The woes of
the recorded music industry have been well documented.  Sales of CDs
thus far this year are down 20% compared to last year.  Revenues from
digital continue to grow but not enough to prevent further downsizing.
All of which is why the labels are turning over every rock looking for
additional revenue streams such as licensing their music video
catalogues, to getting into the advertising business to creating all
sorts of derivative products around an artist and a release.  This is
the backdrop against which we are hearing rumblings about the labels
trying to get a performance right from radio so that they’d be paid
royalties from the use of their music on terrestrial radio, just as the
music publishers, songwriters and composers receive a royalty
(typically collected by a society such as ASCAP, BMI and SESAC).
Incidentally, business is booming for these societies from their
burgeoning licensing revenue

– as I’ve written in the past, more
people are consuming music than ever before, and that represents
licensing opportunities for copyright holders.

First some background: Satellite radio pays about 7% of its revenues to the labels and artists, while internet radio
webcasters pays anywhere from 12% to many times this rate
depending on how you’re counting.  What does terrestrial radio pay?
Zip.  Nada. Through a historical accident, terrestrial radio has paid
royalties to songwriters and publishers, but not the labels and
performing artists.  The LA Times has a

good rundown of this, and mentions how it may
be easier this time around given the troubles of the record industry and the
fact that satellite and internet radio have to pay such royalties (as
does most of the rest of the world’s terrestrial radio stations).  The labels have tried to claim this performance
right in the past but have found themselves outmatched politically by the powerful
broadcasters.  Chris Castle has the money quote from the LAT article: "The old saying is the reason broadcasters don’t pay a performance
royalty is there’s a radio station in every congressional district and
a record company in three". 

There will be rhetoric from both sides with the record companies
trotting out starving artists to make their case while the broadcasters
try to brand this as an extra "performance tax", which they know will be anathema
to many in Congress, and noting how they provide a promotional medium
for the labels (so much so that they’ve been paid extra for this in the
form of payola but you won’t hear them say this too loudly!). 

This makes no sense to me.
Call me an apologist for the
labels but if you take my product and build a business out of it, I
should be able to get paid for it or choose to let you use my product
for free in exchange for the promotion I’d get.   But that should be my
choice.  The government shouldn’t determine my business model by not
letting me charge you for its use.  What should really happen is for
the government to be neutral on this and let the industries determine
the price of playing music on terrestrial radio in the free market
(with the government’s consent so as not to breach anti-trust
regulation, and some ground rules like it being a blanket license so
you don’t get bogged down over the price of playing one song vs
another).  It may be that the labels get a windfall from this, or that
they decide that the price is ‘zero’ or even that the broadcasters
actually demand a per-play royalty going the other way, in which the
labels would have to pay for every time a radio station plays one of
their songs.  It would be a wonderful thing to let the market decide
the price of playing music over the air.  Now that’s a negotiation I
would tune in for…

The Hollywood Reporter had an article (hat tip to RAIN) that mentions how labels and artist groups are gearing up to lobby Congress for a performance right from terrestrial radio broadcasts.  When a piece of music is played (or "performed"), there are basically 2 rights that can be implicated – one for the underlying musical work or composition (ie the lyrics and notes that get played) and one for the actual performance.  For decades, terrestrial radio has paid royalties for the former to songwriters and composers but not the latter.  This has been unique to the US; whereas in most of the rest of the world, both groups have received a royalty for public performances. 

I’ve long advocated a level playing field when it comes to royalty rates and this is the most glaring example of the field not being level.  Performing artists should get compensated for their work regardless of the medium in which it is performed.  The argument of the promotional value of radio making up for the lack of a royalty doesn’t hold water for me — if it is indeed promotional, then the copyright holders should be willing to waive their royalty in exchange for greater airplay and promotion.   What this comes down to is what a fair rate is for the use of copyrighted works in building a business, and I just don’t think it is the place of the government to make judgments on the value of promotion vis a vis the use of the copyrighted work.  Let the market decide. 

The Future of Music coalition has a great write-up of these issues here (obviously they are biased towards artists but I think their perspective is a fair one).  The record industry could sure use a revenue stream from terrestrial radio royalties — if terrestrial radio is about a $20 Billion market in the US, a 5% royalty would be a much-needed extra billion dollars flowing to artists and labels.  They had better hustle in lobbying Congress though – there is a trend away from music being played on terrestrial radio and it will continue as new forms of distribution proliferate.

Quick take on movies I’ve recently watched:

Children of Men:  Amazing.  Cuaron has an amazing vision for dystopian London when women have stopped being able to conceive.  Best movie I’ve seen in a long time.

Spiderman 3: Entertaining but disappointing.  Some very cheesy moments and typical blockbuster fare but the special effects and grandeur make it worth watching on the big screen.

Deja Vu: Thriller starting Denzel Washington.  Okay – the premise of time travel is a stretch.  Otherwise it’s not a bad ride.

The Namesake: Brilliant.  I read the book, which was fantastic.  Mira Nair’s movie is very faithful to the book and she gets excellent performances from her actors.  A very accurate portrayal of the Indian-American experience.

Here’s a quick roundup of what I’ve been listening to of late that I would recommend:

Camera Obscura: I started listening to Let’s Get Out of This Country after hearing them on Morning Becomes Eclectic and I’m hooked.  Their twee-pop sensibility reminded me of Belle & Sebastian even before I read that they were in fact influenced by them and, in fact, Stuart Murdoch helped produce their other album.  I’ve since downloaded their prior records (Underachievers Please Try Harder and Biggest Bluest Hi-Fi) but am enjoying Let’s Get Out of This Country the most so far — Tracyanne Campbell’s vocals are haunting and stay in your mind for a long time.  I’m bummed I missed them when they came through town.

Bishop Allen: Our CTO, Bob, is a big fan and I went to see them when they played at the Middle East a couple of weeks ago.  They remind me of Ben Folds – catchy melodies with smart, ironic songwriting.  They were quite prolific last year putting out an EP every month.  eMusic have January and February’s EPs, which I recommend. 

Arcade Fire: I’m really digging the new album.  A lot has been written about them so I won’t do a full review but I highly recommend Neon Bible if you like indie rock of a grander, more anthemic nature.  It rocks.

Rodrigo Y Gabriela: This is a duo from Mexico.  I got their album, Tamacun, from ATO Records and liked it but was reminded of it when I heard them on NPR.  They were talking about how they played hotels in Mexico and then moved to Ireland and have become big there.  The guitarwork is amazing.  They do a couple of covers including Metallica’s Orion and Stairway to Heaven.  Another concert I’m bummed about having missed.  Great to play at a dinner party or when you’re driving.

Buy these albums.  You won’t be disappointed.