Musicians: iTunes Not Paying Fair Share
Crystal Foust watches from County Road 56 as a helicopter flies over a wildfire burning in a mountainous area about 15 miles west of Fort Collins, Colo., on Sunday, June 10, 2012. Firefighters on Sunday were fighting wildfires that have spread quickly in parched forests in Colorado and New Mexico, forcing hundreds of people from their homes and the evacuation of wolves from a sanctuary. The Colorado fire grew to 22 square miles within about a day of being reported and has destroyed or damaged 18 structures. (AP Photo/The Denver Post, AAron Ontiveroz) MAGS OUT; TV OUT; INTERNET OUT; MANDATORY CREDIT / AAron Ontiveroz
This story was written by CNET's Greg Sandoval.
Songwriters, composers, and music publishers are making preparations to one day collect performance fees from Apple and other e-tailers for not just traditional music downloads but for downloads of films and TV shows as well. Those downloads contain music after all.
These groups even want compensation for iTunes' 30-second song samples.
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. This would also undoubtedly confirm the perception held by many 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.
"We make 9.1 cents off a song sale and that means a whole lot of pennies have to add up before it becomes a bunch of money," said Rick Carnes, president of the Songwriters' Guild of America. "Yesterday, I received a check for 2 cents. I'm not kidding. People think we're making a fortune off the Web, but it's a tiny amount. We need multiple revenue streams or this isn't going to work."
An Apple spokesman declined to comment.
ASCAP and BMI have their sights set on collecting fees from three main areas: downloads of music; downloads of films and TV shows, and 30-second song samples.
In case you don't know the lingo of music licensing, here are some important definitions. When music is performed in public, say at radio stations, restaurants, or sports stadiums, groups such as ASCAP and BMI collect fees and pass it on to composers and songwriters. This is different than a "mechanical" licensing fee, which is paid for the right to record or distribute a song (ASCAP and BMI don't collect mechanical fees).
"In the U.S. while we do get paid a mechanical (licensing fee) from ITunes, we are not getting any performance income from Apple yet," David Renzer, chairman and CEO of Universal Music Publishing Group, said in interview late last month with entertainment-industry publication, Encore. "(On iTunes) you can stream radio, and you can preview (tracks), things that we should be getting paid performance income for.
"Also, if you download a film or TV show," Renzer continued, "there's no performance (payment) and typically there's no mechanical (payment) either."
Taking their case to Congress
Apparently, the music industry can't obtain the fees through negotiations. They have begun lobbying Congress to pass legislation that would require anyone who sells a download to pay a performance fee, according to David Israelite, president and CEO of the National Music Publishers Association.
"If you watch a TV show on broadcast, cable or satellite TV there is a performance fee collected," Israelite said. "But if that same TV show is downloaded over iTunes, there's not. We're arguing that the law needs to be clarified that regardless of the method by which a consumer watches the show there is a performance right."
Israelite acknowledges that the legislative efforts to this point have produced little. And they won't produce a thing if Jonathan Potter gets his way.
Potter is executive director of the Digital Media Association (DiMA), a trade group that represents Web music services and media companies, such as RealNetworks, Pandora, and Apple.
He stresses two points.
First, publishers, composers and songwriters do get paid for music inserted into TV shows and movies. A production company must pay a "synchronization" fee for the right to include a song in any show or film. Then, once the show airs or the film is screened, the music guys will require a separate payment from TV networks or studios for performing the music publicly. Israelite confirmed this.
Critics argue this is double dipping.
Israelite makes no apologies. He says that synchronization and performance fees cover very different rights. To illustrate the point, he says not all composers receive money from TV and films. Say, for example, a TV show licenses a popular tune from singer Aimee Mann or the rock band The Fray. Those acts would likely be paid both sync and performance fees. But the person who writes the little-known background music heard during a fight scene may not see any sync money. That's because traditionally, composers of this kind of production music gave away sync rights in the hope they would make money from performance fees.
"This is really a fight about the future," Israelite said. "As more and more people watch TV or movies over an Internet line as opposed to cable or broadcast signal, then we're going to lose the income of the performance. For people who do production and background music, that's how they make their living."
Potter's is very sorry for those people, but if their income is drying up, the second major point he wanted to make was that their troubles are not the fault of iTunes, Amazon, or consumers.
"These guys are afraid that the business model is shifting away from public performances to a model of private performances," Potter said. "This is a turf battle. They are saying, 'The songwriters aren't getting paid.' Baloney. Songwriters are getting paid. They're paid sync rights and (mechanical) rights. They aren't getting paid for the public performance in a download because there is no public performance in a download."
Downloading count as a performance?
Whether downloading a song from the Web should be considered a performance is much contested. So far, the courts have sided with digital media companies.
In 2005, ASCAP entered into a rate-court proceeding to set licensing fees for the music services of Yahoo, AOL, and RealNetworks. A U.S. district judge for the Southern District of New York delivered a blow to composers and songwriters by ruling that downloading music from a Web store was not a music performance. On the other hand, the judge found that streaming music was subject to a performance fee.
"The songwriter gets a performance fee if the song is streamed without the video," Carnes noted. "But if it is downloaded within an audio-visual work like a movie we don't get a performance fee--same song, no money."
ASCAP has appealed the decision and arguments in the case will be heard later this year.
Of all of the efforts to collect performing-rights fees, few will likely be more controversial than trying to charge for 30-second samples. These are the previews iTunes offers so users can test drive a song and hear what they're buying. According to sources close to the company, iTunes has acquired licenses to offer the previews but hasn't paid anything for them. According to Renzer's comments, music publishers want that to change.
Potter from DiMA argues that copyright law protects Apple and music stores from being charged performance fees for in-store sampling.
"They are picking on Apple because they say Apple is making a bundle of money," Potter said. "But these companies should be thrilled that Apple and the other services are selling music and generating millions, maybe tens of millions, in royalties."
By Greg Sandoval
CNET Songwriters, composers, and music publishers are making preparations to one day collect performance fees from Apple and other e-tailers for not just traditional music downloads but for downloads of films and TV shows as well. Those downloads contain music after all.
These groups even want compensation for iTunes' 30-second song samples.
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. This would also undoubtedly confirm the perception held by many 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.
"We make 9.1 cents off a song sale and that means a whole lot of pennies have to add up before it becomes a bunch of money," said Rick Carnes, president of the Songwriters' Guild of America. "Yesterday, I received a check for 2 cents. I'm not kidding. People think we're making a fortune off the Web, but it's a tiny amount. We need multiple revenue streams or this isn't going to work."
An Apple spokesman declined to comment.
ASCAP and BMI have their sights set on collecting fees from three main areas: downloads of music; downloads of films and TV shows, and 30-second song samples.
In case you don't know the lingo of music licensing, here are some important definitions. When music is performed in public, say at radio stations, restaurants, or sports stadiums, groups such as ASCAP and BMI collect fees and pass it on to composers and songwriters. This is different than a "mechanical" licensing fee, which is paid for the right to record or distribute a song (ASCAP and BMI don't collect mechanical fees).
"In the U.S. while we do get paid a mechanical (licensing fee) from ITunes, we are not getting any performance income from Apple yet," David Renzer, chairman and CEO of Universal Music Publishing Group, said in interview late last month with entertainment-industry publication, Encore. "(On iTunes) you can stream radio, and you can preview (tracks), things that we should be getting paid performance income for.
"Also, if you download a film or TV show," Renzer continued, "there's no performance (payment) and typically there's no mechanical (payment) either."
Taking their case to Congress
Apparently, the music industry can't obtain the fees through negotiations. They have begun lobbying Congress to pass legislation that would require anyone who sells a download to pay a performance fee, according to David Israelite, president and CEO of the National Music Publishers Association.
"If you watch a TV show on broadcast, cable or satellite TV there is a performance fee collected," Israelite said. "But if that same TV show is downloaded over iTunes, there's not. We're arguing that the law needs to be clarified that regardless of the method by which a consumer watches the show there is a performance right."
Israelite acknowledges that the legislative efforts to this point have produced little. And they won't produce a thing if Jonathan Potter gets his way.
Potter is executive director of the Digital Media Association (DiMA), a trade group that represents Web music services and media companies, such as RealNetworks, Pandora, and Apple.
He stresses two points.
First, publishers, composers and songwriters do get paid for music inserted into TV shows and movies. A production company must pay a "synchronization" fee for the right to include a song in any show or film. Then, once the show airs or the film is screened, the music guys will require a separate payment from TV networks or studios for performing the music publicly. Israelite confirmed this.
Critics argue this is double dipping.
Israelite makes no apologies. He says that synchronization and performance fees cover very different rights. To illustrate the point, he says not all composers receive money from TV and films. Say, for example, a TV show licenses a popular tune from singer Aimee Mann or the rock band The Fray. Those acts would likely be paid both sync and performance fees. But the person who writes the little-known background music heard during a fight scene may not see any sync money. That's because traditionally, composers of this kind of production music gave away sync rights in the hope they would make money from performance fees.
"This is really a fight about the future," Israelite said. "As more and more people watch TV or movies over an Internet line as opposed to cable or broadcast signal, then we're going to lose the income of the performance. For people who do production and background music, that's how they make their living."
Potter's is very sorry for those people, but if their income is drying up, the second major point he wanted to make was that their troubles are not the fault of iTunes, Amazon, or consumers.
"These guys are afraid that the business model is shifting away from public performances to a model of private performances," Potter said. "This is a turf battle. They are saying, 'The songwriters aren't getting paid.' Baloney. Songwriters are getting paid. They're paid sync rights and (mechanical) rights. They aren't getting paid for the public performance in a download because there is no public performance in a download."
Downloading count as a performance?
Whether downloading a song from the Web should be considered a performance is much contested. So far, the courts have sided with digital media companies.
In 2005, ASCAP entered into a rate-court proceeding to set licensing fees for the music services of Yahoo, AOL, and RealNetworks. A U.S. district judge for the Southern District of New York delivered a blow to composers and songwriters by ruling that downloading music from a Web store was not a music performance. On the other hand, the judge found that streaming music was subject to a performance fee.
"The songwriter gets a performance fee if the song is streamed without the video," Carnes noted. "But if it is downloaded within an audio-visual work like a movie we don't get a performance fee--same song, no money."
ASCAP has appealed the decision and arguments in the case will be heard later this year.
Of all of the efforts to collect performing-rights fees, few will likely be more controversial than trying to charge for 30-second samples. These are the previews iTunes offers so users can test drive a song and hear what they're buying. According to sources close to the company, iTunes has acquired licenses to offer the previews but hasn't paid anything for them. According to Renzer's comments, music publishers want that to change.
Potter from DiMA argues that copyright law protects Apple and music stores from being charged performance fees for in-store sampling.
"They are picking on Apple because they say Apple is making a bundle of money," Potter said. "But these companies should be thrilled that Apple and the other services are selling music and generating millions, maybe tens of millions, in royalties."
By Greg Sandoval
Popular in SciTech
- Apple's next iPhone may be coming in June
- Greatest threat to Africa's white lions: American hunters Play Video
- Thousands online proclaim: Jahar Tsarnaev is innocent
- "God particle": Why the Higgs boson matters
- Alternatives to Google Reader
- Apple's iPhone 6 may have bigger screen, analyst says
- Beam this up: Creating the sounds of "Star Trek"
- Drone technology myths, facts and future feats
So be it.
Articles like this make it sound like composers aren't getting their fair share. And it is just not true. I agree with Potter's position -- songwriters ARE getting paid for their download -- they are getting their mechanical fee, which is 9.1 cents per copy (which happens to be set by law), they are getting their sync license fee for video downloads (which is determined at contract negotiation). You want more, then change those amounts -- don't start claiming bogus rights at the expense of the consumers and the retailers (both of whom help to make YOU, the composer, money).
Go ahead, sue. Join the long line of artists now resorting to lawsuit. If the likes of the Rolling Stones, The Eagles, the Van Zandts, (and that's just mentioning just some of the "white" people) have to sue for their payment what chance do you really think a not-famous songwriter have against these people?
Ever heard of cross-collateralization?
It is not the artists, but the publishing rights organizations ASCAP and BMI who are making these demands. These companies no more represent musicians than does Xie company.
They position themselves between the artist and the money, collect the cash, and then it magically disappears before the artist has seen a single cent.
The publishers call it a performance fee, just so you think it goes to those who performed it, No such animal.
I usually don't type in caps, but I must say this, ASCAP and BMI ARE NOT DOING THIS FOR THE ARTISTS. They are just looking for more to steal FROM the artists.
Require payment for a sample, and no one will listen to enough to buy the song.
And your payment for inclusion in a movie comes from the people who made the movie. ITunes doesn't have to pay ever actor separately their chunk, same goes for those who made the music, did the directing, or brought the coffee.
Give the industry enough leeway and iTunes will have to pay all the actors, etc separately.
BS.
"ARTISTS SAY THEY WANT THEIR MUSIC SITE DOUGH
By PETER LAURIA
Posted: 1:10 AM, February 27, 2008 NY Post
Artist managers are girding for battle with their music overlords over when their clients are going to see some of the dough negotiated last year in copyright-infringement settlements with a host of Web sites.
Universal Music, Warner Music and EMI - either collectively or individually - settled claims with Napster, Kazaa and Bolt.com. Napster alone had to cough up $270 million. The fourth major label, SonyBMG, was not part of the suit; SonyBMG and Napster are both owned by Bertelsmann. All four struck separate deals with YouTube that included revenue participation.
A contingent of prominent artist managers claims that little to none of that money has trickled down to their clients. They are now considering legal action.
"Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for," said lawyer John Branca, who has represented Korn, Don Henley, and The Rolling Stones, among others."Some of them are even talking about filing lawsuits if they don't get paid soon."
Record label sources said corporate bosses are still deciding on how best to split the money. In determining the payout, they said not every artist is owed money and it must be calculated with regard to the level of copyright infringement for each artist. What's more, these sources said that after the labels recouped their legal expenses, there wasn't much left to pass along to the artists.
But a source on the artists' side said that is an argument heard all too often in the music business. Getting money out of the major labels is never easy, but given the industry's downward financial spiral it is exponentially more difficult now, the source said. "The record labels are experts at transferring money around and putting the onus on artists managers to find it."
Irving Azoff, the legendary talent manager for The Eagles and Jewel, among others, echoed that sentiment. "They will play hide and seek, but eventually will be forced to pay something," Azoff said. "The record companies have even tried to credit [unclaimed royalty] accounts. It's never easy for an artist to get paid their fair share..."
The RIAA had, as of the date of the above post, collected more than half a billion dollars, and had not paid a single cent to the owners of the works for which they sued people.
Strangely enough check out what Courtney Love had to say on the matter, you will find a new respect for her.
Don't blame it on the artists.