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RIAA to ASCAP: Happy 100th Birthday. Now Get Out

Organization celebrates milestone amid proposal to shift royalty authority

On February 13, 2014 the American Society of Composers, Authors and Publishers (ASCAP) turns 100 years old. ASCAP is one of the organizations through which licensing deals are cut,royalties are collected and money is distributed back to creators and publishers. It bills itself as “The only performing rights organization in the US owned and run by songwriters, composers and music publishers.” But there is another organization dedicated to collecting royalties for artists and labels that is also owned and run by the various entities within the music industry — SoundExchange.

As it stands right now, ASCAP is responsible for collecting royalties for public performances of an artist’s work such as fees paid by radio stations, businesses and bars who play music publicly. SoundExchange on the other hand is responsible for collecting royalties for digital performance such as fees paid by satellite radio and Internet radio.

If Rep. Mel Watt (D-NC) and Recording Industry Artists of America (RIAA) lobbyists have their way, SoundExchange could get vastly more powerful. Very powerful. Monopoly powerful.

Generations of artists have benefitted from radio airplay to sell records and fill concert halls — free of charge.  Every single major artist became major by gaining radio airplay. Legislation recently introduced by Rep. Mel Watt (D-NC) would upend this system by requiring radio stations to pay a performance royalty to artists whose music they play. In essence, the RIAA now wants to be paid for the benefit of having their songs played on the air.

That is where SoundExchange comes in. Under the Watt bill, SoundExchange would become the sole entity authorized by the state to collect royalties for artists from all mediums. Not only would they be the only organization collecting royalties, they would be the only organization deciding what the price of those royalties would be.

Proponents of the Watt bill argue that it would create a “free market” instead of the government rate setting now in place for digital music. They argue that some representative of radio stations like the National Association of Broadcasters would negotiate with SoundExchange on behalf of radio stations and a price would be set.

Among the many flaws in this notion the most glaring is that payola laws from the 1930’s prohibit radio stations from charging artists for airplay. So how can it be an actual negotiation if only one side’s value is recognized?

An analogous “negotiation” to the type established in the Watt bill would be one between two parties, one having water and the other food. The party that has food is prohibited from charging the other party to obtain it but the party possessing water is free to charge what it wishes. Since both parties need both food and water to survive, this arrangement isn’t really a negotiation as much as it is an extortion session.

Interestingly, in the conversation surrounding the Watt bill and radio royalties little is often mentioned about the fate of ASCAP, the organization currently responsible for collecting the limited public performance royalty fees that radio stations are already required to pay to songwriters. It seems odd that the the responsibility would be shifted to the organization responsible for collecting digital royalties. But then again, the fact that ASCAP so openly promotes the ownership and involvement of artists and publishers would likely complicate efforts to make the Watt bill seem impartial and “free market.” Had they chosen something more innocuous sounding like “SoundExchange” perhaps they would have been chosen by Watt et al to receive vast monopoly powers.

The recording industry is rapidly changing even without proposals like the Watt bill. But with proposals like this bill being pushed by major forces within the recording industry, one has to wonder if ASCAP’s 100 year celebration isn’t akin the human interest segments covering centenarian birthday parties that are a staple on local news programs — a joyous celebration but everyone knows there won’t be many more of them coming.

 

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