“As the primary musician on this sound recording, Lady Gaga would receive 45 percent of the total royalty, almost $201,000,” the GAO estimates, if the tithe came in at 2.35 percent. ” The copyright holder would earn 50 percent, or over $223,000, and the background musicians and performers would share 5 percent, over $22,000.”

But most musicians wouldn’t make nearly that sum. The GAO estimates that 56 percent of performers would take in  $100 or less per year. Less than 6 percent of artists would receive $10,000 or more per year in royalties from airplay in the top 10 markets—these generate about 21 percent of industry revenues.

Still, many artists would make between $500 to $100,000 a year. Here’s the complete breakdown of the GAO’s estimate:

I can’t see why lawmakers would want to do that (besides to make big content and big broadcasting happy). Besides, lots of handsets already have FM radios, including my neat Droid X.

Here’s a Youtube video describing the innards of the Droid FM app.

From the pages of Essence and the Huffington Post, Radio One’s Kathy Hughes and singer Dionne Warwick take potshots over the Performance Rights Act. African American station owner Hughes is decidedly con on  the proposed law, which would require over-the-air radio signals to compensate performers as copyright law has them pay royalties to song copyright owners.

“We keep hearing that these entertainer[s] need to get paid,” declares Hughes. “Oh, so Chris Brown needs another Lamborghini to beat up a girl in? No! The artists who they are talking about like Martha Reeves and the Vandellas aren’t going to get a penny. Nobody is playing Dionne Warrick [sp]. When was the last time she had an album. That’s what’s stupid about this.”

Warwick, who supports the PRA, was quick to return the compliment.

“In defending her refusal to fairly compensate the artists on whose back she earns her living, Ms. Hughes now claims poverty, which is pretty amazing considering Radio One owns 54 radio stations and reaped $316 million last year alone,” the singer wrote on Huffpo. “She even paid her own son, Radio One CEO Alfred Liggins, a $10 million bonus. Far from a struggling company, Radio One sounds more like one of those Wall Street rip off firms where executives pay themselves big bonuses while they rip us off and throw their workers in the street.”

Good grief. When will this end? Every time I try to come up with a position on this issue, I go into an endless feedback loop.

Sure, it’s not fair that online stations like Pandora have to pay the performance tithe and over-the-air stations don’t. But there couldn’t be a worse time for this law. A huge percentage of terrestrial stations are on the financial cliff. Even the Government Accountability Office appears to have found credible broadcaster claims that if the PRA passes, some licenses could close or lay off staff.

And more and more audio entertainment is migrating online anyway. Arbitron’s latest survey of formats finds 96 “adult urban contemporary” Internet stations, a number competitive with FM’s 144. In the case of the “urban contemporary” category the ratio is 81 to 126.

On the other hand, it’s sometimes hard to take broadcaster poverty claims seriously when they’re still getting busted for payola.

One thing is for sure, this strikes me as a real zero sum battle, and not a civil one either. That’s why every time the debate flares up, I want to take the advice of one of Warwick’s hit songs and just “walk on by.”

source: deseo.com

Responding to a Congressional request for negotiations over the Performance Rights Act, the National Association of Broadcasters says it’s ready to chat, sort of.

“NAB is of course willing to talk with members of Congress on this issue and any issue that could negatively impact the ability of free and local hometown radio stations to serve our listeners,” declared NAB Vice President Dennis Wharton. “We would hope that any discussions would also include some of the nearly 300 members of Congress who oppose the RIAA-backed bill.”

That’s the acronym for the Recording Industry Association of America, of course, which wants Congress to require radio stations to pay royalties to the performers of songs that they broadcast. The NAB, and the rest of broadcasting, are ardently opposed to this proposal. Wharton’s comment roughly translates into: “We’d be happy to talk about what a dog of an idea this is with anybody.” But to be fair, surely the RIAA takes the opposite obstinate stance.

The Performance Rights Act has been successfully voted out of the House and Senate Judiciary Committees. On Friday their principals sent letters to an NAB biggie and pro-PRA musicFIRST spokesperson Jennifer Bendall calling for negotiations before the bills hit the House and Senate floor. The talks would start on November 17.

Meanwhile the NAB says it has 252 House reps and 27 U.S. Senators supporting the Local Radio Freedom Act, a resolution that opposes “any new performance fee, tax, royalty, or other charge” on terrestrial radio stations. That would appear to doom the PRA in the House, which has 435 members. But you never know about these things.

George Chambers of KXIT

“I have removed all songs of artists that are part of musicFirst and will not play their songs for now,” KXIT owner George Chambers told the FCC. But: “I have made contact with musicFirst to reverse my decision not to accept ads by musicFirst regarding the PRA and will now accept paid ads on the issue.”

Classic hits station KXIT FM 94.5 describes itself as “the most powerful radio station north of Amarillo operating with 100,000 watts of power.”

If enacted by Congress and signed by the President, the Performance Rights Act would require terrestrial radio stations to pay royalties to musicians for their songs. As we’ve reported, MusicFIRST, a coalition of musicians groups, the Recording Industry Association of America, and SoundExchange, have petitioned the FCC to investigate the alleged refusal of radio stations to air pro-PRA ads, and allegations that some stations won’t play the music of PRA supporting artists.

It’s unclear how many station owners are engaged in the latter practice. But Chambers has made it clear that he’s one of them. Here’s his letter:

As the owner-operator of KXIT radio I feel this issue is a two way street. The artist need the radio station to play their songs to get exposed, radio plays the songs and sells advertising. Radio stations have been presented Gold records as a thank you for the success of a songs sales. Extra fees on this broadcaster may prevent us from playing music altogether. We are struggling as a very small business. Our market is very small and KXIT provides a service to the community that is vital to the people of the community. This area has no NOAA Weather radio, during times of extreme weather KXIT is of great importance to the area. As a community service we serve this area with information for our community with school news, local events, hospital news, road reports and the list goes on and on.

Please do not hold the radio broadcaster hostage due to the artist making bad deals with the record companies.

I have removed all songs of artists that are part of musicFirst and will not play their songs for now. My attemps to make contact with the authors of these bills have gone ignored by Reps Conyers, Issa, Cooper and Senators Hatch & Hutchison. This broadcaster must purchase all songs played on my station and I feel it is my right to play the songs I choose, no one should tell me what to and not to play. I have made contact with musicFirst to reverse my decision not to accept ads by musicFirst regarding the PRA and will now accept paid ads on the issue. As of this date there has been no reply from musicFirst.

Tim Westergren; source: flickr

If you listen to Pandora internet radio, you probably got a message yesterday from the service’s founder Tim Westergren, asking subscribers to support the Performance Rights Act. That’s the proposed law that would require terrestrial radio stations to pay performance royalty fees to the artists whose music they broadcast.

“The system as it stands today is fundamentally unfair both to Internet radio services like Pandora,” Westergren wrote to subscribers, “which pay higher royalties than other forms of radio, and to musical artists, who receive no compensation at all when their music is played on AM/FM radio.”

At present streaming services do have to pay performance royalty fees. This week, Sound Exchange, the non-profit that sets the fee rates, released new terms that most observers say will be less onerous on streamers.

“We, along with the artists whose music we play, strongly support the establishment of a level playing field, a truly fair system,” Westergren’s subscriber letter concludes.

Most commercial broadcasters strongly oppose the PRA, as do college radio stations. At present the bill is reported out of the House Committee on the Judiciary. A parallel law is still in committee in the Senate. Over-the-air broadcasters are pushing a counter resolution in the House that would prohibit imposing performance fees on their stations.

The folks in the DJ booths don’t have much sympathy.  Commercial and college radio stations across Wisconsin say the bill could severely damage their businesses.

“The real problem is the recording industry. They are greedy, rapacious people,” said Dave Black, general manager of WSUM, the UW student radio station.

Black says many college stations in Wisconsin could close if Congress imposes the fees on them.  He says WSUM receives enough funding to stay open.

As College Broadcasters, Inc. (CBI) has argued, not only are the fees of concern to small broadcasters and college radio stations, but the related record keeping requirements could also be more labor-intensive than many student stations can handle. CBI is working to try to stop this bill with a letter writing campaign among other strategies. As a part of that effort, a few weeks back a letter was sent to Congress that was signed by more than 80 student stations who are opposed to the proposed legislation.

It’s sad to think that stations might be so adversely effected by the bill that they’d consider shutting down or going “all talk.” But, it wouldn’t surprise me. A lot of scary things are happening in the non-commercial sector in our current economy. One college’s administration even gave the excuse of fear over potential FCC fines as a one of the reasons for shutting down their FM signal (but I bet the prospect of getting a big influx of cash from possible suitors like public radio and religious groups had the school salivating even more). It’s too bad that not all universities appreciate college radio’s important role in the community and the power of free, terrestrial broadcasts.

The NAB presently has 237 reps signed onto the counter-bill. The PRA, sponsored by John Conyers (D-MI), got a green light from the House Judiciary Committee early last month. There’s a senate version that’s still sitting in the Judiciary Committee. This week the combat on the blogosphere is over whether PRA supporters are opposed to black radio.

Let’s not go there, but it seems like an appropriate time to go back about 70 years and take a look at the court case that, had it gone otherwise, would have made all the combat we’re seeing today unnecessary. I refer to the great battle between the early big band sheiks and RCA over radio royalty payments for performance artists, eventually resolved—at least at the time—by the great jurist Learned Hand.

Not licensed for radio broadcast

Fred Waring and his Pennsylvanians (source: boomtownwebworks.com)

It was a pleasant spring evening in 1935, and big band leader Fred Waring sat at Lindy’s restaurant in New York City holding court with friends and reporters. Despite the Depression, times were good for Waring and his Pennsylvanians, a meticulous 70 member dance ensemble with chorus. The conductor/arranger reported earnings of about $10,000 a week by 1932, a huge sum of money in those grim days. Waring in turn paid his fortunate musicians union scale wages when many bands could barely afford train fare. “Fred Waring, Inc.,” Time magazine called his operation.

But Waring’s good humor that night ended when a colleague mentioned that he had heard the Pennsylvanians on the radio a few hours back. How could this be? Waring wondered, since his band hadn’t performed on the airwaves at the time described. But the answer was obvious. The station had broadcast a Fred Waring record without his permission and, even worse, without paying him. This practice had irritated the big band leader for years—”a growing menace to all performers,” as he put it. And Waring wasn’t alone in this sentiment. Paul Whiteman, the dean of ballroom jazz maestros, became furious whenever the subject came up—especially since record manufacturers stamped his disks with the label “not licensed for radio broadcast.” It didn’t matter. Radio disk jockeys ignored the warning and played the records anyway.

And so Waring and Whiteman founded the National Association of Performing Artists. As president of NAPA, Waring sought the same benefits that composers enjoyed under the Copyright Act of 1909: the royalties received when a musician performs their copyrighted work. An interpreter of a musical composition, he insisted, creates something just as unique as a composer, and therefore deserves copyright protection as well. “Fans pay thousands of dollars to hear Sinatra sing a number that all soloists are singing”, Waring argued. “—it’s what Frank or Lena Horne add to a song that makes people buy one of their records.”

Paul Whiteman: last guy on the horse (source: wikipedia commons)

No two interpretations were the same; therefore musicians should receive payment for every broadcast, live or prerecorded, as did the composers of specific tunes. Almost 700 royalty hungry performers quickly joined NAPA—especially singers and bandleaders, from the baritone Lawrence Tibbett to Guy Lombardo and his Royal Canadians, a New Years eve fixture at Manhattan’s Waldorf Astoria. The soprano Lily Pons signed on. So did Bing Crosby. They sought to update the nation’s copyright law—inconveniently created before the dawn of radio—to include performers whose records radio stations broadcast over the air waves.

Any record we want

Waring led the charge by filing a lawsuit against radio station WDAS in Philadelphia. Whiteman went after WNEW in New York, home of Martin Block’s enormously popular Make Believe Ballroom and owned by the WBO Broadcasting Corporation. Block broadcast dance records as if they were live performances, “carrying on one sided conversations with the great names on the record labels,” as a listener put it. A WNEW spokesperson made no secret of the station’s practices: “We just go ahead and play any record we feel like using, as we have done for years,” he declared. “We will utilize records constantly as a source of program material, and most artists are glad to have us do so.”

But in the mid-1930s, many artists saw record broadcasting as competition for the live radio performances that they relied on for income. Live music programs, usually broadcast from theaters or hotels, were far more common in the days before television. Both Whiteman and Waring had regular radio shows, Waring’s broadcast over 82 NBC stations and sponsored by Chesterfield cigarettes.

Martin Block of Make Believe Ballroom (source: examiner.com)

These band maestros also worried about their reputations in an era when the arbiters of taste regarded jazz as decadent and vulgar. They jealously monitored where and when the public heard their music. Waring often emphasized “family, country and religion,” during his broadcasts. “[H]is orchestra has always played to the whole crowd, has never gone too hot or too sweet for catholic tastes,” observed one reviewer. Whiteman, who started out as a violist for the Denver and San Francisco Symphonies, championed classical pieces like George Gershwin’s Rhapsody in Blue and Ferde Grofe’s Grand Canyon Suite. He often defended the innovations in jazz as similar to those in the music of Haydn and Beethoven. These performers cultivated reputations as respectable jazz musicians, and worried about the random, unauthorized broadcast of their 78 rpm records.

No legal difference

And so in 1940 members of NAPA cheered when the Pennsylvania Supreme Court found in behalf of the plaintiff in Waring v. Station WDAS. Judge Horace Stern wrote for the court: “There is no moral or legal difference between tapping telephone wires for the purpose of ‘listening in’ than there is in using for broadcasting a phonographic disk made by plaintiff in defiance of the maker’s injunction written across that disk, to wit: ‘Not licensed for radio broadcasting’.” Waring’s copyright privileges had been violated, Stern argued, for precisely the reasons Waring’s lawyers argued. A performer’s unique interpretation of a composition represents a creation novel enough to merit copyright protection: “A musical composition in itself is an incomplete work; it is the performer who must consummate the work by transforming it into sound.” Buoyed by this victory, NAPA artists began pressing Congress for a law granting them the right to royalties.

But not everyone in the music business sympathized with Judge Stern’s position. Aside from radio station owners who obviously did not want to pay for something they now enjoyed gratis, music composers and their publishers worried about this crusade for performers. Although Waring proposed that stations pay a mere 10 cents for each record broadcast, publishers didn’t want to split their royalty profits. They put private pressure on their artists not to support NAPA.

The final legal showdown took place in 1940 when Whiteman’s suit reached the Second Circuit Court of Appeals, presided over by the renowned jurist Learned Hand. In the middle of the case, news broke that Whiteman had not read the fine print of his latest recording contract too carefully. It gave the firm all rights to his music. Although this blunder embarrassed NAPA’s musicians, it appears to have had little influence on Judge Hand’s ruling against Whiteman and RCA, a decision that shaped radio broadcasting for the next seven decades.

Learned Hand (source: Library of Congress)

Copyright, Hand stated in his decision, “consists only in the power to prevent others from reproducing the copyrighted work.” WNEW and the WBO Broadcasting Corporation never violated that principle in the case of Paul Whiteman’s music. They simply bought reproductions of his performances, sold to them by the plaintiff, and put them to the purpose for which they were intended: playing them on record players. WBO did not copy Whiteman’s performances—the action that copyright protection forbids when done without permission of the author or publisher. Whiteman had already performed that task by permitting RCA to record his performance and putting it on a record. He could not sell copies of his work to the public and then accuse the public of unfairly copying him by using the copies.

With a faint tone of condescension, Hand dismissed Stern’s argument that an interpretation of a work had the same originality as a composition. “[P]eople easily distinguish, or think they distinguish, the rendition of the same score or the same text by their favorites, and they will pay large sums to hear them,” he wrote. “Hence this action.” But Hand found this principle too vague to settle the case. Whether a performer or composer, artists enjoy the right—the copyright—to control the reproduction of their work, to sell it as they wish for distribution. But once they have taken that step, their monopoly over the work ends.

“W.B.O. Broadcasting Corporation has never invaded any such right of Whiteman;” Hand ruled, “they have never copied his performances at all; they have merely used those copies which he and the RCA Manufacturing Company, Inc. made and distributed.” And with that Hand dismissed the case.

A secure legal footing

Whiteman and RCA appealed the suit to the United States Supreme Court. On December 16th, 1940, the high court refused to hear the matter. With that refusal, any common-law property rights—rights made by court judges rather than legislature—ended for performers with the sale of their records. “The ruling put the disk-jockey for the first time on a secure legal footing,” concluded broadcasting historian Erik Barnouw.

Ironically, it was the success of WNEW that paved the way for the current relationship between terrestrial radio stations and performers. Block’s program served as filler between live courtroom bulletins from the sensational 1939 Lindbergh kidnapping trial. Freely using records and exploiting his skill as a pitchman, he became a regional hit, selling everything from doughnuts to diet pills for housewives. “Now I’m not saying that your husband doesn’t love you,” Block crooned, “but when you look in the mirror, are you being fair to him?” Pretty cheesy stuff, but soon Make Believe Ballroom had two million listeners a week and twenty-three sponsors, with a waiting list for more.

Anxious to satisfy its advertisers, WNEW went to a 24-hour format, the first radio station in the United States to do so. Milkman’s Matinee became another windfall for WNEW, hosted by Stan “The All Night Record Man” Shaw. Some performers began changing their attitude as a new phenomenon surfaced on the post-Depression broadcasting landscape: the hit record. As Block himself might have put it, the disk jockey went from sued to wooed.

Since then radio has gone through many permutations: most notably Top 40, free form, format, and talk radio. Through all of them, efforts to require terrestrial broadcasters to pay royalties to musicians have been successfully beaten back on Capitol Hill, even as the mandate has been extended to webcasters. We can thank Learned Hand and his steely legal logic for the present standoff. One would guess, however, that Paul Whiteman wasn’t grateful in 1939.

Further reading

“Copyright Law of U.S.; U.S. Code, Title 17, Section 1(d),” cited in Allen Kent and Harold Lancour, Copyright: Current Viewpoints on History, Laws and Legislation (New York: R.R. Bowker, 1972).

“Fred Waring, Inc.,” Time (June 26, 1939), 52.

“Pitchman’s Progress,” Time (December 11, 1939), 62.

Whiteman and RCA vs. WBO Broadcasting, 114 F.2d 86 (2d Cir. 1940).

Erik Barnouw, The Golden Web A History of Broadcasting in the United States (New York: Oxford University Press, 1968)

Thomas A. DeLong, Pops: Paul Whiteman, King of Jazz (New Jersey: New Century Publishers, 1983).

J. Gunnar Erickson, Edward R. Hearn, Mark E. Halloran, Musician’s Guide to Copyright, revised edition, (New York: Charles Scriber’s Sons, 1983), 53-60.

Virginia Waring, Fred Waring and His Pennsylvanians (Urbana: University of Illinois Press, 1997).

Paul Whiteman and Mary Margaret McBride, Jazz (New York: J.H. Sears and Company, 1926).

J.C. Marion, “The Way We Were, Part II, July-Dec 1946,” home.earthlink.net/~jaymar41/late46.html

“The Commission should investigate the actions described in this petition and declare them contrary to the public interest,” the filing says.

Like a lot of people, I’m deadlocked over the PRA, which pits two groups I love against each other —radio stations and musicians. But possible intimidation and/or suppression of artists should be taken seriously, even if the charges come from a biased source.

“We are dropping his record”

Let’s deal with that last reality from the get go. MusicFIRST is backed by SoundExchange and the Recording Industry Association of America. The accuser in the PDR is Jennifer. L. Bendall, MusicFirst’s executive director and a registered lobbyist for Sound Exchange, Viviendi Universal, Metropolitan Life, and eBay. And the attorney filing with the FCC is none other than Sam Feder, until recently the agency’s general counsel.

Still, some of the group’s accusations seem worth at least a worried glance or two. No names are named in the statement, but Bendall charges that a “top-selling artist” who came out for the PRA has been told by a “major radio broadcast group” that it won’t play his single any longer. “We are dropping his record,” an e-mail sent by the stations says, she reports. Associated Press thinks the alleged victim might be Bono.

“Another artist was listed on the MusicFIRST website as a supporter of the PRA,” the filing continues. “A representative of the artist’s label informed us that the program direction of a radio station in Florida told the artist’s label that the station would not play the recordings of that artist.”

Another station program director warned a label and two musician reps that their support of the proposed bill would create a “chilling effect” between them and the station, MusicFIRST charges. In addition, “a representative of a record label told us that a Delaware radio station informed them that it boycotted all artists affiliated with the MusicFIRST coalition for an entire month,” the statement says.

And:”A representative of an artist told us that immediately before going on the air for an interview, the artist was pressured by a Texas radio station to state on the air that the performance rights bill would cripple radio stations.”

Plus MusicFIRST says just about every radio station they’ve contacted has declined to run the group’s ads. “As of today [June 9, 2009], “not a single station has accepted a single spot from MusicFIRST.”

Boom boom pow

So what do the stations say to this? The National Association of Broadcasters quickly put out a statement in response to the “stunt,” as they called it. The reply notes that outspoken PRA supporter Will.i.am of the Black Eyed Peas still gets tons of airplay. As of June 10, the Peas’ single “Boom Boom Pow” was the most frequently broadcast song on commercial radio, NAB points out.

“This allegation is nothing more than an act of desperation by a record label lobby losing on Capitol Hill and in the court of public opinion,” declared NAB Executive Vice President Dennis Wharton.

That’s it? That’s NAB’s response? What’s disturbing here is that NAB doesn’t even say that MusicFIRST’s allegations are false. Sure, the outfit is backed by RIAA (as if NAB never engaged in this sort of tactic; anybody remember the broadcaster supported, anti-Sirius XM merger Consumer Coalition for Competition in Satellite Radio?). But NAB’s reply is long on bluster, short on specifics, suggesting that there’s really something to worry about here.

MusicFIRST also charges that much of what NAB stations are putting out about this issue is misleading or false, and there’s something to that, too. Anti-PRA radio spots keep calling it a “performance tax”—even though the royalty payments will go to musicians, not the government. Some broadcasters say that PRA legislative hearings had no “black ownership representation” (they did; black radio exec Charles Warfield appeared at one; and, by the way, the bill’s principal sponsor in the House, John Conyers [D-MI], is black).

Plus many of the artist companies are “foreign,” radio station propaganda insists, ignoring the fact that most of the performers who would collect royalties are Americans.

“Petitioner does not deny that broadcasters have the right to oppose the PRA,” MusicFIRST says. “However, broadcasters also have the duty to act in the public interest and not narrowly in their own self-interest by using their licensed spectrum to manipulate information about public matters that directly affect their business. Some broadcasters here have crossed the line and violated this duty.”

Look at the record

What does MusicFIRST think the FCC should do about this? The filings’ growl is much bigger than its chomp. From the outset, the outfit wisely insists it that doesn’t want the Fairness Doctrine back (that’s the long abandoned rule that required stations to offer access to contrasting points of view over the airwaves).

So MusicFIRST asks for an investigation of the situation, to determine whether the broadcasters have violated the public interest or have engaged in “anti-competitive” behavior. Fine, but what should the FCC do if it finds wrongdoing?

The petition invokes acting FCC Chair Michael Copps’ lamentations regarding the agency’s license renewal system —often called “postcard” renewal by its critics. “The FCC needs to reinvigorate the license-renewal process,” Copps recently said. “We need to look at a station’s record every three or four years . . . And we should be actually looking at this record.”

Ok, but if the FCC were to actually investigate the record presented by MusicFIRST, what rules would it enforce? In truth, at this point the commercial radio band is so deregulated that there really are very few—game contest rules, station log requirements, not a lot else. And so we may be at a place where broadcasters can use the airwaves to dishonestly promote their economic self-interest, and do so with impunity. A new proceeding may be warranted here to reinvigorate the Commission’s regulations in this area.