Two legendary artists have sounded off against lower royalties for webcasters. On Sunday, Pink Floyd’s Roger Waters, David Gilmour and Nick Mason penned an op-ed in USA Today (which Billboard.biz received permission to reprint here) warning fellow musicians about the rate cut being sought by Pandora. On Tuesday MSNBC’s theGrio blog posted an op-ed by singer Martha Reeves argued musicians should be paid “a fair value” for the use of their works.
The op-eds follow efforts by Pandora to reduce its royalties to rights holders. Pandora has supported legislation that could reduce the performance royalties it pays to SoundExchange. It is also trying to lower its royalties paid to publishers. Its recent purchase of a terrestrial radio station was a move to obtain a lower rate from ASCAP.
The impact of lower royalties from ASCAP or other performance rights organizations is on display in a post by musician David Lowery is getting some attention. Lowery shared his recent PRO statement in order to show the songwriters’s earnings from public performances. Last quarter, the song “Low” (Lowery has a 40% share) earned $17 for 1.16 million streams on Pandora, $181 for 179 plays on SiriusXM (each play is heard by numerous people) and $1,374 for 18,797 plays on terrestrial radio (again, each play is heard by numerous people).
Pink Floyd and Reeves talked about possible decreases in the royalties paid to the performing artists. Lowery focused on the amount paid to songwriters. Although they addressed different copyrights, the message is the same: Pandora and other webcasters don't deserve a break.
The Pink Floyd and Reeves op-eds featured a number that’s commonly used on the artist’s side of the debate: 85%. That’s the decrease in statutory royalty rates that will supposedly come from the passage of a bill similar to the defunct Internet Radio Fairness Act that was introduced last year. The 85% figure is calculated by starting with Pandora’s SoundExchage royalties as a percent of revenue (50%) and assuming the law would give Pandora the same percent-of-revenue rate as SiriusXM (8.5%).
The 85% figure is often stated as a certain outcome. In reality, an effectiveness publicity campaign against the rate cut can help guarantee any bill that passed would not have such a large impact. SoundExchange and the RIAA could get legislation to counter the Pandora-supported legislation, and the language of a final bill would, at the very least, be a hybrid of the two bills. Or SoundExchange and the RIAA squash whatever Pandora-supported legislation is introduced and the two sides make their cases before the Copyright Royalty Board for new rates that would start in 2016.
Or legislation could end up favoring artists. "Perhaps Congress will pass a version of the 'Interim FIRST Act,' draft legislation circulated last year that would require AM/FM radio to pay higher digital royalties and establish the same market rate standard for all digital radio services," writes Reeves. "Or perhaps Congress will end the injustice once and for all by passing the Performance Rights Act."