Cox and Clear Channel are members), the Consumer Electronics Association (of which Amazon, Google and Pandora are members), the National Restaurant Association (which fought the performance royalty for songwriters whose music is performed in restaurants), the American Hotel and Lodging Association (which also fought the performance royalty for songwriters).  And then there are the human shields at the Educational Media Foundation and, as David has pointed out, National Public Radio.

Crony capitalists with a combined market cap in excess of $2 trillion seeking protection for the special interests and aligned against artists and songwriters.

The restaurants have a particularly unsavory history on this point–their last effort to screw songwriters was with the highly controversial 1998 special interest legislation, the Fairness in Music Licensing Act.  That debacle ended in a ruling against the United States in arbitration at the WTO that ruled that the restaurant special interest legislation violated a number of international laws as was predicted by then-Register of Copyright Marybeth Peters but ignored by the lobbyists and the Congress.  The U.S. taxpayer has to pay $3.3 million in fines ordered by the tribunal and paid to European rights holders.  So thanks to the restaurants, the Congress passed an illegal law requiring U.S. taxpayers to pay for foreign songwriters–millions and millions of taxpayer dollars.  Would you like fries with that?

And if that dark history wasn’t enough, the whole group is organized by the Washington, DC shillery, Twin Logic Strategies–the brainpower behind the Internet Radio Fairness Act.  This is “astroturf” in every sense of the word–a manufactured alliance to taint the Congress no doubt with threats and intimidation for anyone who would dare consider supporting the Fair Play Fair Pay Act.  The Act accomplishes two main goals:  pay artists in line with the rest of the world and stop Pandora and SiriusXM from screwing legacy artists with the pre-72 loophole.  In other words, doing what all these companies and their lobbyists stand for–screwing artists and especially songwriters.

So we understand exactly what the unifying principle is behind this McCoalition–they don’t want to pay for music.  And neither do the NPR stations that ask us to play for free as David has pointed out.  Unfortunately, NPR’s “Policy and Representation division” doesn’t understand that when our friends at NPR ask us for freebies we’re happy to help because it is NPR doing the asking.  Now that NPR has aligned itself with millionaires and billionaires, not to mention companies with trillions in market cap, NPR has made anyone who gives the freebies into a chump.

We all know that our friends at NPR are better than that.  That’s why whistleblowers come to us.  But as long as our friends at NPR aren’t allowed to publicly reject the suits, it does make you wonder what’s going on.

But now that the suits forced NPR to join the McCoalition–how much does that McCoaltion membership cost?  And who paid it?

If you’ve followed the history of Pandora in the webcasting rate setting proceedings, you will remember the extraordinary sanctimony with which they approached artists.  We were told, you have to save our business, you’re too greedy, etc.  Sound familiar?

The one aspect of Pandora’s functionality we were always steered away from was its interactivity.  Why?  Two reasons.

If Pandora were found to be interactive, the Copyright Act would require Pandora to negotiate direct licenses with copyright owners large and small.  That would be a real headache for Pandora compared to the ease of the statutory webcasting license. Imagine the savings in transaction costs conferred on Pandora through the statutory license.  Not to mention the fact that Pandora would have to pay advances, which they don’t have to pay under the statutory license, and Pandora would also probably be faced with some of the same demands that Spotify and YouTube saw with demands for equity from major labels and the Merlin group of labels.  (Although strangely enough, this was never an issue with Apple…gee, would that be?)

The other reason is that artists get paid directly by SoundExchange regardless of whether they are recouped under their record deals.  This is a big damn deal, because it keeps the record companies’ paws off of the artist share of statutory licensing revenue.  SoundExchange fights hard to keep this structure and we should all be grateful for it.  In this way, SoundExchange is very much like ASCAP, BMI and SESAC.

Not only does SoundExchange pay the artist’s share directly to the artists, there are other benefits of collective licensing such as the right to conduct a royalty examination of companies like Pandora that we get from the statutory license as administered by SoundExchange.  In fact, SoundExchange announced it is conducting an “audit” of Pandora right now.  Any recovery under those audits will also get paid to the artists based on their share of the recovery.  (And if you believe Pandora has accounted perfectly to artists and songwriters, surely you jest.)

Yet as David has shown, Pandora is pretty close to being interactive, which would take them out of the statute, but Pandora clearly is not truly interactive, or “on demand” the same way Spotify is.  On the other hand, Pandora is not really a “webcaster” either because of their thumbs–not the thumb of the nose they give to artists and songwriters, but the ones they use to create their “near interactive” service.

So what do do about this?  There is no way on earth that artists should give up their right to be paid through SoundExchange and there’s no reason to encourage direct deals.  Pandora would be more than happy to do more direct deals because those only weaken collective licensing which is at least Chris Harrison’s apparent motivation in life dating back nearly 10 years from his time at DMX.  (Harrison is Pandora’s lawyer who has taken point on destroying collective licensing for ASCAP and BMI songwriters.  See Billboard’s expose on Harrison’s anti-creator shenanigans at DMX, now Mood Music that he brought with him to Pandora.)

On the other hand, it seems to be a historical loophole that sustains the perception of Pandora as a non-interactive service.  It also shows what happens when you cut these Silicon Valley companies a break as we did years ago by looking the other way on the issue of interactivity with Pandora.  Not to mention a very questionable ruling in the Launchcast case that cherry picked law and facts as David has demonstrated.

We think that Pandora should get to keep the statutory license, not be encouraged to do direct deals, but pay more to artists (and to songwriters, for that matter).  This could be accomplished by establishing a “near interactive” tier of royalties for companies like Pandora that purposefully dance around the interactive threshold but don’t cross it, or at least don’t cross it all the time.

A “near interactive” tier is something akin to the “near video on demand” concept in the movie world–something that is almost a functionality requiring a higher royalty but with a nod to the fact that it’s not quite that higher priced thing, or isn’t quite yet.

Because if there is one thing we have learned from Silicon Valley companies it is that as soon as they give their word in an agreement they start backsliding to find a way around it while they pretend not to be doing that exact thing.  This is what you call the “near asshole” tier.

Pandora will no doubt bitch about this idea and will also no doubt spend more money on legal fees and lobbyists than it would ever cost them if they just paid the damn royalty–just like they’re doing on pre-72.  But as David’s research has shown, it’s clearly the right way to go.  A “near interactive” tier lets us avoid direct licensing like the plague, support collective licensing through SoundExchange as our best defense against efforts like the McCoalition, audit all these services early and often, and make Pandora pay for the real value we confer on them.

And then we can talk about the use of artists names to build channels–a practice their business is built on that is totally uncompensated.

The U.S. Copyright Office recently released its comprehensive Music Licensing Study, a roadmap for potential revisions to the Copyright Act.  The Copyright Office hosted a series of invitation-only roundtables to hear testimony from a variety of stakeholders.  The New York roundtable was held on June 23, 2014 and included Paul Fakler representing the National Association of Broadcasters and Blake Morgan, an artist, songwriter and label owner involved with the #irespectmusic movement.

The National Association of Broadcasters (“NAB”) is the principle lobbying group representing largely the commercial radio stations in the United States.  Broadcasters are an extremely powerful lobbying group that has stopped artists  from being paid a broadcast royalty in the U.S. for nearly 100 years–even though artists are paid for broadcasting in every other democracy and major economy around the world except for countries like North Korea, Iran and Rwanda.

The Copyright Office released transcripts of these hearings that are readily available but the transcripts are like open secrets–read by those in the know, but most journalists don’t bother reading them.

The Artist Rights Watch team read them–of course–and remembered an exchange between Blake and the NAB representative which we excepted below.  Two events happened last week that make this particularly relevant.  First was Congressional testimony last week by the head of the Copyright Office, Register of Copyright Maria Pallante where she gave her unequivocal support to the Fair Play Fair Pay Act introduced in Congress by Rep. Jerry Nadler (D-NY).

The other was the formation of the “Mic Coalition” (or as a commenter said, the “McCoalition”) with it’s announced goal of making a happy meal of the Fair Play Fair Pay Act and artist pay for radio play.

What’s different about the McCoalition is that we now see who our enemies are.  Not only does the McCoalition include the NAB–an extraordinarily powerful special interest group long devoted to protecting crony capitalism and the broadcaster loophole–it also includes Google, Amazon, Pandora, the Digital Media Association (of which Google/YouTube, Amazon and Pandora are members), the Computer & Communications Industry Association (of which Google, Amazon, Pandora are members) Cox Media Group, iHeartMedia (formerly Clear Channel), Salem Media Group, the National Association of Broadcasters (of which Cox, iHeart, Salem and Pandora are members), the Music Licensing Committee (of which Cox and Clear Channel are members), the Consumer Electronics Association (of which Amazon, Google and Pandora are members), the National Restaurant Association (which fought the performance royalty for songwriters whose music is performed in restaurants), the American Hotel and Lodging Association (which also fought the performance royalty for songwriters).  And then there are the human shields at the Educational Media Foundation and, as David has pointed out, National Public Radio.

A combined market cap in excess of $2 trillion aligned against artists and songwriters.

And if that wasn’t enough, the whole group is organized by the Washington, DC shillery, Twin Logic Strategies–the brainpower behind the Internet Radio Fairness Act.  This is “astroturf” in every sense of the word–a manufactured alliance to taint the Congress no doubt with threats and intimidation for anyone who would dare consider supporting the Fair Play Fair Pay Act.  The Act accomplishes two main goals:  pay artists in line with the rest of the world and stop Pandora and SiriusXM from screwing legacy artists with the pre-72 loophole.  That’s what all these companies and their lobbyists stand for.

While the McCoalition has so far come up with platitudes and glittering generalities about their motives, make no mistake–these people are out to stop artist pay for radio play and probably go much, much farther to roll back other artist rights–or else why are the restaurants and hotels in the group?  Why is NPR in the group?

In other words–if you ever doubted before, the McCoalition should provide you with all the evidence you need.  Companies with trillions of dollars of market cap and hundreds of millions of lobbying power and political contributions are out to nail artists and songwriters to the wall.

And at the roundtables, the goals of this group were articulated by Mr. Fakler in this exchange with Blake, moderated by Jacqueline Charlesworth, General Counsel and Associate Register of Copyrights, U.S. Copyright Office.

MR. MORGAN: My name is Blake Morgan, I’m a recording artist, and a songwriter, and a label owner here in New York City––in fact––right up the block. And in January, I started something called “I Respect Music,” which began as a petition to Congress, urging Congress to support artists pay for radio play. And many, many thousands of signatures later, it’s grown into a grass roots movement with people holding up signs on Twitter, and Facebook, and Instagram, and covered by major national press, and all sorts of terrific things. It’s about a simple idea: that artists should be paid for their work. When it comes to radio air play, we are the only democratic country in the world that does not pay artists for radio play….

MR. FAKLER: Between the pre-existing service issue, and the radio issue––since I’m the one at the table with everybody’s arrows in my back––it may take me a little bit longer to respond to all of the various things. Let me start out with some general points here, because this has been a problem endemic to this discussion….

You know with respect to radio, and the promotional value of terrestrial radio, all I can say is that all of the studies still always showed radio as the number one discovery vehicle for sound recordings, and driver purchases. That hasn’t changed….

MR. MORGAN: With all due respect––and I can imagine how you feel here––but these aren’t arrows in your back, they are questions to your face. And the question for artists and musicians is: how is it possible that anyone can agree with a group of countries that don’t pay artists for radio play. A small group of countries that includes North Korea, Iran, and Rwanda. And to hear––you are actually the first person I have ever met face to face who I presume believes that we should not have this performance right in this country. And Kim Jong Un agrees with you, and it’s hard to believe. This —

MR. FAKLER: Really?

MR. MORGAN: Really, sir. There are many, many complicated issues here, but this part of it isn’t. This country is an idea. It is one that has lit the world for two centuries. And the idea is: we can do better. We’re here to form a more perfect union. We fix injustices, large and small. Sometimes it takes us a lot longer than it should, but we do it. And in the last century alone we’ve been able to split the atom. And put a man on the moon. And splice the gene. And I think artists and musicians are saying, “Can we please––can we pay Aretha Franklin when ‘Respect’ is on the radio?” That is the question.

MS. CHARLESWORTH: You have 30 seconds to respond and then we will continue, since there is a direct question.

MR. FAKLER: Well, I mean, I don’t know how one responds to these ad hominem. You know, the Kim Jong Un thing, it is––that is not, you know, an ad hominem is a great substitute for a policy argument. It is, sort of like the MPAA with the VCR and the Boston Strangler, and all of that. It makes for a good sound bite. But the point is, the promotional value is received. It’s something that has been a mutually beneficial arrangement for many years. It has been recognized by Congress. And to ignore that promotional value, and to minimize it, we just have a disagreement. But I don’t have to call you, you know, a name, or —

MR. MORGAN: I’m not calling you a name, sir. I’m simply reminding you that the rest of the democratic world sees value, and awareness, and promotion on the radio, and also says our work should be paid for. The only group of countries that does not agree with that is a “bad” group of countries. And it’s embarrassing I think––as the United States of America––when blues, and rock-n-roll, and hip hop, and Jazz, etcetera, are American innovations and American birthrights, and we don’t show the same amount of respect––pardon the overuse of the word––to those artists. So I’m not attacking you personally, or in any way. I’m really asking what is a very reasonable question to the music maker and music lover public. Which is: it is incomprehensible that we don’t have this right in this country when we are the ones, together, who came up with these art forms. And Belgium is able to do this, but we are not?

MR. FAKLER: And yet the American recorded music industry is the biggest, best, and envied throughout the world. And it has lived with this system for close to 100 years.

MR. MORGAN: We live with a lot of things for a long time–

MR. FAKLER: Not to mention the fact––

MR. MORGAN: — until we fix them.

MR. FAKLER: — that all of these other countries that you are discussing have very different legal regimes as relating to sound recordings in particular.

MS. CHARLESWORTH: Okay. I think both sides have made their points, and we are going to move on…I think Mr. Morgan is going to bring us home.

MR.MORGAN: Just very quickly. So this is-–you’re conducting a music licensing study about these issues, and in some of this stuff we do get lost in the tall weeds because it’s complicated. And, Mr. Fakler, you do have a tough gig here today, and I appreciate you coming here and being the standard bearer for that particular position. I guess as part of the study what did seem very simple to me––I didn’t hear anybody else and I’m just curious––is there anyone else at this roundtable that’s against a performance royalty at terrestrial radio?

[NO ONE RAISES THEIR HANDS]

So everyone here at this table except Mr. Fakler believes that there should be a performance royalty at terrestrial radio? Okay, thanks.

MR. FAKLER: Would anybody else’s clients actually have to pay the royalty?

[LAUGHTER]

MR. MORGAN: And actually, with a little comedy we can end with a little comedy. I appreciate that wherever I go, when I travel and I talk about this issue, I say that I understand the NAB’s position. It’s legitimate, and it’s one that we should pay attention to because it is serious, and it is valid. And the valid position is, “We don’t want it.” “We don’t want to pay for it.” And I get it. But, other than, “We don’t want to pay for it,” I have yet to hear an argument that is solid.

MS. CHARLESWORTH: Okay. Well, thank you, I’m glad we had a little bit of humor at the end….

The head of the Copyright Office echoed Blake’s feelings when she told Congress last week “it’s indefensible as a matter of law and frankly embarrassing as a matter of policy that the United States does not pay public performance royalties to the creators of music.  We are out of step with the rest of the world.”

And that’s a good place to leave it with the McCoalition:  They are frankly an embarrassment.

Blake will be taking the #irespectmusic message to Canadian Music Week in Toronto on Friday along with Zoë Keating.

National Public Radio stations around the U.S. have long been great friends and allies of artists.  Artists have long been great friends and allies of National Public Radio stations.  The friendship has been based on a bona fide mutual admiration.  The stations are tastemakers and the artists give the stations something to make taste about.

Make no mistake–this is what makes NPR different from Clear Channel, Pandora and Google.  We know that there are real music people at NPR stations and we are willing to do things for NPR that we would never do for the others.  Including work for free as David has said.  Including fight with our labels to let us work for free because NPR stations actually play new music.  We cut NPR stations a tremendous amount of slack and they return the favor by playing new music.  They are cool people.

This is why it seems so idiotic for NPR to take a side against artist pay for radio play by agreeing to be a human shield for “Mic Coalition” featuring Amazon, Google, Pandora, Clear Channel (iHeartMedia) and the lobbying groups Computer & Communications Industry Association, Consumer Electronics Association, the National Association of Broadcasters and the Digital Media Association.  Yes, NPR is leading the way to stand with North Korea, Iran and Rwanda and continue to deny fair compensation to artists for radio airplay.

Clear Channel, Pandora, Amazon, Google, CEA, CCIA, DIMA–we know who these people  are.  While they may not overtly loathe us, we are just a commodity to them.  We could just as well be soap.  If Clear Channel could get away with never playing a new record they’d do it.  Amazon owes its start to authors and artists, and all they’ve done is try to screw us ever since.  Pandora’s shenanigans are well known–especially since they recruited songwriter enemy #1 Chris Harrison–and Google’s indifference to artists rights was appallingly crystalized with their mistreatment of Zoë Keating.  These are not and never will be cool people.  They stab us in the back all the time, so we’re used to that treatment from them.  And after all–Clear Channel’s biggest threat is to continue not playing our records.  NPR is different, though.

So you have to ask what is sadder than someone who used to be cool.  Maybe someone who wants to stand with North Korea.  Maybe someone who wants to make sure that artists don’t get paid for radio play now or ever.

We notice when these people stab us in the back.  We thought they were our friends.  That’s why they got the freebies.  Maybe if they’re going to act like Clear Channel they should get treated like Clear Channel?

But here’s the thing about it–we’re not quite ready to believe yet that these people who are so committed to music have thrown us under the bus.  Here’s what we know–unlike Tim Westergren, they’re not sitting around thinking about it in a 13 bathroom house.

We’re also not ready to believe that NPR’s reporters are ready to abandon their journalistic principles either.  Because make no mistake–they can’t hold their heads up and report on this story when they are part of the story.  They’re not objective.  They’ve been coopted and corporatized.  And we bet nobody in the NPR powers that be bothered to ask them.

No, what we have to believe has happened here is that some suits inside the NPR organization have decided to throw their entire music and news teams under the bus.  These dimwitted suits have been lured into this “coalition” by some of the richest companies in the history of commerce that have no cultural connection to NPR whatsoever.  And make no mistake about this, either–the currency they used to buy their way into this “coalition” is the goodwill of NPR’s music and news divisions.  That’s right–our friends in music and news have been commoditized every bit as much as Pandora & Co. want to commoditize us and they’ve been sold down the river, too.

We think that’s exactly what happened and that, dear readers, is some real inside the Beltway skullduggery.  That is some low down bullshit.

So we hold out a hand to our friends and say join us in this fight.  Join us tonight.  Our cause is just and the time is now.  We would be proud to stand with you if you would have us.

More to follow: