Casey Rae is the director of Future of Music Coalition, a national nonprofit organization for musicians. He is also an adjunct professor at Georgetown University as well as a songwriter and musician.
In 1941, “Chattanooga Choo-Choo” was the biggest hit in the land, thanks to -- what else? -- the radio. Radio's popularity owes much to songs like this -- and the songwriters and publishers who enabled us to hear them. Back then, the balance of power in the music industry was tilted towards the performing rights groups ASCAP and BMI, organizations that acted as gatekeepers to the world’s most valuable musical repertoires -- so much so that the US Department of Justice took action that same year to balance the scales. The result of this intervention are consent decrees that, to this day, govern how radio -- whether AM/FM or digital -- licenses compositions and whether we, as listeners, get to hear them on the dial or on our electronic devices.
Here in 2014, where "G I R L" tops the charts, the listening environment extends far beyond the "living room radio." New forms of broadcasting have emerged that allow listeners to customize “stations” to their individual tastes, facilitating discovery and opening up new revenue streams. The amount of compensation and the way rates are determined, however, have recently sparked intense debate. Congress is currently grappling with these issues, and there’s understandable concern in the artist community over where the evolving situation is heading.
Even with all these developments, it’s important not to lose sight of the benefits of systems that have been in place for decades and the reasons for them. Take, for example, the aforementioned consent decrees, which set the parameters for radio services and music publishers. Under these rules, songwriters are paid their share directly, meaning the songwriters’ money doesn’t go through the publishers -- it’s cash in pocket to the people who composed the song. This system also means that smaller, independent publishers can just as easily make catalog available as their multinational peers. That kind of leverage is crucial.
The “blanket licenses” within the consent decrees are what made radio possible to begin with, and this arrangement remains useful to new services that may not have the capital or clout to cut direct deals. The incredible growth of Internet radio, for example, would have been inconceivable had fledgling webcasters been compelled to negotiate with the all of the music publishers individually. Without an easier way to obtain permission to play songs, Internet radio might never have happened.
Leverage for songwriters and smaller publishers, one-stop shopping for emerging platforms -- seems like a pretty good system. But not everybody thinks so. In fact, in an attempt to obtain higher rates through direct deals, the bigger music companies have attempted to pull catalog from performance rights organizations for certain digital uses. Such maneuvers have been rebuffed by the courts, which have ruled that publishers are “all in or all out” with regard to the rights groups. It’s easy to see why publishers want to go direct, especially when you look at what the major labels are able to negotiate for other digital uses. Still, any short-term gain may end up creating fissures that will be difficult to repair. Balkanization means that the marketplace would once again favor the biggest players over the little guys -- the very dynamic the consent decrees were put into place to correct. Then there’s the not-so-small matter of songwriter compensation. What guarantees do the creators of the music have that that their share will be fairly apportioned? We also badly need transparency in today’s music business. Direct deals aren’t exactly known for this.
Songwriters and publishers have every right to push for rates that reflect the value of their contributions, especially as Internet radio grows. Yet those of us in the business would be wise to consider the benefits of the consent decrees. Being paid directly with fair splits is a huge deal, but we should also keep the doors open for new marketplace entrants. Legal, licensed music services mean more ways for our music to be heard and more revenue streams available to us. Fewer licensed services means more excuses for pirates, as well as the same kind of gatekeepers that have prevented so much great music from being played on commercial AM/FM radio.
The promise of Internet radio and other emerging services is that they provide an alternative to the same-old-same-old programming of AM/FM. By balancing discovery with artist compensation, these new radio platforms could reshape the medium into something more appealing to creators and fans. To some extent this promise has been fulfilled: Internet radio is now the fastest growing music industry sector. No doubt existing structures for compensation could be improved, starting with Congress compelling AM/FM broadcasters to compensate performing artists, which, unlike the rest of the developed world, they aren’t obligated to do and which new radio platforms enabled by compulsory licensing are already doing.
As we haggle over the rate standards and percentages, we should also keep in mind how creators are paid. The blanket licenses, fair splits and lower barriers to entry enabled by the consent decrees are just as important as they were in Glen Miller's era. Perhaps even more so.
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