Another Grammy Awards Telecast

...and other coast to coast request made by Neil Portnow, the president of NARAS, for performer royalties. The same announcement was made on last years award show.

The case has been made many times why traditional radio should continue it's long standing performer royalty exemption. If legislation were to be passed now can you imagine the devastating economic impact it would have on radio stations across the country. One can only speculate, but it's safe to assume if would be very ugly.

After hearing Mr. Portnow speak I visited the NARAS web site to see if the was any additional information. Indeed there was:

GRAMMY Town Hall Gets Radioactive
February 7, 2009

Event provides a forum for political leaders and music professionals to discuss Performance Rights Act

GRAMMY.com
Chris Morris

Members of Congress were joined by music industry representatives for a lively GRAMMY Town Hall discussion on the pending Performance Rights Act on Feb. 6 at Petree Hall in the Los Angeles Convention Center.

Re-introduced to both houses of Congress Feb. 4, the Performance Rights Act — H.R. 848 — is the latest iteration of a bipartisan bill that aims to secure a royalty for terrestrial radio airplay for vocalists and instrumentalists. While satellite, cable, and Internet broadcasters pay such a royalty, terrestrial radio stations are currently exempt under federal copyright law. The bill is being supported in the Senate by Sens. Barbara Boxer (D-Calif.), Bob Corker (R-Tenn.), Dianne Feinstein (D-Calif.), Orrin Hatch (R-Utah), and Patrick Leahy (D-Vt.) and in the House by Reps. Howard Berman (D-Calif.), Marsha Blackburn (R-Tenn.), John Conyers Jr. (D-Mich.), Jane Harman (D-Calif.), Paul Hodes (D-N.H.), Darrell Issa (R-Calif.), and John Shadegg (R-Ariz.)

Three of the House bill's cosponsors — Reps. Blackburn, Conyers Jr. and Issa —appeared on the GRAMMY Town Hall panel, moderated by Recording Academy Vice President of Advocacy and Government Relations Daryl P. Friedman. They were joined on stage by vocalist and former Supreme member Mary Wilson and artist manager Simon Renshaw, and in the audience by Motown songwriter Lamont Dozier, 51st GRAMMY nominee Josh Groban and R&B vocalist Sam Moore.

In his opening remarks, Recording Academy President/CEO Neil Portnow boiled down the importance of the legislation: "Great recordings like [Jimi Hendrix's] 'Purple Haze' and [Steve Miller's] 'Living In The U.S.A.,' you all know those songs. They've been staples of radio since they were first released years ago. But the total royalty payments over these decades to these artists, to their band members, and their producers totals less than this — I have a penny here. That's right, it totals zero."

Rep. Conyers, a member of the House of Representatives since 1964 and chairman of the House Judiciary Committee, noted that similar legislation has been introduced in 24 consecutive congressional sessions, and has never been passed.

"This is going to be a serious struggle," he said. "It's going to take not only the artists and the supporters of artists, but it's going to require people in the labor movement to come in with us. It's going to require the civil rights movement to come in with us. It's going to require people who never thought about this as a serious issue — our campuses, our intellectuals — to come in with us."

Rep. Blackburn pointed out that the issues at the heart of the bill cut across a wide spectrum of concerns: "It is an economic issue, it is a jobs issue, it is a trade issue, it is a private property issue, it is an individual issue for millions of entertainers like Sam [Moore] and like Mary [Wilson]."

Rep. Issa added, "Very clearly the [terrestrial] broadcasters…have fought this legislation successfully, but I believe that the business models that are working — in satellite, cable, let's not forget satellite television, and the Internet — these models have proven that the success or failure of the model is not based on whether they pay something to both the songwriter and the singer and the instrumental players and so on."

Wilson pointed out that the Supremes' first No. 1 hit "Where Did Our Love Go" has been in constant radio rotation since 1964. Drawing a laugh from the crowd, she said, "All the times that that record has been played on the AM and FM stations, I [could] probably have retired on some island."

Renshaw pointed out that America is one of the few developed countries that does not pay musicians a radio performance royalty. Consequently, he said, "The money that is paid by international radio stations and monies collected internationally by foreign performing rights societies, those monies don't get repatriated to America. So you have tens of millions of dollars every year that are collected by performing rights societies in Germany and Australia, France, England, everywhere…those monies end up in what they call black boxes. The money just disappears, and nothing ever comes back. Hopefully, when this legislation passes, there's going to be a huge transfer of money that takes place."

With the floor open for questions, Billboard Editorial Director Bill Werde noted that one broadcaster estimated the cost of the Performance Rights Act to the radio industry at $7 billion.

Rep. Conyers replied that the figure couldn't be calculated definitively. However, he added, "What difference does it make? We want some justice here…we're talking about correcting a wrong that has gone unremedied for too damn long."

Maybe We Should Befriend PANDORA?

Yes, our music discovery, internet radio competitor Pandora. As this article on ReadWriteWeb explains Pandora is in a fight to the finish with the RIAA and Sound Exchange just like "regular" radio is. Now some will argue, let 'em go belly-up; one less competitor we have to contend with. The truth is--their problem is our problem and maybe we, Pandora and us (stick and transmitter radio), should work together and figure it out. Put up a united front and take on music industry cartel. In the end, their royalty issues are our royalty issues.

Doesn't Pandora surviving this challenge ultimately help us?

What am I missing here?

Pandora On the Verge of Closing Shop
Written by Corvida / August 16, 2008 5:34 PM

Pandora is an internet radio service that allows you to create your own radio station based on songs and artists that you like. While you can't necessarily pick and choose what you'll hear on the service, you can fine-tune your radio station's tastes by giving the songs that Pandora recommends a thumbs up or a thumbs down. Pandora on the iPhone is one of the best applications for streaming music and finding new tunes. So, what will the service's 1 million plus users do if Pandora pulls its own plug?

The Battle of Music

Founder Tim Westergren has stated that the service is approaching a "pull-the-plug kind of decision" for the service. Why is this happening? Last year, web radio giants were hit with outrageously ridiculous fees by a federal panel for every song that would be played on their stations. This caused a lot of services to either shutdown, or go through what Pandora has been experiencing for the past year. In doing so, it seems the financial problems the music industry has set out to create in order to win the constant battle between rights, piracy, and copyrighted music, are working.

Last Stand, Last Chance

Pandora's founder is waiting for a ray of light in a fight being led by Rep. Howard L. Berman (D-Calif.). Berman is attempting to arrange a few last-minute deals between web radio stations and SoundExchange, the organization that represents artists and record companies that would reduce the the recent fees. However, Westergren isn't going to hold his breath for too long, stating that, "The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we're doing is wasting money." We don't blame you Tim.

What Will You Do?

There are plenty of petitions floating around the web to help the cause, but the law is the law and petitions may not help matters in this situation. We'd be saddened to see Pandora close its doors. While services like Last.FM aren't showing any of the same signs, we wonder if the same fate may be in the not-so-distant future for our other favorite music services. If it is, what will you do?

Politics-A-Plenty

Two items have caught my attention.

First from R&R's website-posted this Monday evening:

musicFirst Fires On NAB For Fees

By Jeffrey Yorke

As some 500 local broadcasters collect in the nation’s capital for the NAB’s annual three-day State Leadership Conference in a swanky hotel adjacent to the FCC’s headquarters, musicFirst has welcomed the visitors with a poke in the eye -- or, as the broadcasters see it, a poke in the pocket -- by launching a three-day advertising campaign in a Capitol Hill newspaper that calls for performance fees to be levied on radio.

The lobby for recording artists, musicians and record labels doesn’t see this as an attack but a method of achieving balance. “It’s a fundamental fairness issue,” musicFirst spokesman Marty Machowsky tells R&R, noting that AM and FM broadcasters earn $16 billion annually in advertising revenue and pay nothing for the music they broadcast. “There is no question in our minds that music promotes radio. What we are seeking, and what is in place in most nations, is fair performance rights. No more, no less.” Machowsky adds that not only are performance rights fees in place throughout the world, but also in the U.S. for Sirius and XM, Internet radio, cable radio “and every other format where music is aired for profit.”

While Rep. Howard Berman (D-Calif.) has introduced a bill calling for the initiation of fees, there’s not been a groundswell of support nor has there been much real talk against it. Washington is focused on a presidential campaign and other pressing matters. While the NAB wants to the performers' and artists' pleas to get lost in the shuffle, musicFirst hopes to draw attention to their campaign and embarrass the out-of-towners. It’s running a full-page advertisement in Capitol Hill’s influential Roll Call newspaper that shows a sidewalk musician with a few bucks tossed into his open guitar case and the bold headline, “He Just Made More Money Than Any Recording Artist On The Radio.”

“Radio’s refusal to pay artists and musicians a fair performance royalty is indefensible; so they have apparently stopped trying to defend it, choosing instead to hide behind other business issues facing the music industry,” Machowsky tells R&R. “It’s time for the NAB and corporate radio to answer the tough questions about their refusal to pay artists and musicians,” said Doyle Bartlett, executive director of the musicFirst Coalition in a statement released by the group on Monday. “AM and FM music radio stations earn $16 billion each year in advertising revenue. But not a single penny goes to the artists and musicians whose creativity, whose heart, whose soul and whose passion bring to life the music that listeners tune in to hear.

“There are many questions that the NAB and corporate radio lobbyists cannot possibly answer with a clear conscience. How can you justify taking someone’s intellectual property and making $16 billion in annual advertising revenue off that property without compensating the creators and owners of the property? This runs against all basic notions of fairness and respect. You might expect this in places like Iran, North Korea and China, where there also is no performance right on radio, but not in the United States. “Why do you deserve a competitive advantage in the music marketplace? Artists and musicians are paid when their music is broadcast on satellite radio, Internet radio and digital music services delivered through satellite and cable television.”

And, in a particularly clear attempt to cause fissure inside the NAB, Bartlett asked, “Which of your leaders is right: David Rehr, president of the NAB, or W. Russell Withers, head of the Withers Broadcasting Group and chairman of the NAB Radio Board? Mr. Rehr calls paying artists for their work product a 'performance tax.' Really, the loophole in copyright law he is trying to salvage is merely an elaborate payment-avoidance scheme. On the other hand, when Mr. Withers was questioned before the Senate Commerce Committee during a hearing last year, he said, 'I disagree with "performance tax." It’s a performance fee.' What is wrong with paying a fee for product that makes you money?”

Mary Wilson, the longest member of Motown wondergroup the Supremes, last week canvassed Capitol Hill, and more artists are expected to meet with representatives this week. MusicFirst declined to unveil its visiting artists list but acknowledged they will be there.

The NAB quickly responded with a volley of its own on Monday (Feb. 25), saying that it understands that the RIAA and musicFirst “will parade a handful of artists through Congress this week in support of legislation that would result in as much as a $7 billion annual tax on local radio stations” and that it would defend itself. "We welcome the debate over which side has been more 'fair' to artists -- radio stations or RIAA-member companies,” NAB executive VP Dennis Wharton said. “America's hometown radio stations expose and promote musicians to 232 million listeners every week. Contrast that with decades-long exploitation of artists by foreign-owned record labels, demonstrated just this month in a $6 million lawsuit against Universal Music Group for 'cheating' artists like Count Basie and Benny Goodman out of royalties."

And then Cramer is back with a biting commentary on the role Congress and the NAB has played in trying to block the XM/Sirius merger--for more than 12 minutes tonight on CNBC's Mad Money.

On the one hand Congress appears to want to "help" terrestrial radio with its opposition to the SatRad merger, but on the other hand Congress seems to be perfectly content, to at least consider, what amounts to levying a music use tax on the radio business.

If both, the merger and the artist royalties, were to go through which would have a more detrimental effect on the radio business?

From my vantage point I believe that a freshly minted music tax could endanger music radio as we know it. Already weakened by a growing pull vs. push consumer mindset, one can only believe that radio (terrestrial and satellite) will have an even more difficult time competing in the future. Now, maybe that is the natural order of things. I would like to think that if we, the experts in audio entertainment for more than 80 years, can figure out new and creative ways to entertain listeners, including music programming, it might not be as severe. It seems to me that XM and Sirius are in the same boat as their terrestrial cousins.

I might be in the minority when I say let XM and Sirius merge. Right now, FM and AM radio is competing against two aggressive satellite radio companies. With the merger approved it will be just one and in theoretical terms that should be good for terrestrial radio-only one competitor vs. two.

All this competition is only the beginning. We have only begun to see the roll-out of personal audio devices, mobile and auto streaming, and technologies yet to be invented. I am not alone when I say content, content, content across multiple platforms--available anytime and anywhere.

At the end of the day these two pending issues will come down to politics. Who in Washington has the loudest voice AND the most money dedicated to the "education" of our lawmakers.