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Music Industry Wants to Cut Artist Royalties

Frank Ahrens

UPDATED: See below.

So, let's get this straight: My buddy Brooks Boliek at the Hollywood Reporter writes that the Recording Industry Association of America (RIAA) -- the music industry's lobby and cop, responsible for suing music pirates, including the occasional 12-year-old -- now wants the federal government to slash how much money musicians get when their songs are played.


The RIAA has asked the fedgov's Copyright Royalty Judges to lower the rate, which hasn't been changed since 1981.

I'm not quite sure I understand the RIAA's argument, which seems to have something to do with selling ringtones, but I do know that, from a public-relations standpoint, the request to lower songwriters' royalties is tone deaf.

Over the past several years, the RIAA has preached that music pirates don't hurt the big, bad music labels, they actually hurt the musician whose music is being stolen. If the music is stolen instead of purchased, the musicians and songwriters don't get paid.

Now, the RIAA want to take money out of the pockets of musicians and songwriters?


UPDATE: So, helpful p.r. guy Jonathan Lamy at the RIAA, I am happy to find out, is a reader of this blog.

He, however, was unhappy to read this posting and said I hadn't represented the RIAA's side. So he sent along a release explaining the RIAA's argument on wanting to cut royalties to songwriters.

It goes like this: The RIAA's clients -- the big music labels -- have been seriously hurt by piracy over the past few years. Because the record labels spend a great deal of money on artist recruitment and development, declining music sales have hurt their ability to do so.

However, music publishers make no such expenditures for artist development and marketing. Consequently, publishers have watched their royalty revenue go up 54 percent as labels have watched theirs go down 13 percent from 1998 to through last year.

The RIAA's proposal to reduce royalties seeks to correct this imbalance, the RIAA says.

Post I.T. : Fair and balanced. Eventually.

Today In The Post:

* Mike Musgrove and a bud test-drive Gears of War, the latest action game from Microsoft's XBox 360.


* More wormy dangers on the Internet: A QuickTime movie making the rounds last week on MySpace embeds itself on the user's MySpace page when played and redirects traffic to phishing sites, that attempt to steal personal information.

* Here's a chilling Google Earth image showing the path of James Kim, the CNet editor who died in the Northwest wilderness, trying to save his family. Here's a tribute page to Kim on CNet.

By Frank Ahrens  |  December 7, 2006; 11:22 AM ET  | Category:  Frank Ahrens
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Mr. Ahrens,

I'm the President of the first music web site ever launched on the planet back in 1994..

Why are you focusing on the RIAA's desire cut royalties when you NEVER mention the performing rights agencies ASCAP, BMI, et al's failure to pay the performance royalties in the first place?

The performing rights agencies refuse to guarantee payment from performances on radio or the Internet. If we can't get paid as legislation required, why worry over the rate the RIAA wants to cut?

In reality, only the top name writers for artists like "Michael Jackson" or "Elton John" get paid - independent writers, or writers scoring regional hits (a fading occurrance with the consolidation of corporate media) do not get paid. EVER. Further - the performance rights agencies refuse to recognize that most musicians are both the performer and the writer today... (The exceptions being in Jazz, and Pop-Country) and that writer/performers selecting to freely distribute their works online actually build listenership and CD sales for themselves. The majority of music releases are not done ala "Tin Pan Alley" anymore where a writer, a lyricist, and an arranger work together and then hire a pianist to perform it. Modern musicians do it all - composing, writing, arranging, and performing... this isn't reflected in the policies and actions of the performing rights associations who are as a result, in practice, the real enemy of the independent, the unsigned, and the working musician.

I once had a highly placed BMI executive ask me "do you think writers want a $5 check? My answer was: "pay me my money down" He didn't understand either the musical reference, or the point that legislation is to be followed to the letter of the law.

In fact the ONLY time a writer is guaranteed payment by ASCAP or BMI is when a television boradcase "Que Sheet" is available. due to union negotiating, Que Sheets serve as written proof that a performance of a particular piece occurred on television and payment will be made upon presentation of the que sheet to the agencies. At Virtual Radio we invented the concept and technology for "Electronic Que Sheets" based upon current, nearly free email technology in use at every broadcaster on earth today. But the performance rights organizations refused to honor these provable performances over the Internet. Instead they offered a promise of future royalties being determined by subsonic signatures on each song, picked up and recorded by sattelites, to guarantee accuracy.

Talk about a $100,000,000 hammer...

Thanks for pointing out that the RIAA is a racket potentially worthy of RICO prosecuton... but please, in the future, shed a little light on non-payment of royalties earned by the roaches scurrying about in the performance rights organizations.

Posted by: Long Beach, CA | December 7, 2006 1:47 PM

Long Beach, you wrote much more than what I could have said about royalty payments, but I was thinking along similar lines. I wish musicians would stand up to the entire recording industry, but they are indentured servants who don't have much choice in the matter. Sad. No wonder corporate radio is such crap today.

Posted by: Elvis | December 7, 2006 4:27 PM

I produce films and online content for a very large organization and I am curious as to why we have not received notification that the talent rates would be reduced. The RICO joke may not be a joke with the current political changes and the agressive prosecutorial approach that has been embraced by the industry. Mr. Ahrens I actually have followed your work and cited you in some of my research. Can you tell me if you will be following up on this story on ASAP and the other industry groups that all seem to be charging us more to use the music for our films? The money has to be going somewhere? Especially since the argument against piracy was that this was about artists being ripped off by people. Thanks!

Posted by: Confused in Washington | December 7, 2006 4:58 PM

Arrr, the pirates be stealin' their loot. I am dubious. The labels love to blame "pirates" for poor business decisions. These wimps claim that the 12 year olds they are suing are destroying their business. Have they taken a good look at their product? The music industry has changed greatly in the last few years. Most musicians do not need labels. You can record a whole album on a laptop and post it on myspace. Unless you want access to the vertically integrated entertainment conglomerate of radio, media outlets, clubs, record labels, distributors, etc.

But small labels can get their stuff on itunes, get reviewed on Pitchfork media, and have a hit on their hands. Labels are a dying business model. Professional producers, recording studios, and professional unionized recording engineers are great, but they are a dying breed. Competition from a million sources has made their business model outmoded. The musical proletariat now has access to the means of production, the barriers to entry in the marketplace have lowered--however you want to put it, any fool with a laptop can churn out beats and distribute them worldwide within minutes.

I ask you to compare Fugazi--essentially self released music that has sold millions of copies, with K-fed, who sold a few thousand with a giant marketing push behind him. OK, maybe K-fed was a marketing miscalculation, but the industry makes acts homogenous, which many consumers are fed up with. Labels employ stylists to make sure that the dorky bass player gets some tattoos and works on his look so that he looks like the other bands out there. The producer makes sure the band sounds like all the other bands out there. The mastering engineer makes sure the record is louder than all the other records out there (i.e. the volume wars) and quashes the dynamics of the performances. It's musical Velveeta, and educated consumers want something a bit less processed and predictable.

Posted by: Mr. Pants | December 7, 2006 6:12 PM

And people wonder why their is no respect for the music industry. They just keep ripping people off.

Posted by: Neil Wedd | December 8, 2006 2:20 AM

The RIAA has never been interested in the artist except to use them as a shield to deflect criticism. They have robbed the artists of millions (billions?) over the decades, and then they start suing the fans for $750 - $3000 for each "stolen" $1 download?? The truly sad thing that a great many of the public and (even worse) the legislators seem to buy their line of crap.

Posted by: Brent | December 8, 2006 10:31 AM

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