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Uncle Sam Helps the RIAA Create Monopoly Which Could Deprive Artists of Choices and $$$
It seems that no one is happy with the recent decisions handed down from the Librarian of Congress. He postulated that Internet radio stations and radio stations using the Internet for simulcasting will have to pay a "pay for play" fee of .07 cents (or $.0007) per performance per listener to the authors of the sound recordings (i.e., record companies, producers, artists and musicians). Radio stations say the fee is too high and the RIAA says it's too low. Who's right? It doesn't matter, really, because artists will not likely see their fair share of this new money. Here's why:
The Librarian's ruling (which can be read in full at "Copyright, Digital Audio Transmissions, Performance Right, Sound Recordings Final Regulation") states that only one company will be collecting virtually ALL of the estimated millions on behalf of artists, musicians and record companies and guess who that company is… the RIAA. Yes, the RIAA will be collecting the vast majority of this new money and after taking a "reasonable" administrative fee, they will deduct the share due to their members (the Big Five major labels and all affiliates) and then pass on the artist's share (45% by statute) to each artist individually.
Which artists will then be getting the 45%? Well, that depends on how "significant" you are to the RIAA and their web royalty collectors known as SoundExchange. SoundExchange's current plans are to use a system based in part on formulas like the ones used by ASCAP and BMI and in part on direct data given to them by webcasters.
However, in my opinion, experience dictates that they will go with the most cost-effective method, which will be a formula rather than licensing an expensive data tracking technology. If they do, this basically means that if you had significant airplay you will get paid, but if you had anything less than significant airplay, you probably get little or nothing. And if you are not an artist on an RIAA affiliated label, which makes up at least 85% of the people reading this, well, you get curtain number three, a lifetime supply of beans.
One key reason for this absurd inequity is that Sound Exchange has virtually NO competition. The bill from the Librarian of Congress recognizes only SoundExchange as a Distributing Agent of this new money, and a proprietorship called Royalty Logic.
Royalty Logic, owned and operated by a veteran copyright lawyer run out of a Burbank office. They will have quite an uphill battle trying to gain the confidence of labels and artists to dissent against the mighty RIAA's SoundExchange, who's agenda favors record labels over artists. Although their legal council, Steven Marks has commented to me that the RIAA plans to separate the two companies "soon" and that the RIAA agreed to "give artists 50%" of SoundExchange, at this point, they are still 100% controlled by the RIAA.
Now, I don't know about you, but if I was an artist or producer on a major label (or one of their affiliates) knowing how equitably record companies like to charge "fees" and distribute money to artists, I do not think that I would want my record company collecting this money for me and then deciding a "reasonable" administrative fee before I get my cut.
Artists and producers out there, wake up and smell the dung. Your government is telling you how your money will be collected and they have chosen WHO will collect it for you. They've given you a choice of a single company, Royalty Logic and the 600 pound gorilla, SoundExchange, which is no choice at all, since the RIAA already has virtually everyone who will eligible to earn money from this new revenue already signed to one of their member's labels.
And what happens if an artist doesn't choose either? Non one knows for sure, as the new ruling didn't address that point. It's my guess that both companies will be paying lawyers a lot of green trying to figure out that one for the next few years. And, with the RIAA legal budget, you can guess who the bookies are giving the spread to.
The new ruling also didn't address the fact that radio stations and webcasters have made it clear that do not wish to deal with multiple companies, like they do with writers and their various PROs (ASCAP/BMI etc.) . So who do you think they are going to do business with, the company that is connected to a huge pipeline of content or anyone else?
So, my point: by not addressing several glitches in the law, and the realities of the music business, the Librarian of Congress as turned the collection of this new money for artists into a legal free-for-all. Whoever has the lawyer that can beat up the other's lawyers will win. And since the RIAA has that area well covered, it's tantamount to Uncle Sam assisting in creating a monopoly. Shame, shame.
The real kick in the pants is that the creation of this .07 cent-per-play-per person license is born out of the concept that an author should NOT have a monopoly on how his work is used and so this compels an author to license it to whomever wants it (radio stations, record companies, etc.). How ironic that that same government is now creating a monopoly to collect the licensing money. Does anyone else out there see the sick humor in this?
Moses Avalon Disclaimer:
This is not news... News is allegedly objective. This is anything but. This is about interpreting
the news into information that you can use. The key to predicting the future
is in interpreting the past. In real terms, this means understanding how the
big players interpret their mistakes and their recent acquisitions.
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