[Fmpro] NO one?? PRS changes?

Fri Aug 10 22:23:52 GMT 2007

Hi James -

On 8/10/07 1:19 PM, "James Ryan" <jeryan at optonline.net> wrote:

> Hi Mark -
> 
> OK, for the sake of this discussion, let's remove the value and viewers
> factor.  According to one of the negotiators at ASCAP who had no hidden
> agenda that I could detect, broadcasters don't pay ASCAP for CPA.  Zero.
> Zilch.  They only pay for content.

OK, but the broadcasters pay for a blanket license that covers all
broadcasts of music, of which of 50% of the minutes are CPA. We're not
talking about a little bit of music off to the side here...

> CPA is not part of the negotiation.

I understand that. According to my sources with the broadcasters, the
negotiation is primarily about what they paid during the last round, and how
much more/less ASCAP music they are airing since then.

> It
> may have been different in the past, but that is how it is at the moment.
> Star repertoire is all that is considered, and that's what brings in the PRO
> revenue.  In that sense, ASCAP paying royalties for CPA could be considered
> a gift, since according to him, they are not getting any income from it.

Sorry, it's over 50% of the music on the air on television! Show me one word
in a broadcaster license agreement that says that they get those music
performances for free, and I'll change my "tune" on this. But until then, my
best information from broadcasters is that they pay a blanket license for
ALL music broadcast, and there are no differentiations or breakdowns made as
to any relative performance values in blanket license deals.

It's amazing that ASCAP can take a blanket fee that covers 100% of music
performances, then arbitrarily decide that over 50% of those performances
are basically worthless and that they are being charitable by even throwing
a few pennies to the poor saps who wrote that music. We are talking about
purely arbitrary valuations here that, as far as I know, have no basis in
fact in terms of the broadcaster license agreements. Beyond the license
agreements, it's all stories and anecdotes that, amazingly, line up
perfectly with the ASCAP Board's view that songs are kind and everything
else is worth far, far less for a comparative one minute cue on television.

And Willard Hoyt, who negotiates on behalf of hundreds of local TV stations,
said at a FMN event here in LA that songs vs. score and who has hit songs,
etc. has never been part of the negotiation. It's all about market share.

If ASCAP is getting no revenue from CPA, the music performances of CPA music
should not be part of the license agreement then. That's giving away 50% of
the music on TV! And what gives them the right to give away such a massive
portion of broadcast performances for no income?

And by the way, on a per-program-license, there is a fixed rate that
broadcasters pay for CPA music - 10% of the overall license fee.

> PRO income is no longer decided by ad revenue.  It is just a negotiation
> based on "we've got the big star songwriters and composers from the big hit
> shows, and that's going to cost you."  They don't say "we've got all that
> loop music you run at 3AM during the infomercials, so you pay by the
> minute!"
> 
> Please don't throw the tomatoes at me for this.  I'm just reporting my
> discussion with a high ranking negotiator whom I respect who has NOTHING to
> do with distribution policies and nothing to gain by lying to me.  His only
> function at ASCAP is to bring money in, not pay it out.  My purpose is not
> to deflate, devalue or discourage, just to add some hopefully factual info
> to a discussion that tends to get a bit emotional and could use some
> (hopefully) factual input.

No tomatoes, I promise!  We've seen for a long time now that ASCAP's
priorities, beliefs, and motives are dictated by its Board of Directors,
who, working in secret and doing their best to shut out the membership, have
determined and maintain hugely prejudicial and discriminatory valuations for
different types of music (song vs. score, etc) unlike anything I've seen
anywhere else in the world outside the U.S. Any ASCAP staffer who doesn't
support this agenda could be in for career trouble, so I certainly don't
blame any ASCAP folks for adhering to the party "line" about what music the
board has decided is worth something and worth nothing (or next to nothing).

There is a single, simple document that would lay all this discussion to
rest. The broadcaster license agreement. It is the ultimate final authority
on what the broadcasters are paying for and aren't.

> Does BMI pay on CPA?  Last I heard, it doesn't.

They do pay CPA on networks. Not sure on cable.

Best,

Mark Northam

> 
> On 8/10/07 12:49 PM, "Mark Northam" <mnortham at gmdgroup.com> wrote:
> 
>> Trying to guess what the "viewer" cares about or values is an impossible
>> task and not appropriate, as it's the broadcaster who's paying the license
>> fees. Trying to value music based on the viewer's perception on television
>> is like asking a 6 year old whether ice cream is better than the spinach for
>> dinner. Of course viewers would rather have commercial-free TV, and 6-year
>> olds would rather eat ice cream for dinner than spinach. But neither is
>> appropriate or realistic.
>> 
>> CPA and value to the broadcaster...
>> 
>> As far as what the broadcaster cares about, obviously commercials are the
>> lifeblood of his business and represent nearly 100% of his income, so that's
>> a no-brainer in my book.
>> 
>> CPA and value to the advertiser...
>> 
>> The massive license fees paid by advertisers to use hit songs in their
>> advertising is proof of the value of music to advertisers. Often this fee
>> can be more than for use in programming.
>> 
>> CPA and value to ASCAP...
>> 
>> It is a patently dangerous act to take over 50% of the music on television,
>> ASCAP's largest income source, and inflict a whopping 97% devaluation
>> penalty on it for distribution purposes (for a minute of CPA compared to a
>> minute of song during a program). Beyond the obvious moral implications of
>> singling out this music and those who write it for this penalty, what's to
>> stop broadcasters from making the case that their license fees should
>> parallel ASCAP's distribution valuations? Financial discrimination against
>> any person or group to this degree just doesn't make sense, and as always,
>> isn't backed by any financial or statistical evidence, just old wive's tales
>> and anecdotal stories from staffers who are afraid to even put their names
>> with the stories...
>> 
>> I'll say it again.... Viewership is the only fair way to pay music
>> performance royalties, and there's already a complete system in place that
>> measures this and is the basis for the expenditure of billions of dollars of
>> advertising dollars every year.
>> 
>> 
>> Best,
>> 
>> Mark Northam
>> 
>> 
>> 
>> On 8/10/07 8:45 AM, "Pete" <musical411 at yahoo.com> wrote:
>> 
>>> If he doesn't care about the content on his shows, I
>>> doubt he cares about the content in the commercials.
>>> He just wants to get paid for the commercial airtime.
>> 
>> 
>> 
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> 
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