Music Copyright Extreme-Makeover Plan Still Just a Plan

Marc Hogan

By Marc Hogan

Lead News Writer
on 02.06.15 in News

Listeners could eventually be able to rest a little bit more assured that the performers they love are actually getting paid for our plays. The key words in that sentence, though, might turn out to be “eventually” and “a little bit.”

The U.S. Copyright Office released a 245-page report on February 5 recommending a sweeping overhaul of the music copyright system. The proposals would settle some existing disputes, such as whether streaming services ought to pay the owners of pre-1972 recordings, or whether radio broadcasters should have to pay the owners of recordings at all. But for any changes to take effect, they would still have to be introduced — and then passed — in Congress. Then signed by the president. Then upheld by judges in the inevitable litigation. Unlike most pop singles, this song won’t be over in three minutes.

So the Copyright Office’s recommendations are just that: recommendations. Still, they’d perform radical surgery on the way money from records flows currently. The division of the U.S. Library of Congress says the report provides “balanced tradeoffs” to update an “aging system.”  Here are a few of the bigger proposed changes.

For one, the report calls for applying federal copyright rules to music recorded prior to 1972. What this means for listeners is that when you hear older music on digital services such as satellite radio or Pandora, you’d be able to take comfort that whoever owns the copyright to that recording has a legal right to royalties. Previously, due to a quirk of the law, digital services have had to pay pre-1972 royalties to the owner of the songwriting copyright, not the sound recording. That system came into doubt when a federal court ruled for members of “So Happy Together” band the Turtles against SiriusXM. (See For Pre-1972 Music, It’s the Turtles All the Way Down or this interview on Sound Opinions.)

What’s more, the report would allow the owners of sound-recording copyrights to receive royalties for old-fashioned AM/FM radio play. Currently, through another idiosyncrasy of the law, radio broadcaster must pay so-called “mechanical” royalties to the owners of the songwriting rights. But the likes of iHeartRadio (fka Clear Channel) aren’t required to pay royalties to the sound-recording rights owners for so-called “public performance.” What this means is that when you hear Aretha Franklin’s Otis Redding-remaking “Respect” on oldies radio, you could rest reasonably assured that the Queen of Soul might be drawing a paycheck. That might be especially helpful for artists without Franklin’s massive commercial suggest: David Byrne tried to draw awareness to the cause of radio performance royalties in February 2014 by covering Biz Markie’s “Just a Friend,” which the rapper technically didn’t write.

Some of the other proposed changes relate to The American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI), the two “performance rights organizations” that control the composition rights to about 90% of U.S. music. The implications here for average music listeners are less clear, but basically, the Copyright Office wants the publishers these organization represent to be able to negotiate their own separate deals with on-demand streaming companies such as Spotify (though not passive streaming companies such as Pandora). And disputes about royalty rates would be settled not through the federal courts, as they previously have been, but through the Copyright Royalty Board, which sets Pandora’s rates and tends to approve more generous digital payouts for publishers.

Tucked away in the report, the Copyright Office also calls for allowing artists to block cover versions of their songs from streaming services. As The Hollywood Reporter notes, that would mean Taylor Swift — who already pulled her own music from Spotify — could potentially force the streaming provider to take down others’ versions of her songs, too. This would apply only to on-demand streaming services, not non-interactive ones like Pandora.

The report is already getting a thumbs-up from the business group that represents many prominent independent labels.

The American Association of Independent Music (A2IM) released a statement yesterday applauding the report. “We agree and support the Copyright Office’s copyright revision recommendations in almost all areas,” says A2IM president Rich Bengloff in a statement, including federalization of pre-1972 copyright law and requiring performance royalties for AM/FM radio broadcasts. A2IM’s members range from giant indies Big Machine (Swift), Beggars Group (Adele) and Third Man (Jack White) to Burger and Kill Rock Stars, Touch and Go and Temporary Residence, Secretly Canadian and Stones Throw.

The Recording Industry Association of America (RIAA) was a bit more muted in its response. “The Copyright Office has made an important contribution to the ongoing conversation about modernizing the copyright laws,” the big record industry group said. “They have given all of us in the music community a lot to digest and reflect upon.”

The National Association of Broadcasters (NAB) was unenthused about the potential requirement to pay additional royalties for AM/FM broadcasts. “As it has for decades, the Copyright Office proposes music licensing recommendations looking only through the lens of copyright owners,” the broadcaster group said. “What cannot be denied is that the U.S. music industry is the envy of the world, aided by a legal framework that enables 244 million listeners to enjoy free and local radio every week.”

ASCAP, through a statement by president, “Rainbow Connection” composer and 2013 Daft Punk collaborator Paul Williams, said many of the report’s ideas “underscore yet again the inefficiency of the current system for music fans and creators alike.”

The Future of Music Coalition (FMC), a musicians’ advocacy group, cheered many of the recommendations but emphasized that the report is by no means the last word. “Although we welcome this report, we don’t consider its recommendations as the absolute path to legislative change,” FMC said in a blog post. “It is helpful in focusing the conversation, however—particularly for policymakers. But we feel strongly that artists must be vigilant to make sure that any future laws aren’t constructed for the sole benefit of big media companies that control the most copyrights, or just one or two kinds of technology companies.”

It’s certainly true that the debate is far from over. Legislation proposing some of these changes has been introduced before. Last year, Congress debated the RESPECT Act, which would have required royalties for pre-1972 recordings. The House also heard the Songwriter Equity Act, which would have strengthened songwriters’ hand in pushing for higher royalties from digital streaming services, as Reuters reported at the time. Both stalled. While a House Judiciary Committee aide told Re/Code the panel is considering the Copyright Office report “and reactions to it,” the chances of actual lawmaking are as cloudy as with any idea on Capitol Hill in recent years.

The balance of commercial power could shift among tech companies, record companies and publishing companies, but at this point, it’s still hard for an average music fan to know how much this will help your favorite act. For instance, just last week Sly Stone won millions in court after his manager allegedly bilked the psych-funk pioneer out of royalties, and Stone had previously sold the bulk of his songwriting copyrights — the debate is moot for artists who are cheated or forced to sell off their ownership interests. And the Obama administration has previously used the music industry as an example of an economy dominated by the 1 percent, so smaller-scale labels and artists will need to guard against being shortchanged once again.

That recommendations to iron out some wrinkles in the American copyright system are under discussion in Washington right now is no small miracle in itself. For those changes to become laws that satisfy the music community and listeners could be an even more Herculean task.