Yesterday on my way up to my ” Ladies Who Lunch ” in Seattle, I was waved over by a motorcycle cop. Can you believe it???!!!! …..he wasn’t even on his bike, just caught my eye, as I was driving past, and waved me off of the road. I should have pretended to be stupid, like a didn’t see him, but I figured, ahh what the heck, he will probably let me off, since I was so nice to pull over, and after all, I was going with the flow of traffic. NO way! He said he clocked me at 70 mph going into 71 mph ( come on, is this really speeding? )..but he ended up writing me a ticket for only 5 mph over the speed limit. This ticket will still cost me $93.00, plus it goes on my drving record. I wouldn’t really mind, but I tend to get speeding tickets about once a year..which is a lot fewer, than when I was in my 20’s. Arrggg!!!!!!!!
So…” Ladies Who Lunch ” is made of of woman in the NW music scene, and yesterday the lunch was hosted by John L. Simson, the Executive Director of Sound Exchange. I am going to post some of the high points of his speech. If you do not know what Sound Exchange does…first scan to the botttom of this post to read their websight over view…
a few interesting things that John told us are this….
-the average artist that they pay gets a check for $360 a year
-5% of the money they are collecting is for background singers, and musicians, who are not featured on the recording by name , people can go to www.raroyalties.org to find out more about this.
-The Board of Sound Exchange is made up of 6 major labels reps, and 3 indie label reps
-They only lobby for performance rights…they do not compete with BMI, ASCAP, or anything of those other companies.
-Every 5 years they set rates through the government, and bargaining
-some companies such as XM and Sirius radio , which makes over a billion in revenues, only want to pay 1% for performance royalties.
- studies have shown that people who listen to satellite radio are buying 30% less cd’s than they did previously
- studies ” suggest ” that 90% of people who listen to radio do not buy much music at all, because their music needs are met. Some commercial radios are making 20 billion a year in advertisement, but it still doesn’t help sell records/cds anymore.
-Studies show that the majority of Pandora listeners/users do not buy from listening to Pandora.
- When commercial radio first came to India, cd sales went way down. No one needed cd’s anymore, because they had free music
-There are still ways for bands to give away their music if they want, and the same applies to small non-commercial webcasters. He says that musicians should build in terms when they choose to do this…such as limiting the usage ( maybe only 1 -2 years to start ), and also building in other terms, such as # plays per day, or linking to a bands website, where you could buy the music. The webcasters must have a signed pre-approval for this to happen though.
- 30 other countries already have these laws in effect, with the exception of the US, China, small countries in Africa, and a some others that are probably not worth mentioning.
- The judges who help set the royalty rates have found no compelling evidence that webcasters playing music leads to people buying music. This was decided after looking over 10,000 pages of transcripts over many months
-The rates that were set by these judges, that people are now fighting, are very similar to what the world wide rates are currently.
- webcasters have a profit margin of 65-85% ( I think this is commercial )
-2002 the Sound Exchange made a deal with the NFP stations that they could pay a total of $500 a year to play music..this deal expired in 2004, and since then, they are still playing music, but have not paid any fees for 2 1/2 years…so the npr stations saying they will have to shut down shop on a certain date because of these new royalty rates is kind of ridiculous..since they never stopped before, they just stopped paying.
-Sound Exchange does not believe that commercial , and non-commercial stations should have to pay the same rates..they are very willing to negotiate, but they need to receive data from everyone in order to do that. They are hoping they can come to an agreement with the npr stations by late Oct.
- They are offering colleges with less than a certain amount of people, to pay only $250 a year in royalties.
- Previously, people were telling them that it was too difficult to track what was being played, etc, so in 2004 they came up with machine that can track everything for them, but they have to want to use it.
-Last FM paid them as a small webcaster, then turned around and sold the business for 280 million!
-The small webcasters are a mixed bag of people as far as money goes…for the 50 that gave info..
5 of those earned over $50,000 a year
5 earned under $50,000
10 earned over $20,000
- only 20 companies pay 95% of the royalties that are collected by Sound Exchange..14 of these companies are billion dollar companies, and 6 of them are million dollar companies. These companies are trying to pass a bill which would cut the current royalty rates by 70%, which they had previously agreed on, and paid. If this bill passes, Sound Exchange will have to re-pay these companies millions of dollars that Sound Exchange has already given to artists and labels.
- you are able to collect royalties for anything that is played over the internet, not just music, but poetry, theater, etc.
ok, that was most of it…John Simson also spoke about the history of royalties, and about Frank Sinatra trying to get performance royalties instated during his career, and that fact that he was unsuccessful. The history was very interesting, but I am not going to go into that.
From the Sound Exchange website ( www.soundexchange.com )….
SoundExchange is an independent, nonprofit performance rights organization that is designated by the U.S. Copyright Office to collect and distribute digital performance royalties for featured recording artists and sound recording copyright owners (usually a record label) when their sound recordings are performed on digital cable and satellite television music, internet and satellite radio (such as XM and Sirius). SoundExchange currently represents over 3,000 record labels and over 20,000 artists and whose members include both signed and unsigned recording artists; small, medium and large independent record companies; and major label groups and artist-owned labels.
Prior to 1995, Sound Recording Copyright Owners (SRCOs) in the United States did not have a performance right. This meant that, unlike their counterparts in most of Europe and other nations around the world, recording companies and artists were not entitled to receive payment for the public performance of their works. Users of music, the digital music service providers, freely performed these works at will, without a dime being paid to the rightful owners of those recordings or the featured artists who performed the songs - the recordings which created the backbone of their business.
The Digital Performance in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998 changed that by granting a performance right in sound recordings. As a result, copyright law now requires that users of music pay the copyright owner of the sound recording for the public performance of that music via certain digital transmissions. The U.S. Copyright Office recognized the benefits of SoundExchange’s administration of these royalties, and so has designated SoundExchange as the administrative entity for subscription services’ statutory license fees. You may find SoundExchange’s Notice of Designation as Collective Under Statutory License here. The Copyright Royalty Board (CRB) was established by Congress in 2004 to set fair market rates to be paid to recording artists and record labels under the statutory license. The CRB reaffirmed SoundExchange’s sole collective status in 2007.
