COPYRIGHT REFORM?: EASY—PLAY YOU PAY
“There is a widespread perception that our licensing system is broken….”
United States copyright Office, February 2015
The United States Copyright Office has just released a 245 page comprehensive report (view it here) which talks about a topic that is of a deep concern to virtually everyone connected to the music industry; copyright reform. This is a matter that has to be dealt with understanding that there are differing opinions on the subject and that past efforts at reform have failed. The Copyright Office cannot obviously create law but it can hopefully influence its creation or at the very least get the ball rolling towards reform, a point that apparently everyone agrees on.
There are various salient recommendations found in the report including a resolution of the royalties on pre-1972 songs. The C.O. recommends closing a loophole that results in digital services not paying royalties on music that existed before 1972 (the digital music services argue that the master copyright law did not exist before that date). The result would be the “federalization” of this area requiring payment rates for this music.
The C.O. also outlined “four grounding principles” that it discovered during its lengthy study:
- Music creators should be fairly compensated for their contributions
- The licensing process should be more efficient
- Market participants should have access to authoritative data to identify and license sound recordings and musical works
- Usage and payment information should be transparent and accessible to rights-owners.
If you work in music the report is worth a look although at times doing so might equate to studying a tube of toothpaste; admittedly it is a tough read in parts. Nevertheless, the importance of this matter cannot be underestimated. After all, this is how many people make their living in this industry which is why we, at Beato’s Blog, believe it is an important discussion. There is no question that reform is necessary. None. The real issue is finding a middle ground that is not only acceptable to people working in the industry but also one that makes sense in this digital age. The time for archaic formulas has passed; the law has some ground to make up, and fast. The continuing state of disconnect is not an option.
The market reaction to the report has been mixed which is no surprise. For example, on one hand we heard at this past Grammys Recording Academy president Neil Portnow announce the start of a “Creators’ Alliance” which is designed to bring together music professionals to discuss copyright reform. The Recording Industry of America merely noted that the report gave the industry a lot to “reflect on” while ASCAP’s President and Chairman (Paul Williams) responded favorably noting that the report highlights the current system’s flaws that “undervalues musical works.” Williams also noted the “inefficiency of the current system” and that it is “not appropriately responsive to the free market, particularly in our new digital world.”
However, the Computer & Communications Industry Association said that the proposed reform “would put at risk the licensing structure and platforms that play music legally and compensate music creators.” CCIA went further and indicated that policies that “unfairly discriminate against digital technologies * * * will injure innovation, artists, and listeners alike.” Similarly, the National Association of Broadcasters was critical of the report finding that it was “looking only through the lens of copyright owners.”
Interestingly, Pandora (an internet radio service) stated that is was agreeable to paying pre-1972 royalties provided that this is based on a “technology neutral-approach that affords libraries, music services and consumers the same rights and responsibilities that are enjoyed with respect to all other sound recordings.”
Regardless of which side of the aisle you are on I thought the National Music Publishers’ Association comment was the most poignant:
“The report bolsters much of what the publishing and songwriting industries have long said, that the legal framework devised over 100 years ago should not be applied to the music licensing landscape of today.”
There is little doubt—in this digital age—that reform is necessary. How do you justify, for example, a system under which songwriters are paid a different royalty from people who perform their songs? Payments differ based on where the songs are played (i.e., AM/FM or digital) however, is that a rational basis under which to compensate an artist whether it be songwriter or performer? Similarly, why should artists and songwriters receive different amounts for music sold in a store? Finally, is there a legitimate reason to call for different payments between digital service providers like Pandora and Spotify (style streaming)?
Indeed, it is somewhat comical that the one area in the music industry which is growing—streaming—is governed by laws that were based on mechanical pianos. Perhaps the Copyright Office said it best:
“From a copyright perspective, we are trying to deliver bits and bytes through a Victrola [circa 1901, Camden, New Jersey].”
It is time for the parade of horribles which has plagued our industry to be eradicated. Reform is now and necessary. Everyone agrees on that. So, let’s get the job done and discuss and negotiate factions and positions. The time for this record release party, so to speak, is way overdue. Memo to Congress: Read the report and come up with new and fair laws but remember to keep it simple—play you pay.
Ken “K Bo” Biedzynski