Digital Radio Dealt Blow as Judge Sides with the Turtles

Marc Hogan

By Marc Hogan

Lead News Writer
on 09.23.14 in News

When digital radio services such as Pandora or SiriusXM play a song recorded after February 15, 1972, U.S. copyright law requires them to pay royalties for both the performance and the songwriting. When they play a song from before that cutoff date, digital radio companies need only pay royalties to the songwriters. It’s a distinction that could be worth hundreds of millions of dollars in the years ahead, and a California federal judge has just issued a major ruling that sides with musicians against the satellite and streaming radio providers.

Flo & Eddie of the Turtles have won a potentially massive victory in their 2013 lawsuit against SiriusXM without even having to go through a full trial. According to court documents first cited by The Hollywood Reporter, U.S. District Court Judge Philip Gutierrez has granted the “Happy Together” singers summary judgment, ruling in favor of the duo’s claim that the satellite radio providers violated California state law by playing their songs without permission. Next on the docket for the case is a scheduling conference on October 20; Flo & Eddie are asking for $100 million. Enough to be happy together, indeed.

Gutierrez was looking at California copyright law because federal copyright law doesn’t apply to these pre-1972 recordings. States have passed laws in the meantime to fill the gaps, and 1982 California legislation gives recording artists in these cases “exclusive ownership.” It was left to the judge to decide whether that means the artists also have exclusive control over public airings of their recording; he ruled that they did. Gutierrez writes he “infers that the legislature did not intend to further limit ownership rights, otherwise it would have indicated that intent explicitly.”

It’s not just about “Happy Together.” The judge has previously written that the case “could have far-reaching effects.” SiriusXM has warned that a victory for the Turtles members “would radically overturn decades of settled practice.” Others suing SiriusXM over pre-1972 recordings include the three remaining major labels.

The implications of the ruling go beyond SiriusXM, too. A bill introduced in Congress last year would make it mandatory for digital radio providers, including Pandora, to pay performance royalties on pre-1972 music. SoundExchange, a royalty-distributing nonprofit, got signatures supporting the legislation from a who’s who of classic artists including Al Green, the Beatles, Yoko Ono and the estates of Jimi Hendrix and Otis Redding, plus members of the Beach Boys, the Supremes and the Temptations; Cyndi Lauper, Talib Kweli, Ted Leo and Aimee Mann were among younger artists backing the campaign.

The amounts of money at issue could be immense. According to SoundExchange, as many as 15 percent of recordings aired on digital radio are pre-1972. The group has estimated that would be worth $60 million in performance royalties for just 2013.

Pandora, for its part, has argued that it does more good than harm for pre-1972 artists. It has pointed out that it does pay songwriting royalties and that major labels are effectively flip-flopping, considering they previously opposed performance royalties on pre-1972 recordings.

(Traditional radio broadcasters, in case you’re wondering, generally pay only songwriting royalties. They don’t pay performance royalties. That’s a whole other issue, and it’s why David Byrne recently covered Biz Markie‘s “Just a Friend.”)

The debate over pre-1972 royalties will only become more relevant as digital radio continues to expand. On-demand streaming companies such as Spotify and Rdio have been boosting their streaming radio offerings in recent years. While it remains to be seen what Apple does with its Beats Music acquisition — as The New York Times reports, the iPhone maker has denied comments that it is shutting down the on-demand streaming service — the company also owns iTunes Radio. Digital radio is here to stay; what’s up for debate is how much of a cut should go to performers.

With apologies to the Turtles: It’s only right to think about how you’ll listen to the music you love, but the musicians and big companies involved here probably can’t see any way out of the courts — or politicians’ offices in Washington, D.C. — for a while yet.