Record, radio reps amonst those who testified.
The Senate Judiciary Committee held a hearing today (April 26) on the future of the music industry in the digital radio revolution. But witnesses who testified, representing the record industry, the creative community and radio, targeted the new satellite radio devices that can record, disaggregate, compile into music libraries and store hours of music for as long as consumers pay for their subscriptions. The hearing came one day after Sens. Dianne Feinstein (D-Calif.) and Lindsey Graham (R-S.C.) introduced a bill to achieve so-called platform parity.
Warner Music Group chairman/CEO Edgar Bronfman Jr., addressing committe chairman Arlen Specter (R-Penn.) and other senators, underscored three points. If there will continue to be a compulsory license for performances of recordings, then at least the royalties should be set at market rates like XM Satellite Music has paid for everything from electricity to satellites and content like Oprah Winfrey and major league baseball, he said.
A performance is distinct from a distribution under copyright law, Bronfman added. A performance allows someone to listen, while a distribution allows someone to keep a copy. Different consumer experiences require different licenses and demand different royalty rates. It's not fair for satellite services or anyone else to turn performances into distributuions without paying those roytlaies. Also, the same rules should apply to services competing on all digital platforms. He urged the senators to support the Feinstein/Graham bill.
XM chairman Gary Parsons said that the company specifically designed its products to comply with the law. When it discovered that a previous device could be hacked to make stored music available on the Internet, it stopped making that product available. Parsons argued that satellite radio pays for the performances of recordings, while equipment manufacturers pay a royalty on every recording device sold under the Audio Home Recording Act. As a result, an additional royalty should not be paid for recording and storing the music.
Mark Lam, chairman/CEO of Internet webcaster Live365 testified that digital radio pays for every song performed, and pays much more than satellite radio. He urged that all digital services be treated equally.
Songwriter/artist Anita Baker and songwriter Victoria Shaw urged the senators to protect the creators' rights. Todd Rundgren talked primarily about his bad experiences with major record labels and at one point was unable to answer Sen. Patrick Leahy's question on whether the transmission of music from XM to a device for storage was a distribution rather than a performance.
Although over-the-air broadcasting is not directly involved in the issues discussed today, Bonneville Broadcasting president/CEO Bruce Reece also testified. He told Billboard.biz that he was there to help broadcaster remain vigilant and to make sure the game doesn't change.
Additional reporting by Tony Sanders in Washington, D.C.