Senate panel looks at leveling royalty playing field


The Senate Judiciary Committee held a hearing today, looking into the reason that there are three separate technologies for delivering audio entertainment, and three different royalty regimens to go with them. Senator Ron Wyden (D-OR) argued for a legislative fix; while Bob Corker (R-TN) suggested letting the CRB do its job, and allowing ongoing efforts in the House of Representatives run their course.

Two musicians, Matt Nathanson and John Ondrasik testified before the committee; like most musicians, they face a tough challenge turning their art into a steady source of income. They want fair compensation when their music is played on a commercial venue, whatever that venue may be. Nathanson particularly credits the internet with making his career possible at a time when the big record companies hold an otherwise tight grip on both airplay and retail space: Nathanson said he benefits when his performances are played on the internet, and the retail space away from the brick and mortar world is unlimited, allowing him to bypass the recording companies, establish a following and earn a living.

Wyden, along with Sam Brownback  (R-KS), is behind S.1353 the Internet Radio Equality Act. He said that the high rates the Copyright Royalty Board imposed on webcasters, if allowed to stand, will “serve as a tax on technology, and that is discrimination against innovation.” He added, “My attitude is that it’s critical to treat new technologies with fairness that is based on neutrality, which can be tough when old technologies have loud voices in the debate… I’m not suggesting that artists not be compensated for their work. To the contrary, as the son of an author I’m excited about the possibility that these new technologies could bring greater attention to artists and their work.”

Corker said CRB’s decision followed exhaustive study and that it should be left alone. “I understand that certain groups are not pleased with this result, however, there is an appeals process in place and that process is currently being played out and utilized by both sides,” he said. “I urge this committee to allow this process to take its course instead of forwarding legislation that would overturn a decision that has already been made by the Copyright Royalty Board. Furthermore the House Judiciary Committee is currently facilitating negotiations between the parties. I applaud those efforts, and remind my colleagues that this entire process is to provide fair compensation for the hard work and sacrifice of musical artists and those who invest in them.”

RBR/TVBR observation: The NAB is going to have their hands full with the royalty topic on Capitol Hill – it just keeps coming and coming and coming. It doesn’t help that doubles down on committee interest, adding judiciary scrutiny to the normal commerce attention.  It poses a real problem for the artists, who have to decide if they want what will most likely be a small cache of cash at the expense of getting their work out there for paying customers to discover, leading to recording sales and purchased concert tickets. One thing is for sure – this is another issue to keep close tabs on.