Music Copyright Laws Need Clarity, Platform Neutrality, Say Panelists
Music copyright laws are opaque, outdated and structured to create unfair advantages within the music industry, said panelists at the Future of Music Summit. Government and music industry officials repeated recent calls from lawmakers and government officials to strengthen public performance rights for the broadcasting of sound recordings. The current royalty structure too heavily favors certain music dissemination platforms, giving the impression that Washington “can pick the winners and the losers in the market,” said Jim Griffin, managing director of OneHouse, which consults on digital art delivery issues. Industry stakeholders and the government need to bring clarity to copyright laws so artists can earn fair pay and protect their work, panelists said.
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Monday’s event followed several months during which members of Congress, the USPTO and the Commerce Department have supported significant changes to copyright law. In July, the Commerce Department’s Internet Policy Task Force released a green paper that supported a broadcasting right for sound recordings and said there would be a value in rationalizing the rate-setting standards for different music services, said USPTO Chief Policy Officer and Director-International Affairs Shira Perlmutter, who worked on the report. In September, Rep. Mel Watt, D-N.C., introduced a bill that would do just that (CD Oct 1 p7). That day, the U.S. Copyright Office also released a report outlining an alternative, three-member tribunal within the office to settle copyright infringement claims valued under $30,000 in damages (CD Oct 1 p8).
These are the combinations of regulatory, legislative and voluntary changes needed to give authors the independence to “make their way by practicing their craft,” said Jacqueline Charlesworth, the Copyright Office general counsel. The office’s proposal of a “voluntary system that would be less expensive” and government sponsored is a way to empower musicians, she said. “Regular people can’t access the courts” to defend their rights, she said, adding that bringing a lawsuit in a federal court can cost hundreds of thousands of dollars.
Charlesworth and Perlmutter said the government should look into royalty rate-setting for music platforms, but didn’t say what role it should ultimately play. “Should we be preferring some platforms over others?” Charlesworth asked. “Or should we be neutral?” The government should definitely be neutral, Griffin said. It’s ridiculous that some platforms -- including online streaming service Pandora -- are paying nearly three quarters of their revenue in royalties while satellite radio pays under 15 percent and other services pay nothing, he said.
Declining to set a statutory royalty rate will allow the proliferation of “direct deals,” in which a distribution service such as Clear Channel directly sets royalty rates with a label like Warner Music, said Recording Musicians Association International Vice President Bruce Bouton at the event. Organizations such SoundExchange, which represent copyright owners, will be left out of the deal, he said. “If there’s not a statutory rate, they're going to cheat,” Bouton said. “Eventually, if they get enough major labels buying into this brand, the whole SoundExchange thing is going to fall apart and musicians are going to be left out in the cold."
NAB disagrees, according to statements released when Watt introduced his bill. “NAB believes market-based negotiations like the recent Warner Music-Clear Channel accord demonstrate that this issue is already being addressed in the free market,” said NAB spokesman Dennis Wharton. “This legislation would impose new costs on broadcasters that jeopardize the future of our free over-the-air service.” NAB instead supports the Local Radio Freedom Act, a resolution that has 183 congressional supporters, and would oppose “any new performance fee, tax, royalty, or other charge” on local broadcasters. (cbennett@warren-news.com)