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Between the Lines

Larry Dignan, Andrew Nusca and Rachel King

Music execs crying about royalties again; Time for a start-over

By | September 17, 2009, 12:47pm PDT

Summary: There’s an interesting piece by CNET’s Greg Sandoval today about royalty fees in the music industry and how the songwriters, composers and music publishers aren’t getting their fair share from iTunes, based on today’s royalty rules. It’s gotten so extreme that those folks even want a cut of the free 30-second samples of songs that [...]

There’s an interesting piece by CNET’s Greg Sandoval today about royalty fees in the music industry and how the songwriters, composers and music publishers aren’t getting their fair share from iTunes, based on today’s royalty rules. It’s gotten so extreme that those folks even want a cut of the free 30-second samples of songs that are played on iTunes. Here’s one of the best lines in Sandoval’s article:

This would also undoubtedly confirm the perception held by many that those overseeing the music industry are greedy.

Ya think?

I’ll spare you all of the technical details about how royalties are paid in the music industry. Sandoval offers a very thorough explanation about the difference between music sales and music performances - such as songs played at sporting events, in movies and TV shows and so on. And I would encourage interested readers to click the link and read his post. (Techmeme)

I understand that there are some important players in the music industry who may be getting shafted. But how is that the fault of Apple or consumers. We didn’t make the rules. Apparently, changing the rules about the fees takes an act of Congress - literally. And the groups representing the publishers, songwriters and composers have already started to lobby Congress for changes that would include fees for music downloads.

Allow me to say it again, if you will. (I know I’m starting to sound like a broken record - no pun intended.) The music industry cannot turn back the clock on technology. You’d think they would have figured that out already. But here comes another group of music executives who want to somehow morph old rules into new ways. Why on Earth would anyone lobby Congress to modify rules that were established under different market conditions and ask that they be applied to the new way?

Start all over. Take the old rules. Figure out what works and what doesn’t and then come up with suggestions for a new set of rules and guidelines. Come to the table with a solution on how to address the problem.

Hey music executives: We’ve heard your it’s-not-fair cries from the halls of Capitol Hill before. This time, why not be useful and instead come to the table with some new ideas for legislators to ponder.

And be sure to leave the lawyers at home.

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Sam Diaz

Sam has been a technology and business blogger, reporter and editor at ZDNet, the Washington Post, San Jose Mercury News and Fresno Bee for more than 18 years. He's a member of the National Association of Hispanic Journalists and a graduate of California State University, Fresno.

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RE: Music execs crying about royalties again; Time for a start-over
rwaters@... 3rd Apr 2011
There is no incentive for musicians to record songs any more. They just pay at clubs and concerts, and hope they can make enough money to live. That certainly makes it even tougher to survive in the music business, and discourages new talent.
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Once Upon a Time
DannyO_0x98 17th Sep 2009
When we had music stores and vinyl discs and LPs were premium items,
stores had listening booths for people to check the recording out.

Since that was a performance in commercial context, publishers and
songwriters could have asked for performance rights back then. They
didn't because it would have been nuts: the record stores would have
stopped allowing previews and sales would have declined.

What do they think will happen this time around? Apple, Amazon, etc.,
pony up or discontinue previews?
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It's actually amusing
SystemVoid 18th Sep 2009
...watching the music industry devour themselves.
they'll never learn.
when Princess Leia says: "The more you tighten your grip, Tarkin, the more star systems will slip through your fingers."
Will these greedy, talentless losers ever shut up? No-one
likes you RIAA - go away!
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Just negotiate for higher sync fees
P. Douglas Updated - 17th Sep 2009
If performance fees are drying up on account of increased private consumption of media, why don't these guys simply negotiate for higher sync fees? It makes as much sense to charge performance fees for media downloads, as it does for media (e.g DVDs and CDs) distributed through stores. These media types are such cry babies. Every time there are unfavorable changes in the market place, they run to Congress to have the rules changed.
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Congress sets the rates and where
Patanjali 17th Sep 2009
Where else are they going to go to get statutory conditions changed?

Like so much of the hype about this, it is based upon ignorance of the realities involved.
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It would be much better if these guys formed unions ...
P. Douglas Updated - 18th Sep 2009
... and negotiated rates with record labels, movie companies, etc., rather than have the government set rates through acts of Congress. After all, the rest of the economy (e.g. software developers) does not rely on the government to negotiate and set licensing rates for them.
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Lot of history of past standover tactics
Patanjali Updated - 20th Sep 2009
The government stepped in to stop a lot of disenfranchisement that occurred.

Plus the essentially fractured nature of the business. Songwriters and artists are often not employees, but contracted and so subject to very varying conditions, often at the mercy of unscrupulous agents, managers and promoters being the gateway to their livelihood.

One just has to think of them being a few rungs lower in organisation than shop assistants.

As long as Copyright is "Life of the author plus seventy (70) years" then I will feel no sympathy for anybody who cries foul. This includes whining about not getting enough money, illegal downloads (aka piracy), loss of control, DRM, etc.

Reduce the length of Copyright to seven years and then we can start talking about fair and adequate compensation for the creative artists. But please... Shut up until then!!
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Well said.
terry flores 17th Sep 2009
The media cartel is wailing about the terms that THEY negotiated with Apple and Amazon, and now that they smell other possibilities of gouging more out of them, they want Congress to overrule the negotiated terms and allow the RIAA to dictate new terms to the online companies.

If Congress does act in favor of the RIAA, they should all go to jail for bribery and malfeasance. There is no constituency served by such an act except for a handful of company executives, faced against the rights of more than 300 million people. It would be a travesty.

But I believe that's exactly what will happen. Never underestimate the willingness of Congress to screw the voters, just witness the messes they create every day ...
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Better than well said!
Ole Man Updated - 18th Sep 2009
Time to fire the President and get rid of Congress..... start over fresh with a new open national popular vote.

Kick the RIAA (and their cohorts) to the curb. Pay your dues directly to the recording artists, and let THEM pay the studios.
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GO READ ...
psquare11 18th Sep 2009
... The Constitution of the United States,
The Unanimous Declaration of the thirteen united States of America,
The Bill of Rights,
The rest of the Amendments to the Constitution,
and, for a little background information, the Federalist Papers -- and maybe even the Anti-Federalist Papers.

THEN spout off about a "new open national popular vote."

If you don't like the President or Congress you have, vote for real change in 2010/2012. But don't whine about what you have now... they were freely elected, now we get to suffer the consequences. We have nobody to blame but our own ignorant selves for the mess we have created. As Pogo said, "We have met the enemy, and they is us."
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Speak for yourself
Ole Man Updated - 19th Sep 2009
I did not (and never would) vote for what we have. I am not responsible for the mess we have, it is those (such as yourself) who would make excuses for it.

I previously posted links to the Constitution and the Bill Of Rights myself, as well as many other documents. Where is all YOUR links?

That is not what Pogo said. I first sarcastically quoted him on ZDNet myself. It went: "We have met the enemy, and he is us".

If you don't like what I say about the President and/or Congress, speak to your mirror about it. You will get much more sympathy from it.
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Apart from, if people obeyed it, leeches like the RIAA wouldn't have so much influence with the lawmakers.

And, as I said elsewhere, artists putting up their livelihood on the internet will sob as everyone downloads it for free. (Anyone proposing internet fees gets booed too.)

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Seven years? You're joking!
Patanjali 17th Sep 2009
That's hardly recompense for the often 100s of hours and $1000s of dollars that get put up on a huge risk just to get it out to an unknown number of buyers.

It sometimes takes more years for the full value of a release to come in.
Remember, only a very, very , very small number of releases are the mega hits that recoup their money quickly.

Now 70 years may be rather long, but lets not swing so low that it will kill incentive.
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Seven may be too short. Or not.
Letophoro 18th Sep 2009
I'd be agreeable to going back to the original 14 years that we had oh so many years ago.

But 14 years was considered long enough when it literally could take weeks just to cross the Atlantic Ocean. Also, it took into consideration that the copyright was granted in large part because making copies required large capital investment. That capital investment would be put in jeopardy if others could undercut the cost by running off their own shoddy copies. Thus restricting the right to make copies was fully justified.

In today's age, copying of anything that can be digitized costs so little as to be functionally zero. That should mean that copyright lengths should be shorter than when it actually cost something to make a copy. Seven years might actually be more reasonable than you think.
It can take a long time for works to catch on, regardless of how quickly it takes to kmake copies. It is the time to propagate knowledge of the existence of the work that can take time.

Also, early releases may not make much for the copyright holders, but they may make money later when the artist has finally achieved enough public exposure. That can be much more than seven years.

Please take achance to think about what happens in practice for the majority of artists rather than the very, very, very few that have instantanious mega sellers.
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Did you even read what I wrote?
Letophoro 21st Sep 2009
Let me restate the first line of my last post:
I'd be agreeable to going back to the original 14 years that we had oh so many years ago.

In my opinion, that seems to be an optimal length of time. It gives the creator time to monetize their work. It also lets the public actually expand upon that work in a reasonable time frame. If the creator is unable to monetize early work because they weren't famous 20 years ago, that's too bad.


"It can take a long time for works to catch on, regardless of how quickly it takes to kmake copies. It is the time to propagate knowledge of the existence of the work that can take time."

I never said that speed of copying was of any import with regards to length of copyright. I said it was the *cost* of copying that drove original copyright law. That cost is effectively zero today.


"Also, early releases may not make much for the copyright holders, but they may make money later when the artist has finally achieved enough public exposure. That can be much more than seven years."

And? What if it takes more than 14 years, or 70 years, or whatever other number you come up with? The reality is that there must be a *reasonable* period of time for the creator to have exclusive rights. At some point, the work needs to enter the public domain.
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By the same token
Cardhu 23rd Mar 2010
getting noticed now is orders of magnitude more difficult than ever before.

I say leave copyright duration alone.
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Do I think lifetime plus 70 years is too long? Yes. But 7 years is ridiculous.

Bear in mind that the latest CONGRESSIONAL extension copyright by initiated by Sony Bono so DISNEY could keep making big bucks from Mickey Mouse. Copyright was NEVER intended for mega-corporations to generate profits; it was to protect the actual CREATOR of the work.

Does copyright need revised? Sure it does; to the benefit of the creator of the work and not the record label, movie studio or corporation who makes money at the creator's expense.
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You nailed it!
ThePrairiePrankster 18th Sep 2009
I wouldn't mind seeing the creator of the content paid for their lifetime and then it reverts to public domain upon the death of the creator(s) of the music or video. The companies who distribute the music or video should not be allowed to have any rights for items they distribute beyond the contract. If the creator of the work dies then the contract dies too.
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100% spot-on. (link)
HypnoToad72 20th Sep 2009
With luck, President Obama and VP Biden will restore some integrity. Good work is rewarded. It should go to the artists, and not the mincing record labels who whine at every turn, despite their profit margins and continual requests for more money:

http://arstechnica.com/old/content/2008/02/riaa-dima-want-to-slash-songwriter-royalties-for-digital-music.ars

http://gizmodo.com/352762/riaa-wants-to-cut-artist-royalties-to-9-apple-wants-them-at-4-artists-just-want-to-eat

Both are from 2008, but I doubt anything has changed in favor of the workers. I can't believe the artists only get 13%. At $15, 100,000 copies make $1,500,000. $195,000 goes back to the band.

That's still a delicious number for the band, but $1,305,000 remaining for the RIAA isn't chicken scratch either. Unless it costs $1,000,000 to make the artwork and to advertise the album... and in a nation of 300,000,000 citizens (whoops, customers), 100,000 is a VERY conservative estimate.

Never mind $15 - DVD movies cost that, or less.

The artists make RIAA. Not the other way around.

Obviously there's probably a happy mid-point to all this. But as most of us aren't able to make a profit out of passions, we're stuck in 9-to-5 day jobs making puny 5 digit salaries. Somebody's being greedy. It's not us...
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That is why they have most often needed third-parties to fund their ambitions.

However, that has also opened them up to exploitation, which still is in need of addressing.

These days it is a lot cheaper to record and produce one's own works, but advertising is still needed in large quantities to get it beyond the 'I've got a CD, and to prove it, I've still got 400 of them in my wardrobe' stage in one's career.

Most people do not have the spare money, expertise or business accumen to do it alone. Talent does not get it all done by itself.
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Absolutely right on!
KarrasB 6th Oct 2009
After years in the entertainment business I can
tell you the term artist-businessman is an
oxymoron. I know some artists who aggressively
promote themselves but all still wait to be
"discovered" by just the right promoter, just the
right producer, just the right manager or agent.
Perhaps it is in all life that no one makes it
alone, but it is decidedly obvious in the creative
fields.
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What about movie copyright?
Vinny_z 18th Sep 2009
How long is the copyright on movies? It doesn't seem fair that musicians can write a song in 30 minutes and then retire on royalties.
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Name one...
jgaskell 19th Sep 2009
...person who has written a song in 30 minutes and retired on royalties.

Some people have a really skewed perception of how much royalties are actually worth. It seems most people expect musicians to just crank out quality music for nothing.

Making music your living is speculative - you need to sacrifice a lot in the hope that you will be one of the few who will actually make a decent living from it. I don't begrudge the tiny tiny minority who make a very good living from it because they had the guts to take the risk and go for it.
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30 minutes?
KarrasB 19th Sep 2009
When is the last time you spent days, weeks,
months, maybe years, creating something that
MIGHT find a market, MIGHT make you money? Most
artists do not get paid for the time spent to
create something which is why the majority of
songwriters I know still have their day job.
Creative fields are different and if an artist
actually sells then let him get paid as much as
he can for it may be his one-time shot at
compensation. For every paid artist there are
dozens, perhaps hundreds, who are not.
have their jobs offshored either, with them training their replacements either.

Why should the execs retire on the work someone else made?
If these ''posts'' have been reported as spam why am I still seeing them!?
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USA is out of step
Patanjali 17th Sep 2009
In Australia, any business that provides music that can be heard by their client must obtain a license for public broadcast.

We pay a yearly songwriter royalty license to have a 30s clip of a Van Morrison song we recorded on our website.

Radio stations pay songwriter and performance licences to be able to play songs.

USA residents have been used to getting music from businesses who have been getting a free ride. Hopefully they will have to pay their way for music that help enhance their reputation.
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RE: out of step
Bodazapha 18th Sep 2009
right... We need someone to pay for consumers listening to a 30 second snippet in hopes that they might BUY the product?

What a great idea! Lets put that model to work in other businesses... Stores can pay Ralph Lauren every time somebody tries on an outfit.
So why should the originators of the music (songwriters and recording artisits) miss out on getting paid for it.

We are talking about the resellers of the music paying to use it to possibly improve their income.

Do NOT confuse the copyright owners with those who are trying to make money or otherwise enhance their own reputations by using the music. The money earned by the latter does not necessary benefit the former. Fees just provide a mechanism by which the former can receive some recompense for being used in the latter's advertising.
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Where did all the Replicas go?
duclod 18th Sep 2009
Can I turn my eight tracks into MP3 files? I mean legally? Is that fair use?
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Face it, most of these people don't have the talent necessary to sell used cars but they want to be rich no matter what. They will be crying about fairness for the rest of their lives. But guess what guys: life ain't fair and you've been left behind. Get a real job.
The music exec's are a bunch of greedy, self-serving,
***clowns, who only do what's right for their own pocket
books. They don't care what music is or what it stands
for they just want to make as much money as they can
before they die. It's never going to change as long as
the RIAA is around we're all going to suffer b/c of their
greed.
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It's how they earn living!!!
Silex 18th Sep 2009
What people fail to realize is that what we call "music execs" are in fact lawyers and professionals paid to do exactly that: cry out loud all the time that artists don't get their fair share.

Not that they make any art or anything... Heck, these people are even out there selling the music! They're just crying out loud! ALL THE TIME...

I hope that one day we will collectively figure out that without these "parasites", there would still be music and and there would still be art.
Pharmaceutical patents last only 20 years in the US. I'm guessing it takes wee bit more research dollars to produce a drug.
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When you see one of these music execs doing the boo-hoo bit; please take a good notice of the color of their tears.

You will no doubt notice that he color of their tears is green!

For those not familiar with the expression, it refers to the tears of a crocodile.
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I've been a performer, manager, promoter and record exec. Stealing someone's patent, copyright, or other property because you can get away with is nothing to brag about. Most musicians starve most of their lives and the royalties were a lifeline and also supported an industry that brought the public talent that is still selling out venues 30 years later. Now you techies have gotten exactly the value you pay for, no pay, for nothing talent. Singers that whine and can't sing and songwriters that can't write. Worst of all the great new talent gets buried in a blizzard of white noise garbage because there isn't enough money in the business to support the infrastructure and talented personnel of all types that broke great talent worldwide. From Stevie Wonder to 50 cent from the Stones and Beatles to the latest no talent whiner. Yeah keep cheering for your free ride, Keep stealing and bragging. Good job!
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Cronie Capitalism at it's worst
zmud 19th Sep 2009
This is why you have a Constitution
It is not Congress's place to make such laws
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Chain o' command, if the artists aren't getting their fair shake... trouble is, artists posting their hard work online will just have it downloaded for free.

Free isn't a business model but being slaves to an umbrella conglomerate isn't any better.

Unless they change things REAL freaking quickly.

Such as lowering the prices of songs to 10 cents each,
allowing people to buy music online at VERY high bitrates
(at least CD quality), etc.
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Then don't buy the products
No_Ax_to_Grind 21st Sep 2009
How much simpler could it be?
There is no incentive for musicians to record songs any more. They just pay at clubs and concerts, and hope they can make enough money to live. That certainly makes it even tougher to survive in the music business, and discourages new talent.

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