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.
Pandora Ruling Has Far-Reaching Implications For U.S. Publishing Industry
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.
Pandora/ASCAP Ruling: Judge to Sony/ATV, UMPG, Others – You’re Either 'All In' or 'All Out' (Analysis)
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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