RIAA and NMPA focus in on the value of music

October 2015

Music publishing, recorded music



The CEO and chairman of the RIAA has said that the current notice and takedown anti-piracy process is both costly and increasingly pointless. Cary Sherman says the USA’s safe harbor provisions contained in the DMCA have forced labels into a “never-ending game” of whack-a-mole while sites under its protection effectively obtain a discount music licensing system clarly highlighting the frustration the major record labels and their Hollywood counterparts feel about framework designed to facilitate the removal of infringing content on the Internet. Sherman also commemnted on “the flawed licensing regime in which we have to operate” saying “Government-set licensing has enabled services like Sirius XM to use music at below-market rates, based on a decades-old subsidy that has long outlived its purpose” adding “Even worse, under current law, AM/FM radio broadcasters pay absolutely nothing for the sound recordings they use to draw listeners and generate billions of dollars in revenue. In a marketplace that values innovation, it’s ironic that it’s the legacy technologies enjoying government-granted economic benefits and competitive advantage” and “while the music industry has embraced new technology and business models, the beneficiaries of this broken system cling to this antiquated law that was enacted at the turn of the century, well before the modern Internet and today’s most advanced (and unimagined) technologies”.
National Music Publishers Association (NMPA) boss David Israelite, responding to an argument from Pandora which suggested that the majority of US citizens won’t pay for streaming, has said that ‘free’ music is devastating for songwriters saying “Pandora is keeping 54% of its revenue, and sharing only around 4% with the creators who write the songs. That means Pandora believes that delivering songs over an Internet connection is somehow worth more than 13 times the songs themselves. There is no news, no sports, no weather, no comedy – only music. Yet the music creators get less than 5% of the revenue generated from the service” citing Taylor Swift who famously said last year “I’m not willing to contribute my life’s work to an experiment that I don’t feel fairly compensates the writers, producers, artists and creators of this music. And I just don’t agree with perpetuating the perception that music has no value and should be free.”   La Roux. tweeted this week: “Thanks for the £100 for this quarter [Spotify] …one more month and I might be able to afford your premium service. Lucky me!” Separately Pandora CEO Brian McAndrews told reporters that Pandora had now paid out a historical  $1.5 billion in royalties saying: “I am proud of our enormous royalty contributions, and our progress on building on a broader vision for the future of music. We are very passionate about our mission to help artists find their audience and help listeners find their music – music they love, that moves them, that they personally connect with – and we are achieving significant momentum”.





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