Monday, September 21, 2009

Thirty Seconds Over Hollywood - ASCAP/BMI "gouging" vs. "adequate compensation"

One of the nice advances of the Internet age has been the thirty-second song sample. These samples, which can also be found in selected music stores, give you the opportunity to preview a song before you buy it, and while they have probably resulted in people NOT buying particular music, they have also definitely resulted in people buying music that would be too risky to obtain otherwise. I've written extensively about thirty-second song samples in the past, and even in the age, thirty-second samples clearly play their part.

But this appeared in my Google Reader shares, courtesy Rob Diana. First, let me share Rob's comment:

just when you thought the music industry could not do anything stupider, they come up with another fantastic idea.

The idea is documented in this Techdirt post:

It's been really stunning to see just how little dignity groups like ASCAP and BMI have in trying to suck every last penny out of any kind of musical usage, without ever once considering the damage they're actually doing to songwriters. It's as if the folks who run these groups have no concept of the actual impact of their crazy demands....

I guess it should come as no surprise at all to find out that their latest target is the 30 second previews that you hear on iTunes or Yes, they're claiming that those 30 second previews should count as a public performance, and they want to get paid. Now. And they're asking Congress to make it happen -- because, as we've been learning recently, if you're inept at running an actual business, just go to the federal gov't and ask them to bail you out.

Techdirt links to a somewhat more balanced CNET article:

At a time when many iTunes shoppers are still fuming over Apple's first-ever increase in song prices, the demands by the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc. (BMI), and other performing-rights groups, would likely lead to more price hikes at iTunes. For many, this would also undoubtedly confirm their perception that those overseeing the music industry are greedy.

For those reasons, composers and songwriters will struggle to sell their case to the public. But these royalty-collection groups say they're at the bottom of the music-sector food chain and aren't trying to gouge anyone. They say their livelihoods are threatened and wonder why movie studios, big recording companies, TV networks, and online retailers are allowed to profit from their work but they aren't.

Many are trying to cast this as a "poor iTunes vs. the big bad record companies" battle, in which iTunes is sticking up for the little guy - in this case the customer. But look at it from the songwriter's point of view - when the songwriter is Rick Carnes of the Songwriters Guild of America.

Until last October, music publishers were able to pocket 10 percent of the retail price for a song, according to Steve Gordon, a copyright attorney. This meant that for a $2.99 ringtone, the publisher could make 30 cents and typically split half with the songwriter.

But the labels are now threatening to choke off that extra income. Record companies claim songwriters and music publishers charge too much and want prices restricted to a rate of 9.1 cents per song.

But before that change was discussed, you could make a ton off of ringtones. Just ask Merv Griffin - whoops, you can't ask him, but you can read this story:

[Griffin] once found a check for a large sum on his desk and couldn't figure out how he had earned it. According to a story in Rolling Stone magazine, Merv couldn't figure out why someone was paying him huge royalties for the song he penned for his show "Jeopardy."

The ditty had become a top-selling ringtone.

Of course, a ringtone is not a song sample. (Or is it?) Unfortunately, I have not been able to locate authoritative sourcing for the original statement from ASCAP or BMI regarding compensation for thirty-second song samples; all of the articles that discuss the matter solely seem to link to the opposition. Here's an opposing view, for example:

The Digital Media Association (DiMA) filed an amicus brief today in the case of ASCAP vs. AT&T Mobile asking the federal district court to rule that 30-second music preview clips are “fair use” and do not justify public performance royalties as demanded by songwriter and music publisher representatives.

“DiMA supports fair compensation for copyright owners,” stated Jonathan Potter, Executive Director of DiMA. “DiMA members pay tens of millions of dollars in royalties to songwriters and publishers for online music sales. But the performing rights organizations (ASCAP, BMI and SESAC) who represent songwriters and publishers demand additional payment for the preview clips that facilitate these online sales.”...

“Internet retailers sell an extraordinary percentage of all recorded music,” continued Potter. "The iTunes Store is America’s largest music retailer, and, Best Buy and other DiMA members use 30-second clips to sell both CDs and digital downloads. If ASCAP succeeds in pressing its demand for a new payment for these previews, Internet music retailers would be disadvantaged simply because they are selling online, and songwriters and music publishers would be getting a royalty for the preview on top of the appropriate and well-deserved royalty that is paid when the music itself is sold.”

I did find an ASCAP statement from Paul Williams, but it only dealt in generalities:

I am concerned that if music is not fairly valued or compensated, then a successful career in music will be increasingly out of reach. The viability of our industry, and in turn our greater economy, depends upon making sure that young creators have the opportunity to pursue music as a profession, not just a hobby or a vocation.

Now bearing in mind that I have been unable to locate ASCAP's specific argument, I do have to wonder - if the concern is whether or not artists are being adequately compensated, why fight the battleground over A SMALL PART of a song?

On the other hand, if you strip away all of the big companies, such as the Sonys and the Apples from the equation, this boils down to a battle between the individual songwriter who makes the music and the individual consumer who wants to buy it. If you put the question to a majority vote, naturally the consumers are going to win the vote, and the songwriters are going to lose. But if ASCAP and the Songwriters Guild are right, then all of us are going to lose if people choose to stay away from the songwriting profession.
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