Transcripts For CSPAN Key Capitol Hill Hearings 20240622 : v

CSPAN Key Capitol Hill Hearings June 22, 2024

Ondemand radio, think about a jukebox. Put that on the internet. You can specify which song up to the hear. You can specify to shuffle on the Internet Radio stream. So you go to spotify. You want to hear a mix of songs that you like, and you know, but you also say mix it up a little bit, some of it is on demand some of it is prepackaged, but you can also take it from your collection. Think about on an ondemand jukebox or some mix of that, and thats the on demand radio. Your next traditional model that has essentially morphed to the internet morphed toance and digital, is buying music. Some of are you old enough to remember record stores, you know, tower, sam goody. No, ok. They also used to sell other things paraphernalia your parents didnt want you to have, at least in my town. So think about just purchase music. 8. 99 an album, thats at the far end of the spectrum. And once you own that music, today you can generally import it to whatever device you want. It comes in primarily mp3 format, although if youre neil young, youre purchasing the new player. The branding is interesting. He wants to do higher bit rate streams, Higher Quality streams, and hes pulled his music down from all the services that young people listen to, so hes clearly defined his audience as my parent. And im a neil young fan. I love neil young. But he put his music out on eighttracks, so whats the big deal about a lower bit rate stream . The most interesting Business Model forance and Digital Music is conditional downloads or subscription services, that let do you a whole variety of things. Youre paying 10 a month, 8 a month, 13 a month, to spotify, the new apple music, im trying to remember other services, rhapsody whats that . Title, another one where the star thinks its going to make the difference. Those are services that let you do almost everything, right . You can stream prepackaged stations. You can stream music you already purchased. You can download conditionally. Think about a temporary download. As long as you pay your 9. 99 a month, you can listen to that music and port it to your device and take it wherever you want. You can probably even port it to your hard drive and your car. Cars have hard drives. They are all out there. Some of them are free. Some of them are fremium models, and then they try to upsell to you a subscription price, and some of them are subscriptions, and they all mix and match in between. So pandora for free is advertising supported. Pandora as a subscription is ad free. But theyre both Internet Radio. Theyre both noninteractive Internet Radio, which means they fall under the statutory license that some other folks will talk about. Thats really some subscriptions offer family plans, right . I will tell you, true story, ted cohen will tell you this story. He was at a record company. They were licensing an early internet music company. The Business Development person came in and said we want to license this service so that two people can listen to the music at the same time. And the record industry executive said we cant do that we have to charge them double. And the Business Development person came back and said, you know what, i think we can let two people in, because if not, one person will listen and the other person will steal it, so lets give them a break, and now you have the apple family plan and other businesses are doing family plans, and, of course, just on your capable subscription you can watch on four tvs at once, the record industry over the last 20 years has recognized that we want to make this attractive, and the record industry has come a long way, and theres a licensed all these services are legal. Theyre all licensed. None of them have anything to do with piracy. And you can argue they all substitute for piracy, which is a great thing. And they put billions of dollars every year into artists and songwriters and labels and publishers, and substitute for the fact that Tower Records doesnt exist anymore. So thank you. Tim that was great. The 1995 act was for sound recordings. Again, what you catch on tape, what you store in mp3, the sound r0rding of it. Theres other rights, though, that are what makes this more complicated. Were going to layer that on now. Al sect probably the best person to talk about, from his perspective, those other types of rights and how they kind of influence the conversations that you hear in the news and on tv and in the industry. So alec, if you can explain the next layer of complexity. Alec sure. Also to want thank tim and the internet caucus for having me here. Im going start with a little prop see if this sounds any good. Because you know im all about the bass no treble im all about the bass alec everyone has heard that song, i assume. Does anyone know who the band is . Throw out a name. Meghan trainor. Does anyone who know wrote that song . So this is the this is the core issue. Actually actually, there are two copyrights in every piece of music that you hear. Theres a copyright in the sound recording that Meghan Trainor made, the fact thats her voice, everything you hear, theres a copyright in that sound recording. But theres also a copyright in whats called the musical composition. Someone sat down, ill tell you who, and actually wrote the lirtoiks that song and music the musical notes that would be played by the different instruments. So you have a Music Composition and a sound recording in r song you hear. Actually for that song Meghan Trainor was one of the writers, and another guy named kevin is the cowriter. So you have some guy youve never heard of who is the writer of the piece of music that then was recorded. Kevin, you probably wouldnt want to go see him in concert because you dont know him. You probably are not going to buy tshirts with his face on it because you dont know him. Hes a writer. Thats his job. Thats what he does. And its a completely different copyright in a completely different business than the sound recording business. Im going to talk about the songwriter, because thats who i represent through ascap and julia is going to handle the sound recording side. You have two copyrights. Now, when you have a copyright, the copyright gives you the exclusive right, meaning youre the person who has the right to do certain things. For music, the ones that are important are, you have the exclusive right to reproduce, to make copies of your copyrighted work. You have the exclusive right to publicly perform your musical composition, and third right is to distribute it. There are two other rights, dont really implicate music, so we wont talk about them. Well, to get to kind of the core of what this panel is about, you as a songwriter have these exclusive rights. You dont actually have the right to go out and exercise those rights in the free market in most cases. In your cases, your ability to license the rights to others who want to have them is regulated in one way or another. And to give you a quickover view of what that is, when someone wants to publicly perform your music as a songwriter, and this is you know thst tim talked about the 1995 act, that actually only applies to sound recording. Songwriters have had a right to perform their work since the first copyright act was created in 1789. When you want to publicly perform a songwriters work, whether its a Radio Station, so a Radio Station want to do it, a war, a restaurant, a concert venue Pandora Spotify , cable television, broadcast television, when any of those Services Want to perform music, theyve got to get the rights from the songwriter. Imagine how complicated it would be if a Radio Station had to go out and find and then negotiate with the songwriters of all the music that you hear on a Radio Station. Well, pop 40, maybe its only 40 songs, but pandora, its millions, millions of songwriters. That just isnt an efficient you couldnt have that kind of negotiation with all the songwriters that are out there. What are names of people you never heard of . For example, who was Meghan Trainors songwriter . Ive already forgotten. So you have this market frob a licensee side, from folks who want to publicly perform music, they wouldnt be able to find all the songwriters and actually have a negotiation with all of them over the rights. From the songwriters song, if youre writing all about the bass, do you want to drive around the country and knock on the door of every bar and restaurant and concert vensandue sit down with pandora and try to cut a deal with them . Thats crazy. Thats just youre going to be spending all of your time on the business side and none of your time on the creative side. So how the market has kind of fixed this, and this has been going on since 1914, is what sprung up called p. R. O. s, Performance Rights organizations. Ascap is the oldest of them. It started in 1914. Its been around over 100 years. Ascap has 500plus, about 550,000 songwriters that have chosen to be members of ascap and have given ascap the right to license Public Performances. So ascap now has 550,000 members, songwriter members, a repertory of over nine million songs, and ascap goes out and licenses all the entities that want to publicly perform that music, and then takes in royalties from all the entities. We have over 700,000 licensees across america. Takes in the royalties tries to figure out whose music was played, how much, and then distributes that money to the songwriters. So that Business Model thats come around since 1914 is kind of an efficient way to make sure licensees and songwriters can meet and license the music. But in 1941 the Justice Department decided the two big theres a competitor to ascap called b. M. I. , decided to subject them to an antitrust Consent Decree because of the market share theyve had. Since 1971 almost 75 years, you had the government as the backstop here, kind of setting the rules for how songwriters music is licensed through Public Performance. And i wont get into too much detail, but thats one way the government now regulates this marketplace. It says the government is going to control how rates are set, and functionally at the end, how much is actually paid by licensees to songwriters for performance of their music. Thats the performance side, and thats the Regulatory Regime that applies there. Jonathan mentioned downloads you know itunes, and actually spotify, up may not know it also involves copying. You have to have a separate copy that you send a stream from. That world of how do songwriters license reproductions, copies of their music to folks like apple or on c. D. s and elsewhere, people who want to make copies, that is a completely different Regulatory Regime that congress has control over because every reproduction is subject to a cat story license. Congress in 1909 going way, way back, actually said, if someone wants to make a copy of a musical composition that a songwriter created, theyre going to have a right to do so. They dont have to negotiate it with the song writer in the free market. You dont actually have to sit down with them. Congress is going to create in this case theres a threejudge panel in the library of congress, three Administrative Law judges who determine the rate that a songwriter will be paid each time their music is copied. You know, the rate today is 9. 1 cents. In 1909, it was two cents. So its gone up a little. But thats how copies are regulated. The third and last is theres actually one area of the marketplace where songwriters rights is regulated by the free market. Every time a Television Studio takes music and wants to incorporate it into a movie or a tv show, they actual have the to get the rights from the writer. Theyre actually making a copy of that musical composition to include, along with the sound recording in a movie or tv show. Background music theme song, etc. That negotiation between the producer of the tv or movie and the songwriter is a free market negotiation. You know theyve get the rights and they have to if a songwriter doesnt like what theyre being offered, Capital Cities safe and sound, they dont like the price theyre being offered, they can say no. Excuse me, the songwriter, Capital Cities is the band so. Those are the three big baskets and the ways functionally that songwriters licensing of their invites regulated. Tim weve only scratched the surface. Alec just went over the composers rights, and weve talked about having part of that system be governed by d. O. J. Consent decree. Another portion of that, the copy portion being controlled by a threejudge panel somewhere the copyright review board. Those are the other rights. Lets get back a little bit to what congress did in 1995, which was the Digital Performance right for sound recordings. That really kind of says a lot to explain the services you listen to on your phone. To help us kind of understand that and over the past 20 years, how the marketplace has grown and what has enabled that to grow, because alec kind of said his organization, like ascap and b. M. I. , have really enabled songwriters to get compensated with and focus on the creative and not the business side. The marketplace for the Performance Rights that congress made in 1995, julia can explain more about how that has evolved and the role her company plays in that. Julia ok. Its funny, so i thought i would have to lay agrot of ground work here, but you guys have laid a lot of the ground work for me alec talked about the two copyrights in every recording that you hear. Theres the composition, the notes and lyrics, and the sound recording. The sound recording is that artist, that recording artists interpretation of that composition. And then fixed permanently somehow to be a recording. So before 1995 and 1998, before the performance right was created in those two laws, there was no performance right for sound recordings under federal law. But suddenly in 1998 there was, and there was no one to collect royalties for that performance right. And so as services developed, and as the need to pay royalties developed, the industry collectively created an entity to collect royalties, and that was sound exchange. So initially it was kind of this in the corner of an office a group of people trying to figure out, how are we going to do this . As alex was saying, if you have to go to every person who makes a recording and every copyright sandorn figure that out, that is very time consuming and complicated, and we probably wouldnt have many of the services we have today if that was the way things had to work. So sound exchange was born, and in 2003, became an independent nonprofit collective that represents the entire Recording Industry. So signed artists, mega stars, local bands, major labels, indie labels we represent all artists, recording artists, and copyright owners which is normally a record label, but it can often also be the artist who decides to record for themselves and owns their own master recordings. I should also tell you our board reflects we represent the entire industry. Our board is half representatives of record labels, indie labels, major labels, and their trade associations and half artists and their representatives, and artist managers and artist unions. And every dollar of royalty Social Security paid through sound exchange is split 5050 between the copyright owners, usually the record label and the artists. And that is something that is unique, and it is a reason that a reason that artists love sound exchange. It is a reason that people often point to sound exchange as kind of the bright spot for transparency in the Recording Industry which is a big issue that a lot of people are talking about right now. The other things we do besides distributing royalties, we represent everyone at the copyright royalty board, which is the entity over at the line rather of congress that alec mentioned earlier that sets the rates for all of these royalties. We also advocate on behalf of the industry up here and where else to try to protect those rates and to support fair pay for artists and copyright owners so. Thats the really easy view of what sound exchange does. I have a more complicated view if you want notice get into that. Tim no, not yet, not yet. I guess basic what will youre saying is that you know, whether its alecs organization or your organization, the very highest level and the goal is to make sure that artists creative people could get compensated quickly, services could get access to music in the most efficient way possible, to get it out to people so they can listen to it in a variety of different ways. Julia let me fwalk that for just a second. Kind of the mouthful i like say of what sound exchange does is the nonprofit collective designated by the board to collect and distribute royalties paid for the Public Performance of sound recordings via noninteractive Digital Audio transmissions to u. S. Listeners pursuant to the statutory licenses that congress created in section 112 and 114 of the copyright act. Most of the first part of that sentence you guys understand because the terms have been defined by everybody else on the panel so far. You understand what Public Performance is what a sound recording is, sort of what noninteractive is. You understand that its audio, not audio visual, so its not youtube. Its only this part. And that its digital. Its not terrestrial, which i know were not going to get into this, but thats the fact that terrestrial radio does not pay artists any royalty and never has is a big inequity in the industry. Tim you mean a. M. f. M. O. Your old car radio, youre saying that whoever broadcasts that does not pay the artists but they do if i had a new car

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