Australian Clubs Looking To Play Independent Music To Avoid Insane New Royalties

from the send-them-some-indie-music dept

We've been discussing how collections societies around the globe have been making a mad dash to get governments to tax more things or to simply massively expand existing collection taxes on music. One stunning example we gave was how the Phonographic Performance Company of Australia (PPCA) was pushing to increase fees by ridiculous amounts (in one example from $125/year to $19,344). Apparently, part of the setup is that clubs and restaurants have to pay a much higher per patron fee, and the number of patrons is based not on the actual number of patrons -- but on capacity. PPCA and others like them continue to insist that all of the value in a restaurant or club comes from the music, and thus those places should pay these extortionate rates, even if actual human beings don't come to fill up the place (so much for the music actually bringing in the crowds). But it looks like at least some clubs in Australia are pushing back. Sambo points us to the news that many are trying to build support for a protest effort where these clubs will only play independent music and avoid all music licensed to the PPCA. Of course, in the US, we've seen ASCAP and BMI tell clubs that do similar things that it doesn't matter -- since they might accidentally play their music. Still, it looks like these kinds of moves, that often would bankrupt these clubs and restaurants, are having an unintended consequence of helping to promote non-PPCA music. So, if you're a musician and you want to get heard in Australia, try licensing your songs under a Creative Commons license or something and highlight that anyone can play the music without having to pay a ridiculous PPCA tax.

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How Performing Rights Groups Funnel Money To Top Acts And Ignore Smaller Acts

from the nice-trick dept

It's no secret that most of the traditional "recording industry" really is structured almost entirely to help the big name acts, but whenever we write about the collections organizations like ASCAP and BMI we get angry people sending in emails and comments insisting that it's unfair to lump those two in with the RIAA, since they're really out to help the actual musicians, even the small guys. Uh huh. Of course, we've already shown how ASCAP and BMI and their overly aggressive attempts to collect royalties from just about everywhere actually have been known to harm up-and-coming singers, such as by destroying the ability for many venues to host open mic nights. ASCAP has been particularly aggressive lately in making bizarre claims about how embedding YouTube videos requires a license (despite the fact YouTube already pays ASCAP -- so it wants to double count) and how ringtones represent a public performance. These are pure money grabs that make it that much more difficult for anyone to help promote up-and-coming musicians and songwriters. Is it any wonder, in the meantime, that the organization is spending time setting up efforts to try to push back against people who support open culture and content sharing? It apparently would prefer that the songwriters they "represent" not know about these efforts that actually do quite a bit to harm the vast majority of songwriters out there.

But, back to the original point. ASCAP, BMI and their supporters insist that they're not as bad as the big, mean RIAA, and that they're especially focused on providing important royalties to less well known artists. Except... even that may be questionable, at least when it comes to live performance royalties (admittedly, a smaller segment of overall royalties). Reader btr1701 sent in some email exchanges from a mailing list, which I won't share directly since I don't have approval, concerning a jazz musician trying to find out why she doesn't receive any live performance royalties, despite knowing that these organizations collect them, supposedly on her behalf. In response, she's told that ASCAP and BMI only distribute that royalty money to "the top 200 grossing US tours of the year." If you're smaller than that? Too bad. Except... they do have one minor exception. If you play "serious music" (no joke), then they'll pay you your royalties. So, the musician asks what is "serious music" and is told it's "generally considered to be classical music."

The musician tried re-registering her own (jazz) compositions as "serious music" but it "does not appear to have made any difference whatsoever" and she notes that she is "yet to receive a single penny... for any US performance or radio broadcast of any kind" despite the fact that her music has been performed in the US for almost ten years, and "the vast majority of performances of my music take place in the US."

I went looking for some more details, and it appears that, indeed, ASCAP and BMI have a policy in place to only provide performance royalties to the top 200 grossing tours in the US. If you're a "smaller" act, the only way to get paid is to be an opening act on such a tour. Otherwise? Too bad, you're on your own. Aren't you glad you signed with ASCAP or BMI? Update Good clarifications in the comments on this. Despite what the musician was told originally, it appears that it's not that ASCAP and BMI only pay the top 200 tours, but that they only monitor them (it's not explained how they know ahead of time which are the top 200) in order to figure out who to pay. The end result, of course, is functionally quite similar. If they're only monitoring the top 200 grossing tours, then the likelihood of them finding out about songs from less well known composers is close to nil. But those big names? They get more than their fair share.

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Tales Of Collection Societies Gone Wrong: GEMA

from the it-ain't-about-helping-the-artists... dept

We've noted in the past some of the massive problems with various collections societies around the world. These groups are often given something of a monopoly over collecting music royalties, and even though they present themselves as being non-profits designed to help artists, the truth is usually something far different. Beyond abusing their position, their real goal is often not to help all artists, but a small subset at the top. This is what copyright law has pretty much always done. By setting up artificial barriers and monopoly rents, it allows a very few at the top to benefit at a grossly disproportionate level, and it's the rest of the creators who are harmed by this (i.e., if those monopoly rents mean that I need to pay much more than the true market rate to support some top pop star, I'm much less likely to spend money on an up and coming indie musician). The whole recording industry has been built around a few megastars, and it should be no surprise that the industry has used copyright law and collections societies in support of that.

Wolfgang Senges is digging into how this works in Germany, where some are finally questioning GEMA's actions. In delving into how GEMA works, Senges notes that its entire structure is specifically designed to really only give a small percentage of top artists a say in how GEMA operates. Everyone else just gets dragged along for the ride. Is it any wonder, then, that its policies are mostly designed to help those big artists, rather than others?

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The Real Problem For The Music Industry Is... Interest Rates?

from the say-what? dept

Cybeardjm points us to a story from Billboard about a claim from the head of PRS in the UK, noting that the real problem with the music industry today is low interest rates. You see, the way collections societies work is they collect money and hang onto it for a while before actually giving it out (if they give it out at all). During that time that they hold it, they hope to earn money on the interest, but with interest rates so low, apparently revenue is expected to be way down. The article points out:

But while overall revenues are being hit by falling CD sales and lower income from music in advertising, Porter said 80% of the decline can be blamed on interest rate cuts.

I'm assuming they just mean on the publishing side of the business, but it's worth noting this stat the next time you hear people complaining about how much songwriters are "hurt" by file sharing. If the impact of fluctuations in interest rates are a much bigger revenue concern, than the impact of file sharing really isn't that big. On top of that, any organization that bases expected revenue on something as variable and out of their direct control as interest rates is going to run into serious trouble pretty quickly.

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Connecticut Town Tells ASCAP, BMI, SESAC To Get Lost Over Royalty Bills

from the get-lost! dept

Three years ago, the town of New Milford, Connecticut got a bill from ASCAP demanding $280 in licensing fees, because the local town center sometimes will have music playing. Even at that amount, the mayor felt it was ridiculous, since it was a municipality playing music for non-profit community purposes. So the town council voted to ignore the bill, tabling it "indefinitely." As far as I know nothing else has happened between ASCAP and New Milford, but reader Bill Waggoner recently alerted us to the news that BMI and SESAC -- the other two collection societies in the US -- sent bills to New Milford as well. BMI's was a whopping $3,000. SESAC's was $1,500.

After being asked about it, BMI realized that it had made a "mistake" in calculating the bill, and lowered it to $305 (funny that they don't make mistakes in the other direction, do they?). However, the town council has told them to go take a hike. "They're not going to get that either" was the quote from council member Roger Szendy. The town's mayor, Patricia Murphy, says she's standing up for the principle of the whole thing, claiming that it's silly that a municipality should have to pay. BMI apparently says it's not going to sue, but it hopes that the city will "do the right thing."

I'm guessing that BMI (and ASCAP) realize it would be a public relations nightmare to sue a municipality, but if other cities start taking similar principled stands, you have to wonder if they'd reconsider.

Side Note: As regular readers know, it's our common practice to link to our source for information on stories. In this case, however, our main source is The News Times. I had the story about this open in my browser for a few days before getting around to writing it up. Then I discovered that The News Times locks up its content after a few days. So... I can no longer actually get to the article or send any traffic to the newspaper site. Perhaps I don't quite get the economics of news publishing, but I would imagine ad traffic from a bunch of our readers visiting their site would greatly outweigh the expected value of people actually paying $3 to read the article (yes, that's what they want). Oh well. I guess it's just their loss.

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Dutch Music Collection Society Loses Artist Royalties In The Stock Market

from the good-job,-guys dept

The various music collection societies keep insisting that they're just the important middlemen helping make sure artists get the royalties they're due. Except, for some reason, they keep getting caught not actually giving that money to artists, but hanging on to it themselves. Billboard reports that the Dutch collection society, Buma/Stemra, is happily telling people that revenue rose by 2% last year -- though, oddly, the Billboard report leaves out one rather interesting detail. Reader Marcel de Jong notes that Buma/Stemra invested a bunch of the money it collected for artists into the stock market and then lost a chunk of it, so it's paying artists less money than it collected for them. What's unclear is if Buma/Stemra would have paid out more if it had made money... and also why it's gambling on the stock market with money it supposedly collected for artists.

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Why Is It So Hard To Set Up A Pan-European Music License?

from the head-scratching dept

We'd been looking at reports about the ongoing discussions about pan-European music licenses without too much interest, given that licensing bodies only ever seem to do things in their own interests. But one aspect of the talks is a little bit interesting. It's often claimed by these bodies and their supporters that they're these little non-profits working tirelessly on the behalf of musicians and songwriters, ensuring they get paid for their work. It's a convenient appearance behind which these groups hide, using it as an excuse to justify plenty of ridiculous behavior. After all, if you object to anything these groups do (supposedly) on behalf of musicians, you're trying to take away the musicians' "right to get paid", so your opinion can be marginalized and ignored.

But the reality is that many of these licensing groups are nowhere near as innocent as they'd have you believe. Their licensing schemes often do little to actually help musicians make money, and in fact, they can even make it harder for musicians to succeed. Then there are examples like that of SoundExchange, which is sitting on more than $100 million in royalties it's collected, but claims it can't pay out because it can't find the musicians to which it's owed. In addition, where do unclaimed funds end up? The RIAA.

Just for a second, let's ignore the above paragraph and assume the licensing bodies really are working in the artists' best interests. If that's the case, and the artists' best interest constitutes them getting paid, why is it so difficult to set up a pan-European license? Why does it matter who collects the money, as long as it ends up in the artists' pockets? Apple has talked before about how having to set up licensing deals in each EU country before allowing iTunes Music Store sales there means that it's simply not worth the effort in some places, and that having a pan-European license would let it open up iTMS in new places. That would be good for artists, right? More outlets for online sales means more money for them. So why hasn't the pan-European license been done? Infighting over which licensing body gets to collect the fee -- and take a cut? If these licensing bodies are all about the musicians, surely that can't be the reason, since they just want to funnel as much money as possible to the artists.

So maybe, just maybe, the licensing bodies aren't solely interested in artists' welfare and have other motives?

Carlo Longino is an expert at the Insight Community. To get insight and analysis from Carlo Longino and other experts on challenges your company faces, click here.

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PRS Copyright 'Investigators' Actually Sales People

from the no-wonder-they-go-after-horses dept

PRS, the UK's music licensing agency, recently reached out to us after a series of posts we wrote which (to say the least) portrayed their organization negatively. We had a cheerful email exchange that basically left off with us disagreeing on just about everything -- but especially over PRS's tactics, such as demanding a woman running a stable pay for a license because she played music to her horses, just because a few other employees (who didn't listen to the music) occasionally stopped in. Then there's the demands against auto mechanics and police stations because employees were listening to music (in private areas) loud enough that it could be heard in other rooms where the public might visit. Oh, and then there was the demand that a children's charity pay up for singing Christmas carols. And, then there's my personal favorite: calling up small businesses, and if music is heard in the background, demanding the purchase of a license.

If you want to understand the sort of incentives that create such ridiculous and self-defeating PR nightmares, take a look at a recent job posted by PRS (thanks to Kaden for alerting us to this). Officially, the organization is looking for a "copyright investigator," but the actual job is in "sales." These "investigators" have "revenue targets" and can earn a bonus for bringing in excess revenue beyond their targets. That's not creating a situation where these investigators are told to go find violators. It creates a scenario where they're encouraged to find anyway humanly possible to squeeze pretty much anyone for cash.

The PR guy from PRS who contacted us tried to make the case that PRS is just a little non-profit looking out for the best interests of musicians, but when it's setting up its sales people with incentives to come up with any bogus reason to pressure everyone into purchasing a license to listen to music they already legally purchased, something is clearly wrong. This is a group that's effectively been handed a monopoly in the UK and appears to be abusing its power, not as a little harmless non-profit, but as an organization that handles an awful lot of money and has empowered its sales people to threaten small businesses if they don't pay up.

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EU Plans To Extend Copyright; Turns Copyright System Into Welfare For Musicians

from the what-a-shame dept

Just as we feared, the EU has now approved copyright extension of performance royalties from 50 years to 95 years. This is basically an approval to steal from the public. The public made a deal with musicians 50 years ago: give us music, and we'll give you performance royalties for 50 years. The musicians accepted that, and it was a worthwhile deal for them. Yet, now, the government has decided to change the deal, remove that content from the public domain and give it to the musicians for another 45 years. This is, simply, bad policy. It encourages the exact wrong behavior: telling people that the public will pay them for work they did many many years ago over and over again. This doesn't encourage musicians to continue working and it doesn't encourage them to be fiscally responsible and save for retirement or anything.

At the same time, (again as expected), the EU has said that royalties collecting agencies need to compete, like they do in the US. As we noted a few weeks ago, this is better than forcing all artists to be represented by a single agency, but these agencies tend to do things in the name of artists that can be a lot more damaging than helpful in the long run.

These changes still require approval from the individual EU countries and the EU Parliament, so there's still some chance that folks in Europe will realize that extending copyright on already created works is a bad idea, but that seems unlikely at this point.

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