[Fmpro] AFM on webcasting rates

[Chris Alpiar]

Dear CHRISTOPHER KENNEDY ALPIAR,

 

Supporting Musicians in the Webcasting Rate Debate

 

In response to the March 2 Copyright Royalty Board (CRB) decision,
webcasters (funded by the trade association of major corporate webcasters
like Microsoft and Yahoo) launched a public campaign to discredit the
royalty rates and a legislative campaign to get Congress to set them aside.
Here's the lowdown from the musicians' perspective.

 

Where Do the Royalties Go?

 

Webcasters (and simulcasters) are required to pay the royalties to
SoundExchange, which distributes half the royalties to performers and half
to copyright owners. By law, 45% are payable to featured (royalty) artists,
and 5% are payable to nonfeatured

(session) musicians and vocalists. Fifty percent of the royalties are paid
to copyright owners, including performers, indie labels, and major labels.

 

One Size May Not Fit All - New Developments for Small Webcasters

 

On May 23, the AFM supported a proposal made by SoundExchange to extend
below-market rates to certain small webcasters for the current license
period of 2006-2010, in order to give them additional time to develop their
businesses under subsidized rates. SoundExchange made the proposal on May 22
at the urging of Representatives Howard L. Berman (D-CA) and Howard Coble

(R-NC) of the U.S. House Committee on the Judiciary. 

 

"Most recording musicians, including royalty artists and session musicians,
are entrepreneurs themselves," said AFM President Thomas F. Lee. "Fifty
percent of the royalties paid by webcasters go to performers, and performers
surely need that income stream to make it in their own careers. But they
also know from experience that it can be tough to build a business, and they
are willing to make some sacrifices to give small webcasters the opportunity
to grow and make the world of internet music as diverse and artist-friendly
as possible."

 

The AFM called on the small webcasters and SoundExchange to conclude a deal
promptly, and urged small webcasters to turn their attention to full and
accurate reporting of the sound recordings they transmit. "Small webcasters
all confirm that they want performers to be paid, but many of them fail to
file the reports that enable royalty dollars to flow smoothly to the
entitled performers," said President Lee. "In return for below-market rates,
small webcasters should file the required reports so performers can be paid.
Bottom line, musicians'

creative work has value and it is important that they be fairly compensated
for its use."

 

Musicians' Work Has Value and Must be Compensated

 

Although a special deal is appropriate for certain small webcasters or in
other limited circumstances, it must be remembered that over 90% of the
webcasting and simulcasting royalties collected by SoundExchange are paid by
major corporate entities like Microsoft, AOL, Yahoo!, Clear Channel and
similar corporations that have built profitable businesses based on
transmitting the creative work of performers. 

 

The CRB based its decision on massive amounts of evidence about the
webcasting business and about the businesses of performers and record
labels, all presented in detail during an eighteen month proceeding. The AFM
and its members testified about the creative work musicians do in the
recording process and about how important this new income stream is to them.
The AFM supports rates that appropriately compensate musicians for the use
of their work by these businesses.

 

In the wake of the decision, thousands of AFM members and SoundExchange
artist members have written to their Congressional representatives to
express support of the new rates. 

 

The So-Called "Internet Radio Equality Act" Is Bad for Musicians

 

Clear Channel, AOL, Yahoo!, Microsoft and other big corporations stand to
gain substantially from an aggressive push by the Digital Interactive Media
Association to cut webcasting royalties to performers and labels by 70
percent. At issue is a bill called the Internet Radio Equality Act (H.R.
2060 and S.

1353). The bill not only would lower rates for 2007-2010, it also would
require refunds to major corporations that already paid - and could well
afford - royalties for 2006.

 

Enriching the pockets of these big corporations and the multi-million dollar
paydays of their executives does nothing to foster the development of new
artists, help small webcasters, advance the growth of developing platforms
like Internet radio, or benefit the livelihoods of those who work hard to
create the music for all to enjoy. 

 

The Musicians' Association of Seattle, AFM Local 76-493, said it all in a
compelling letter

(http://www.afm.org/public/press/SeattleMusicians.pdf) to Representative Jay
Inslee (sponsor of H.R. 2060). 

 

To express your opposition to the Inslee bill, go to the links at
www.afm.org or www.soundexchange.com .

 

Sincerely,

 

Hal Ponder

Director of Government Relations

American Federation of Musicians

 

  _____  

 <http://www.alpiar.com> Christopher Kennedy Alpiar
Cinematic Composer 
2727 Gaylord Avenue 
Studio C 
Dayton, OH 45419 
310.339.9603 (Los Angeles) 
937-294-0900 (Dayton) 
 <mailto:chris at alpiar.com> chris at alpiar.com 

  _____