@ColinRushing of @SoundExchange: Congress Should Eliminate the Market Distortion of AM/FM Radio’s Free Ride on the Backs of Artists

[SoundExchange Chief Legal Officer Colin Rushing lays it down before Senate Judiciary]

Throughout the 80 years that the terrestrial radio performance right has been under discussion, broadcasters have argued in many ways that they are special and deserve different treatment than other business interests. Their arguments that their special status should result in them not paying performers– never valid – have now also been overtaken by events.

They say AM/FM radio is important because it is free, but they are no different than any other free ad-supported music platform available to consumers. They argue that providing public service announcements and news information is a reason to require music to subsidize their platform, and yet many music platforms provide these same services, not to mention that most digital music platforms are delivered over devices that provide local emergency notifications.

To the extent that AM/FM radio may be promotional, this is not a trait that sets them apart from other music services that compensate performers. Nor does it justify an uncompensated “taking” of musicians’ property. Rate-setting proceedings and licensing negotiations take promotional value into account as a matter of course, along with many other variables.

The potential for promotion exists in a lot of licensing arrangements. Television broadcast of a professional basketball game may promote a local team, but no one would suggest that the NBA should surrender the broadcast rights for free because of that “promotional value.” Why should music be any different?

Read his written testimony on the SoundExchange website.

Press Release: @SoundExchange, entertainment community ask Congress for financial relief during coronavirus pandemic

PRESS RELEASE

Today, SoundExchange joined organizations from across the entertainment community to ask Congress to address the unique nature of our community’s work when it develops an aid package in response to the coronavirus pandemic. Payroll tax holidays, paid leave, and other types of assistance have been raised for consideration by our nation’s leaders, but they may never reach the many workers in the music industry who don’t have a single, long-term employer.

You can find the full text of the letter below or download a pdf here.

Dear Speaker Pelosi, Leader McConnell, Leader McCarthy, and Leader Schumer:

As united representatives of the large and diverse American entertainment community, we offer our sincere gratitude for your immense efforts to address the COVID-19 pandemic and to provide much needed aid.

We understand the sacrifices our country is making and appreciate our shared responsibility. We will make the necessary adjustments to our lives but, unfortunately, there is no option for many in the entertainment community to work from home. Our home is on the road, on the studio lot or in the theater, in venues across the country that must close during the pandemic, in front of live audiences or with cast members who cannot gather. For now, those performances – and our jobs – have vanished, along with the costly and personally devastating investments we can never recover. Without help, we know that many in our community will find themselves homeless, hungry, and unable to tend to their medical needs.

The economic pain cuts even deeper, touching not only performers and musicians, but also managers, producers, promoters, stagehands, drivers, and countless others who are feeling the immediate repercussions of this new reality. This unprecedented economic loss caused by canceled performances and production shutdowns is being played out in bars, nightclubs, theaters, stadiums, concert halls, studios, and festivals in every state, sidelining thousands of workers.

The entertainment community will do what it can to support its members, but this moment calls for the unmatched capabilities of Congress. As you navigate the difficult path to providing necessary aid to distinct sectors of our economy, we ask that you specifically address the unique nature of our work. Payroll tax holidays, paid leave, and other typical assistance may never reach many in the entertainment community; in fact, direct financial aid remains one hopeful – and perhaps best – solution to replacing lost income and offering some semblance of economic sustainability. 

We propose a similar benefit to the Emergency Paid Leave in Division C of HR 6201, along with emergency unemployment insurance access, available to those who cannot work due to a canceled performance or a production shut down. This fund and expanded unemployment insurance access and benefits would ensure that hundreds of thousands of families across the country can continue to pay rent, put food on the table, and care for their children during this public health emergency. In addition, we encourage you to be as inclusive as possible when crafting emergency paid leave, tax credits, and other programs – the unique nature of our industry means rules that require beneficiaries to have had a single, long-term employer will simply leave our entire workforce behind.

We all look forward to the end of this crisis. Certainly, entertainment will help us get through it. But we must take care of the many people in the American entertainment community who will help us heal, rebuild, and bring us back together, in public and in spirit.

Thank you very much.

Sincerely,

Actors’ Equity

Alliance for Recorded Music (ARM)

American Association of Independent Music (A2IM)

American Federation of Musicians (AFM)

Americana Music Association

Artist Rights Alliance (ARA)

The Azoff Company

The Broadway League

California IATSE Council

Christian Music Trade Association (CMTA)

Country Music Association (CMA)

Gospel Music Association (GMA)

CreativeFuture

Department for Professional Employees, AFL-CIO (DPE)

Digital Media Association (DiMA)

Directors Guild of America (DGA)

Entertainment Union Coalition

Full Stop Management

Global Music Rights (GMR)

Independent Music Professionals United (IMPU)

International Alliance of Theatrical Stage Employees (IATSE)

International Bluegrass Music Association (IBMA)

Live Nation

Music Artists Coalition (MAC)

Music Business Association (MusicBiz)

Music Managers Forum – US

Nashville Songwriters Association International (NSAI)

National Music Publishers’ Association (NMPA)

Paradigm Talent Agency

Recording Academy

Recording Industry Association of America (RIAA)

Screen Actors Guild – American Federation of Television and Radio Artists (SAG-AFTRA)

SESAC

Songwriters of North America (SONA)

SoundExchange

Southern Gospel Music Guild

United Talent Agency (UTA)

William Morris Endeavor (WME)

Writers’ Guild of America, East

@SoundExchange and @TXMusicOffice Host SoundExchange Session in Houston — Artist Rights Watch

[Editor Charlie sez: Great to see Texas Music Office and SoundExchange partnering to give Texas artists and producers a chance to sit down directly with SX to get their questions answered on digital royalties and payments.  And it’s not even SXSW!  More of this please!]

via @SoundExchange and @TXMusicOffice Host SoundExchange Session in Houston — Artist Rights Watch–News for the Artist Rights Advocacy Community

@TatianaCirisano: @SoundExchange Asks @USTradeRep to Help Artists Get Paid Abroad — Artist Rights Watch

[I]n a new filing with the [US Trade Representative] for its annual “Special 301” review of intellectual property rights protection, SoundExchange says that six countries deny full national treatment to American producers and performers, because “those countries are not paying them for the same uses that these countries are paying their own national producers and performers” — specifically, for traditional broadcasts, public performances and some digital uses.

The countries are the U.K, France, Australia, Japan, the Netherlands and Canada.

Read the post on Billboard

 

via @TatianaCirisano: @SoundExchange Asks @USTradeRep to Help Artists Get Paid Abroad — Artist Rights Watch–News for the Artist Rights Advocacy Community

PRESS RELEASE: SoundExchange Updates Client Portal to Provide Faster Payments and Transparency

PRESS RELEASE


New Feature Introduces Self-Service Management for Overlapping Claims

WASHINGTON, DC – November 6, 2019 – SoundExchange today introduced a suite of new features to its online client portal, SoundExchange Direct (SXDirect), that provide music creators with increased control and transparency into their royalty accounts through greater self-service. The groundbreaking “Overlaps & Disputes” tool notifies rights owners when other parties make competing ownership claims, enabling them to resolve overlaps as they occur. The efficiencies provided in this tool will result in fewer royalties being held up by disputes and thus faster payments.

“We are committed to raising the bar for the industry by providing innovative solutions for music creators,” said Michael Huppe, CEO of SoundExchange. “Music creators deserve to be paid fairly and accurately, and these new capabilities ensure they receive their royalties faster, too.”

To date, SoundExchange has distributed more than $6 billion in royalties to music creators, including distributing nearly $1 billion in 2018 alone.

“SoundExchange empowers rights owners and their representatives by focusing on transparency and efficiency,” said Paul Smelt, Co-Founder and Director of Global Master Rights. “These major updates will provide greater insight into catalog usage and significantly improve the overlaps and disputes process, distinguishing SoundExchange as one of the most user-friendly collection management organizations in the world.”

The recent update significantly expands the tools available to rights owners, enabling them to manage overlapping claims and upload new sound recordings directly into the SXDirect portal:

  • Overlaps & Disputes: provides rights owners with instant notification when there are overlapping claims to a sound recording and provides them with the ability to maintain or relinquish claims using a dashboard in SXDirect.
  • Submit Recordings: provides rights owners with a dashboard in SXDirect where they can add new sound recordings by providing the International Standard Recording Code (ISRC) and related metadata. These new sound recordings receive immediate validation so that they can be immediately accepted into SoundExchange’s Repertoire Database and therefore become available to claim and associate rights.

“By introducing this portal update, SoundExchange is once again demonstrating they are the vanguard on transparency in the music industry. Combining this with their powerful new self-service features, empowers sound recording copyright owners to submit ISRCs, make new claims, and resolve overlaps faster to maximize their royalty streams with a spirit of collaboration,” said Rob Gruschke, Vice President of Global Collective Rights at Beggars Group Media.

Additional features were introduced that are available to all music creators who use the SXDirect portal:

  • Associated Recordings: provides a display of all sound recordings currently associated with the music creator’s account and the claim percentage for each track.
  • Search & Claim: provides a way to search SoundExchange’s complete database of sound recordings, which includes ISRCs provided by rights owners and tracks that have been reported to SoundExchange as played but have not yet been associated with a rights owner-provided ISRC.
  • Upload History: provides music creators with a history of files that have been uploaded to SXDirect. These files include “Search & Claim” carts or rights owner-submitted sound recordings.

“The targeted use of automation gives music creators greater control of their accounts through self-service.  In this way we ensure that the business of music keeps up with the pace of their creativity,” said Jonathan Bender, Chief Operating Officer at SoundExchange.

These updates are now available to all music creators who have SXDirect accounts. Account holders can learn how to use these features by reading a new series of posts published to SoundExchange’s blog.

 

 

@mikehuppe: Broadcast Radio Makes an Ironic Plea for Fairness — Artist Rights Watch

SoundExchange’s CEO says it’s time radio starts paying all music creators fairly for their work.

On Monday, a group of radio broadcasters penned a letter in support of the National Association of Broadcasters’ (NAB) push for deregulation of the $14 billion radio industry. Their letter was based on the NAB’s petition to the FCC this past June, in which the NAB sought to allow expanded broadcaster ownership of radio stations (i.e., increased consolidation) throughout the country. The NAB’s justification: broadcasters must adjust their business model to the realities of the new streaming world.

As a representative of the many creative parties who help craft music, we are frequently on the opposite side of issues from the NAB. And while I can’t comment on NAB’s specific requests, I was delighted to find so much common ground in their FCC filing in June….

I agree with the NAB that the law should “finally adopt rules reflecting competitive reality in today’s audio marketplace” and should “level the playing field” for all entities in the music economy.

If radio truly wants to modernize, it can start by taking a giant leap into the 21st century and paying all music creators fairly for their work. Stop treating artists like 17th century indentured servants, just so radio can reap bigger profits. If radio wants to have rules that reflect the music industry of today, then that should apply across the board.

We should resolve this gaping unfairness to artists before we begin talking about allowing radio to consolidate even further.

 

Read the post on Billboard

h/t Artist Rights Watch

SoundExchange Reaches Out to Help Texas Flood Victims

Press Release

For SoundExchange members based in Houston and throughout the Gulf Coast, SoundExchange wants to make sure you receive your royalties in this time of tragedy.

sound exchange logo

SoundExchange’s Senior Director of Artist and Industry Relations Linda Bloss-Baum sent the Texas Music Office a statement today that reads:

“Our next royalty distribution will be made in late September.  If you currently receive your SoundExchange royalties via physical checks, you can update your account so we can send you your royalties via Direct Deposit. We hope this makes it easier for you to access your royalties at this difficult time. To update your account, please complete our Direct Deposit form.

“We will also need either a voided check OR a bank authorization letter. If you use a bank authorization letter, the bank authorization letter should be on bank letterhead with your account information (routing number and account number). It should indicate the name on the account, and be signed by a bank official.

“We have a dedicated member of our industry relations team standing by to expedite getting our artists and rights holders set up to receive their royalties via direct deposit.  Please send the form and support document to tiarap@soundexchange.com and we will rush to get it processed for you.”

SoundExchange and BandPage Collaborate to Put $2M in Unclaimed Royalties in Musicians Pockets | Music Industry News Wire

Music Industry Newswire reports on some good news!

WASHINGTON, D.C. /Music Industry Newswire/ — SoundExchange, a music industry non-profit focused on distributing digital performance royalties to recording artists and record labels, and BandPage, a leading solution for musicians to manage their presence online, recently teamed up to notify recording artists of unclaimed royalties with SoundExchange.

Together the two groups identified more than $2 million in unclaimed digital performance royalties for thousands of BandPage musicians who have not yet registered with SoundExchange. Bandpage musicians with unclaimed performance royalties will be notified by BandPage directly via email.

READ THE FULL POST AT MUSIC INDUSTRY NEWS WIRE:
http://musicindustrynewswire.com/2012/08/07/min5749_140533.php/soundexchange-and-bandpage-collaborate-to-put-2m-in-unclaimed-royalties-in-musicians-pockets/

Muzzling Free Speech By Artists: IRFA Section 5 Analysis

The “Internet Radio Fairness Act” has a lot to concern artists. Today, we’re continuing our section-by-section analysis of the proposed legislation because knowing is half the battle. We’ve been looking at how the bill would affect current law: strikethrough text shows what the bill would remove, while underlined text shows what it would add.

SEC. 5. PROMOTION OF A COMPETITIVE MARKETPLACE.

17 USC § 112 – Limitations on exclusive rights: Ephemeral recordings

(e) Statutory License.—

(2) Notwithstanding any provision of the antitrust laws, any copyright owners of sound recordings and any transmitting organizations entitled to a statutory license under this subsection may negotiate and agree upon royalty rates and license terms and conditions for making phonorecords of such sound recordings under this section and the proportionate division of fees paid among copyright owners, and may designate common agents, on a nonexclusive basis, to negotiate, agree to, pay, or receive such royalty payments. Nothing in this paragraph shall be construed to permit any copyright owners of sound recordings acting jointly, or any common agent or collective representing such copyright owners, to take any action that would prohibit, interfere with, or impede direct licensing by copyright owners of sound recordings in competition with licensing by any common agent or collective, and any such action that affects interstate commerce shall be deemed a contract, combination or conspiracy in restraint of trade in violation of section 1 of the Sherman Act (15 U.S.C. 1).

17 USC § 114 – Scope of exclusive rights in sound recordings

(e) Authority for Negotiations.—

(1) Notwithstanding any provision of the antitrust laws, in negotiating statutory licenses in accordance with subsection (f), any copyright owners of sound recordings and any entities performing sound recordings affected by this section may negotiate and agree upon the royalty rates and license terms and conditions for the performance of such sound recordings and the proportionate division of fees paid among copyright owners, and may designate common agents on a nonexclusive basis to negotiate, agree to, pay, or receive payments.

(2) For licenses granted under section 106 (6), other than statutory licenses, such as for performances by interactive services or performances that exceed the sound recording performance complement—

(A) copyright owners of sound recordings affected by this section may designate common agents to act on their behalf to grant licenses and receive and remit royalty payments: Provided, That each copyright owner shall establish the royalty rates and material license terms and conditions unilaterally, that is, not in agreement, combination, or concert with other copyright owners of sound recordings; and

(B) entities performing sound recordings affected by this section may designate common agents to act on their behalf to obtain licenses and collect and pay royalty fees: Provided, That each entity performing sound recordings shall determine the royalty rates and material license terms and conditions unilaterally, that is, not in agreement, combination, or concert with other entities performing sound recordings.

(3) Nothing in this subsection shall be construed to permit any copyright owners of sound recordings acting jointly, or any common agent or collective representing such copyright owners, to take any action that would prohibit, interfere with, or impede direct licensing by copyright owners of sound recordings in competition with licensing by any common agent or collective, and any such action that affects interstate commerce shall be deemed a contract, combination or conspiracy in restraint of trade in violation of section 1 of the Sherman Act (15 U.S.C. 1).

(4) In order to obtain the benefits of paragraph (1), a common agent or collective representing copyright owners of sound recordings must make available at no charge through publicly accessible computer access through the Internet the most current available list of sound recording copyright owners represented by the organization and the most current list of sound recordings licensed by the organization.

This section is far more troubling than it first appears.

The effect of IRFA as a whole would be to reduce the amount of royalties that companies like Clear Channel, Sirius XM Radio, and Pandora have to pay to recording artists.

For most companies, arrangements between buyers and sellers are negotiated on the open market. But for a number of reasons, the Copyright Act establishes a compulsory license for certain uses of digital sound recordings with the license terms and rates set by the Copyright Royalty Board.

So companies like Sirius XM and Pandora already have an advantage that many businesses don’t have: government-guaranteed access to the content that drives their business at a rate set by law. Compulsory licensing is compulsory: there is no opting in or opting out for artists.

But compulsory licensing doesn’t preclude direct licensing under the current law — that is, without IRFA. Copyright owners are — and always have been — free to negotiate privately with copyright users. Sirius XM has been particularly aggressive in recent years in pursuing such direct licensing, and Clear Channel is right behind Sirius with their own direct deals.

What does this mean for artists? First of all, in practice, this means that the rates set by the Copyright Royalty Board act as a ceiling — no licensee is going to pay more than the compulsory rate. They are guaranteed access to every sound recording on the market at the CRB’s rates.

So why would recording artists or sound recording owners want to accept a deal that gives, say, Sirius XM more rights for less money?  (Bearing in mind that many artists own their sound recordings.)

Here’s one reason. During recent proceedings, Sirius XM Executive VP David Frear testified that “Among other things, [record companies] recognized that by entering into direct licenses with Sirius XM, they gained the potential for enhanced airplay and greater exposure for their recording artists.” Left unsaid was the corollary to this: refusing to enter into a direct license could mean less (or no) airplay.

Direct licensing, in conjunction with a compulsory licensing scheme, thus gives licensees all stick and no carrot. And when you’re terrestrial radio giant Clear Channel, or the only satellite radio provider, or Pandora — which accounts for 37% of all digital sound recording royalties — that’s a pretty big stick. (Pandora and Sirius XM together account for 90%.)

Section 5 of IRFA is perhaps the most pernicious part of the bill, for it would make it illegal for anyone to criticize digital sound recording licensees. If IRFA becomes law, artists and artist organizations will need to watch what they say in public in opposition to Sirius and Clear Channel’s direct licensing efforts.

This is not an exaggeration or hyperbole — it is already happening. The provisions of Section 5 seem to be a direct response to groups like American Association of Independent Music (A2IM), SoundExchange, and major record labels cautioning recording artists about the drawbacks to a push by Sirius XM to license recordings directly following the latest rate-setting proceedings.

In March 2012, Sirius XM filed a lawsuit against SoundExchange and A2IM alleging anti-trust violations for their efforts to resist what SoundExchange and A2IM saw as a raw deal from Sirius XM’s direct licensing push. Now, for starters, it might seem odd that a company with an effective monopoly on satellite radio is complaining that a non-profit nonexclusive collecting agency and a trade association representing hundreds of small companies are violating anti-trust laws.

But the allegations that Sirius made in the lawsuit should concern any artist. Sirius XM essentially argues that various public communications concerning its direct license program amount to anti-competitive behavior — not anti-competitive conduct, just speech.

One such communication identified in Sirius XM’s anti-trust suit includes this August 2011 blog post by A2IM. In its lawsuit, Sirius XM points specifically to a paragraph that states:

In general statutory licenses have been good for the independent music label community as statutory licenses insure that all music label copyrights, whether those of the major labels or those of independent labels or artists, are treated equally and paid the same rate amount for each stream (play) of that music. Under direct licenses there are cases where independents have received less than equitable rates.

And lest you think only industry groups would be caught in the crosshairs, it’s not unlikely that artist advocacy organizations could face legal liability. Sirius XM also refers to a statement made by the Future of Music Coalition, in its November 2011 newsletter:

Here at FMC, we want artists to get the money they’re owed for the use of their music on any platform. The statutory rate for digital performance plus direct payment via SoundExchange is an important piece of the compensation puzzle for creators. Bypassing it might benefit the bottom lines of major corporations in the short run, but it’s a dangerous thing for performing artists.

This is the type of explanatory speech — not conduct — that Sirius XM thinks is illegal and IRFA definitely would outlaw. Again, it would make it a violation of the Sherman Act for “any copyright owners of sound recordings acting jointly, or any common agent or collective representing such copyright owners, to take any action that would prohibit, interfere with, or impede direct licensing.” Whenever two or more artists are gathered, Sirius XM (and Clear Channel, and Google) will be there.

The statements above are already alleged by Sirius XM to violate existing anti-trust laws. To be clear, the allegations are absurd — these statements are clearly not urging an unlawful “boycott” against Sirius XM’s direct licensing, and even if they were, Sirius doesn’t lose out since it already has access to every sound recording on the market under the compulsory license. There’s also a much simpler and way less conspiratorial explanation to the public response that Sirius complains of: maybe the labels who spurned Sirius XM’s proposal just didn’t like the deal. But Section 5 of IRFA would ensure that the law explicitly prohibits any criticism of direct licensing deals.

So if IRFA becomes law, if you don’t like the deal, you better keep it to yourself.