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The (Somewhat Screwy) State of Music Copyright Law Right Now, From The Perspective of Congress

Posted by Glen Sears | October 12, 2015 2:46 pm | No Comments

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It doesn’t take a law professor to understand that musical copyright is a complex beast. Just look at all the artists up in arms about Soundcloud takedowns, or MediaNet’s own exploration of the dizzying spiral of music ownership. Copyright laws are always passed with the intention of protecting rights owners, but as time passes and new technologies arise these protections can have counterproductive consequences.

The Library of Congress’ own Congressional Research Service has identified these protection gaps in a 37-page report called “Copyright Licensing in Music Distribution, Reproduction, and Public Performance.” The report, authored by attorney Brian Yeh, outlines the basics of musical copyright law then identifies 4 major areas where copyright law needs to be updated to support the current musical ecosystem.

Any reader interested in the history of how copyright law came to be should take the time to read the first 16 pages of the report. Yeh does a masterful job of explaining how various facets of musical copyright work together, as well as providing the context under which various protections were instituted. The real meat of the report, however, starts at page 18. Here The CRS outlines the 4 major areas it believes copyright law should be updated for 2015 and beyond.

Federal Protection for Pre-1972 Sound Recordings

As recent news may have informed you, digital radio services are required to license sound recordings, but due to a loophole only those sound recordings produced after 1972. According to the report “such pre-1972 sound recordings constitute approximately 15% of all digital radio transmissions and would have provided about $60 billion in music royalties for recording artists in 2013, according to one industry estimate.”

While some states have taken it upon themselves to pass legislation to close this gap, there still exists no federal protection for the rights holders of these sound recordings. Two pieces of legislation, The Fair Play Fair Pay Act and the RESPECT Act, have been offered up to bolster protection for pre-1972 recordings, but both lack total protections for rights owners. In addition, the report states these measures could “have the effect of dissuading digital music services from including the ‘golden oldies’ in their music catalogs.”

Extending the Performance Right in Sound Recordings to AM/FM Radio Broadcasts

Despite extending public performance copyright protections to sound recording owners in 1995, these protections did not include AM/FM radio transmissions. “Thus, public performance of sound recordings through non-digital audio transmissions does not trigger any obligation on the part of the radio broadcaster to pay royalties to the sound recording copyright holder.”

In 2013 the Register of Copyrights testified to a House Judiciary Committee that Congress should extend “full” public performance rights to sound recordings in all types of transmissions. While the Fair Play Fair Pay Act would extend copyright protections to all types of broadcast, an opposing piece of legislation called the Supporting the Local Radio Freedom Act would direct Congress not to impose any new performance fees or royalties for over-the-air broadcasts of sound recordings by local radio stations.

Standards for Setting Royalty Rates for Public Performance of Sound Recordings

An entity called the Copyright Royalty Board calculates the royalty rate applicable to “compulsory” licenses by applying a standard that is specified in the Copyright Act. The Digital Millennium Copyright Act established different standards for the compulsory license depending on the type of digital service and whether the service existed at the time of the DMCA’s enactment.

“The Fair Play Fair Pay Act of 2015 (H.R. 1733) would require the Copyright Royalty Board to set performance royalty rates for satellite radio and cable music providers by applying the same ‘willing buyer/willing seller’ standard that the CRB currently uses in determining Internet radio webcasters’ royalty rates, instead of using the 801(b) standard.”

The Internet Radio Fairness Act was introduced in order to “level[] the playing field for Internet radio services” and reform the current royalty rate calculation system. However, organizations like SoundExchange oppose such legislation as they suspect it would cause services like Pandora to pay less in royalties than they do now.

Modification of Consent Decrees Governing Songwriter Performance Royalties

In 1976 performing rights organizations such as ASCAP and BMI were legislated to be subject to “consent decrees,” for fear that they would monopolize the royalty collection process. As such, all agreements with PROs must be submitted to the Circuit Court of New York to verify their veracity.

In June 2014, the U.S. Department of Justice’s Antitrust Division announced that it would initiate a review process to examine the operation and effectiveness of these consent decrees, after ASCAP, BMI, and other parties in the music industry raised concerns that the consent decrees have been unable “to account for changes in how music is delivered to and experienced by listeners.”

The Songwriter Equity Act, with support from a consortium of hospitality companies, seeks to help increase the performance royalty payments from PROs, which includes keeping consent decrees on the books.

What Does It All Mean?

Copyright law is a complex beast. The deeper you dive, the more complex it becomes. At the end of the day, the changes proposed by the CRS will only help so long as the technologies we use support these regulations, rather than circumvent them.

MediaNet believes that all rights holders should be paid for every play. We have created an end-to-end licensing, distribution, fulfillment, reporting, and payment system that ensures all payments are delivered to the letter of the law.

Like many large pieces of legislation, U.S. copyright law will never be “complete.” All we can do in the mean time is ensure that all rights holders are getting their fair share of payment for creative works.

MediaNet features the only digital music catalog that internally matches sound recordings directly to rights holders, ensuring maximum accuracy and industry-leading reporting. Want to talk about how MediaNet can power your music experience? Let’s chat!

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