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News: Recording Artists Outraged By Corporate Webcasters' Money Grab
Posted on Tuesday, May 15 @ 08:16:59 MDT by roadrash
 News and CommentarySenate bill would enrich mega-corporations like Clear Channel and AOL as much as $100M at the expense of artists and record labels.

In a blatant attempt to strip artists and record labels of their hard-won royalties for the use of their sound recordings on Internet radio, proposed legislation in the U.S. Senate would not only invalidate the March 2, 2007 ruling of the Copyright Royalty Board (CRB), it would roll back by 70 percent pre-decision rates already paid by webcasters.

An analysis by SoundExchange shows that the proposed rollback in royalties would save big, highly profitable corporations like Clear Channel, Yahoo!, AOL and Microsoft $100 million or more in royalty payments during the rate period 2006-2010, and that's only if there is no growth in listeners. However, expected growth in listeners during the period will result in an even greater windfall.

"This legislation is a money grab by big corporations like Clear Channel and AOL at the expense of artists and labels," said John Simson, Executive Director of SoundExchange. "I don't see any other way to characterize this as anything other than naked corporate greed. It's just not fair to artists."

Under the proposed legislation SoundExchange's analysis shows that, for 2006, $12 million in royalties would have to be paid back to the 20 largest webcasters. By contrast, under new rates set by the CRB, those same webcasters would owe only $850,000 in retroactive royalty payments for 2006. The windfall to big webcasters is even more dramatic in 2007 when, assuming no growth in listeners, the 20 largest webcasters would owe $24 million in royalty payments, but under the proposed legislation, would only owe $5 million to the people who create the music upon which they build their businesses.

The legislation is being driven by the SaveNetRadio coalition. Though the coalition purports to represent some artists and some small webcasters, it is in fact funded by the big webcasting industry. Supporters of SaveNetRadio have been mislead into thinking that advancing this legislation would somehow help small webcasters and artists, when, in fact it would give more money and power to the big webcasting industry. "The fact that they would advance the profit- grinding agenda of big webcasters without regard to the artists they are hurting speaks to SaveNetRadio's true mission and evident hypocrisy," said Rebecca Greenberg, National Director of the Recording Artists' Coalition. "If SaveNetRadio really cared about artists, they wouldn't be fronting for the big webcasters like this."

Simson noted, "There are better, targeted ways to help the small webcasting businesses without resorting to selling out to the likes of Clear Channel." In fact, SoundExchange has told Congress that it is actively engaged in seeking business solutions that could accommodate the needs of small webcasters while protecting the hard-won, fair royalties that artists deserve.

This bill, introduced in the House by Reps. Jay Inslee (D-WA) and Donald Manzullo (R-IL), and now in the Senate by Sens. Ron Wyden (D-OR) and Sam Brownback (R-KS), would arbitrarily reverse the painstaking work of the CRB, the three-judge panel created by Congress at the request of the webcasters three years ago. The CRB panel listened exhaustively for 18 months to all interested parties, heard from dozens of witnesses in weeks of live hearings, read countless depositions and examined tens of thousands of pages of evidence focused on, among other things, the services' ability to pay and the value of music in the marketplace. In contrast, the proposed bill presents no factual or economic basis for rejecting the reasoned decision of the CRB. This legislation, if passed, would come at the expense of hard-working artists, who, on average, received just $360 each in royalties from webcasting in 2006.

"Asking Congress to override a valid, objective process that Congress created while arbitrarily dismissing the painstaking work of these expert judges who clearly determined a fair rate for artists and labels that these webcasters can clearly afford makes no sense," added Simson.

 

 
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