Transcripts For CSPAN2 Key Capitol Hill Hearings 20151116 :

Do it on pcs, you can download individual tracks, individual albums. The variety of ways that people can acquire music today is astounding and inconceivable 20 years ago. Host that transition from what we knew but ten years ago to what we know today, what has that done to the guest we find that theres a new transition coming along the way, which is whats making it so challenging. But also it makes it interesting and the opportunities are so great because youre finding new audiences and new ways of delivering the music, around itses are finding new ways to connect with fans. Host we want to bring alex byers of politico into this conversation as well. Sure. Carrie, its 2015 cary, its 2015, its never been easier to use spotify or a platform like that. Do we still need record labels at this point . Will we in ten years as technology continues to develop . Guest you know, when the internet first started becoming the new development, people thought that the era of labels might be over. Why would you need them when, in fact, artists can go directly to their fans . I think the conclusion now is that labels are more important than ever because everybody who wants to be an artist has the opportunity to be online and put their work out there and try to find an audience. As a result, theres more clutter than ever. Sure. Guest you need somebody whos going to be a pacemaker, whos going to put their financial and Human Resources behind a particular artist saying this person is worth hearing. So i think labels are actually more important than ever, and theyve been playing a significant role in the development of an artists career. Sure. Guest the fact that you still have have an opportunity for artists to do it themselves is great for their career. Many artists like getting into the business and getting into the fan relationships and management and touring and so on and so forth, but there are other artists who want to just focus on perfectfecting their craft and making music, and for them having the services of a label makes all the difference. Sure. F you talked about the roles on capitol hill, certainly, the music marketing place has been a topic of big discussion especially at the house judiciary committee. At the same time, we know that its really tough for congress to do pretty much anything not to mention something as complicated as music licensing. Do you really think were going to see some legislation to change some of the things that youd like to change . That seems like a tall order just looking at the the political atmosphere right now. Guest i think it is a tall order. Chairman goodlatte has basically approached this issue in a very systematic way, attempting to gather a lot of information. He has made clear that the industry itself has to try and develop consensus about how music licensing can be reformed. And, lets face it, the Digital Music services need to be part of any consensus as well. That is a very tall order, and its going to be very hard to do. But that doesnt mean sure. Host well, cary scherr sherman, who are the players over how we get our music and who pays for it . Guest okay. Well, we represent labels, and we are the Business Partners of the artists. We create what are technically called sound recordings, and its basically when you make a copy of the words and music to a song. Then there are the song writers and publishers. They write the words and music. So they have their own separate copyright and entirely separate be licensing mechanisms and licensing organizations. So it becomes quite complicated because youre having to license two creative works for one use by a streaming service or a Download Service, so on and so forth. Then you have the licensing entities themselves, ascap and bmi, for example, represent the song writers and publishers, but they have their own views about what the best form of licensing is. Then you have the Digital Music services, and the Digital Music services are in very different positions because they often operate under different regulatory regimes. Pandora, for example, is an, a non interactive Radio Service which means it gets the benefit of a government compulsory license. We are required to make all of our music available to pandora as long as they pay a royalty rate thats set by the government. Then you have satellite radio. They also get the benefit of government compulsory license except they operate under a different rate standard than pandora does. Then you have spotify or apple music or audio and others, rhapsody. They operate this in the marketplace where their services are on demand. Theyre called an Interactive Music Service so that you can pick what song you want to hear right now, and it will play that song or that album. But they have to negotiate in the marketplace with Record Companies. So its an entirely different licensing mechanism. And then when you get over onto the publishing side, it gets even more complicated. I wont bother getting into all that now. It just goes to show we have a hybrid licensing system where if you are in your car listening to music, if you listen to it over am fm radio, the artist would not get a cent. If you connect your cell phone to your car stereo and its on pandora, theyll get one rate. If you connect it and it comes over spotify, they will get a higher rate. If it i mean, its crazy. Its a broken system. Be and its way too complicated for a world in which people need to license 20 million tracks at a time instead of one song or one album at a time. And thats why its the so difficult for this transition to take place. Host so if you got to decide how this changed, how would it change . What change would you like to see . Guest well, we would need a lot of changes, is the problem, and there are a lot of players involved. First off, we would want to be paid by am fm radio. I think its remarkable, most people are shocked to learn that in todays day and age am fm radio pays nothing to artists and record labels when they broadcast their music. They do pay the song writers and publishers, but they do not pay artists and labels. So this is a 16 billion industry where theyre earning 16 billion in advertising revenues every year from be, basically, the use of music, and they pay nothing for it. Theres no other copyrighted work that is discriminated against that way, and there are virtually no other developed countries in the world that discriminate recordings that way. Yet special exemptions in u. S. Law, unique u. S. Situation. Wed want to fix that. Wed want to fix the below market rate standard that siriusxm enjoys. For some reason they were grandfathered at a time when they were a startup. That grandfather still exists even though theyre making money hand over fist. They ought to be sharing their revenues more fairly with the people who create the music on which their service is based. That needs to be fixed as well. We really need to do something about making sure that all creators are paid fair market value regardless of the platform that theyre on, and that is not the Current Situation right now. We also need to revise the, its called mechanic alliancing system. Its an odd term, but its the royalty thats paid for the reproduction and distribution of a copy of a recording. So when a Record Company licenses a song for a cd, it gets a mechanic alliance. Well mechanical license. Well, the law for that was written in 1909. So you have to send a certified letter by mail one song at a time asking, you know, saying im going to take advantage of this license. When youre licensing 30 million tracks at a time, youre not sending out certifies letters one song at a time. And be by the way, there are multiple songwriters and multiple Music Publishers for every one song. We need a blanket licensing system where you file one piece of paper, and youve got a license, and then you handle the distribution of money be afterwards. Those are just some of the things we need to do, and all of them are challenging. Ive heard you talk a hot about regulatory parity at zero, siriusxm and, obviously, pandora, and what ive heard recently before we get to the Interactive Services, would you want to see some type of equilibrium between what the noninteractive and the interactive guys have to do, or should they stay outside the compulsory system . Guest well, we dont believe in compulsory licenses as a matter of principle. A as a matter of practical reality, the law is not going to change. We understand that there are efficiencies to having a compulsory license, so were not asking to change that. Got it. Guest it is a little odd that we have a compulsory license for music. These are not nuclear warheads. Correct. Guest but we understand that thats going to continue. But certainly, we dont want the compulsory license extended beyond that which already exists. The marketplace deals work a lot better for the industry. The rates that we get from spotify or for apple music for their on demand services are much, much greater and much more beneficial for the industry than the rates we get for pandora. Right. Its also my understanding, i dont have the exact figures here, but that a lot of the labels have a stake in some of the interactive platforms like spotify. That makes some of the governance here and whos paying whom even more complicated than it already is. How does that factor in u its kind of like a platform that has a label investment being paid by a label, help us sort that out a little bit. Guest well, that issues a little complicated because, first of all, there are lots of deals where the Digital Music service wants the licensor to take an equity stake because they want them to have a stake in the success of the service. Sure, right. Guest so it is a good thing for them to do. Most of those equity stakes never pay a nickel because the service goes out of business and is unsuccessful. Every once in a while there can be a success. But the terms under which you might take equity sometimes youre actually making a dollar investment in the company, sometimes its just something they want to throw in. They vary quite widely. But it does make for much more interesting marketplace deals because you have the opportunity to work out deals in very flexible ways unlike under the compulsory license where its sort of a onesizefitsall approach, be theres one rate for pandora and for siriusxm and so on. Everybody pays the same thing, and you dont have the opportunity to sit down and figure out how to make the Service Function better, be more appealing to consumers so that its a win win for everybody. Sure. Lets pivot, if we could, to the crb, thats the copyright royalty board which you mentioned before which sets those compulsory licensing rates. Were coming up on the end of the year where the crb is expected to set the next rates that pandora and sirius siriusxl pay for the next five years. Give me a little bit of finish show me your crystal ball a little bit, if you would. What are we going to see out of the crb, and what are the potential consequences of whether they sort of i think you guys have suggested that the rate be around 25 p cents per 100 streams whereas pandora and the like have suggested it be around 11 cents per hundred streams. Guest well, and i heart radio suggested about five thousandths of a the reality is we think the proposals that were made by the Digital Music services were unfairly low. As it is, youre hearing artists and labels complaining about the fact that they cant build a Sustainable Business at the royalty rates that were currently collecting from streaming services. Not all streaming services are the same, and thats the problem that were facing. Right. Guest in terms of the crystal ball, one thing ive learned is not to use one. Sure. Guest you cannot predict whats going to happen. But, you know, were hoping that the royalty rates that we get from pandora will go up. They are a huge service. They are now in the marketplace, they are a public company. Theyre beginning to try and monetize, which is not something they were doing before. Because before they were focused on their ip work, you know . They ipo, you know, they just wanted more and more listeners. Now they have to tile try to monetize the music service, and we hope they will be successful at it. Sure. And i wanted to follow up there because when we were talking about the Interactive Services, your point was the labels want to see these services succeed guest absolutely. Because this is how music is going to be disseminated in the future. Is there sort of a be careful what you wish for to the extent, well, if we jack up pandoras rates, they arent going to be as fruitful in innovating or doing things that will ultimately be good for our members and their artists in the future . How do you find that balance . Guest well, one of the complications of this issue is something we call convergence. When the compulsory license was created back in 1995 and then again in 1998, it was a pretty clear model. You had a Radio Service where its like radio where they just broadcast music to you, and be be and then there was the Interactive Services that could be on demand and you could pick what you wanted to hear. But then they started to converge. Pandora offered not just a Radio Service, but rather, you customize your radio station. Whatever you want to hear it almost sounds interactive to people. Guest it almost does, doesnt it . Sure. Guest and the other thing was what they basically did wuss, oh, i like eric clapton, you would get all this music that was satisfying your music tastes. And it became sort of a playlist. And then the on demand Services Like spotify realized, well, people dont want to just do on demand, they want playlists too, so they started offering playlists too. What youd had was a convergence where pandora has moved from a pureed owe model to a very, very highly customized service. They dont recognize that for pandora and spotify there are two different models, but for spotify youve got to pay more than you do for pandora. As a result, theres a lot of confusion in the marketplace, and the fact that theres been such convergence, it makes us very wary of having pandora not be able to innovate because the fact is that theyre innovating into the interactive market and decreasing the benefit of the market for a spotify, apple, rhapsody and the like. Host well, cary sherman, is it fair to say the Music Industry was slow to recognize the technological changes that were making music delivery different . Guest well, thats criticism that is actually leveled at us. That is often leveled at us. If you actually look into what was required to make this happen, youd be more sympathetic to the plight of companies. This happened all very, very quickly. You know, we were the canary in the coal mine. We had very, very small files that could be traded online way before movies and books and everything else. So it did catch us by surprise. We also thought that people would want only high quality music. I mean, people spend months in the tuesday in the studio perfecting every sound. Who would want to hear an mp3 file in a tin earphone . Turns out people did. And then, actually, the companies experimented with full album deliveries, they did a project with ibm for full album downloads. They organized their own joint ventures to create Distribution Systems and so on, but the fact is Record Companies should stick to making music, not technology. And apple came in and showed how it could be done, and it was done well. And apple created the path for a Download Service that actually worked and that worked for everybody. That had the benefit of being the old model. It was just instead of selling a physical cd, you were selling a file, but it was the same royalty rates, the contracts applied relatively easily. Its the transition to streaming that has been really complicated because its a combination of different rights, its something that wasnt really covered before. Its been much more difficult to transition to streaming than it was to downloads, yet that is happening now. The industry has learned you cannot change what Consumers Want. If Consumers Want streams, thats what theyre going to get. And they have voted that they want streams. Streaming has increased 23 just this year over last year. Just, you know, five years ago it was in the single digits. It is now about 32 president of our rev 32 of our revenues and continuing to incline. So we have got to transition to streaming. But we need to get into the streaming services where the revenues are significant. We do very well from spotify be, but we do very poorly from youtube and from pandora. Because they pay royalty rates that are a fraction of what were getting from spotify and apple music and so on and so forth. The more that we can shift users into subscription services, the more remunerative streaming will be, and songwriters, labels, publishers will be able to make a living with streaming. But if were stuck in a world of the statutory license under pandora and youtube has a slightly different situation, let me give you an example. This is an amazing fact. Youtube serves up billions, billions of streams of music every year. With those billions of streams, they are paying us less than we earn from the sale of vinyl records. They are the largest ondemand streaming service in the world, and certainly in the u. S. Theyre serving 100 million people. We earn less from youtube and the other ondemand, adsupported services than we do from the sale of vinyl records. Somethings wrong here. Thats our problem. I want to bounce back to the congressional angle. You said that its a tall order, the copyrighting reform effort, but its not worth trying. I think a lot of people guest it is worth trying. Sorry. Excuse me be, it is worth trying. What if it doesnt pan out . Or what if, like, the copyright act of 1976, it takes 20 years to get to fruition . What to you do then . Are there some types of private agreements that can be struck to move the ball in the interim . I know weve seen some of those in the antipiracy context. But, again, if we cant get that over the finish line, what does the raa and its membership do . Guest ing we cobble together Human Resources<\/a> behind a particular artist saying this person is worth hearing. So i think labels are actually more important than ever, and theyve been playing a significant role in the development of an artists career. Sure. Guest the fact that you still have have an opportunity for artists to do it themselves is great for their career. Many artists like getting into the business and getting into the fan relationships and management and touring and so on and so forth, but there are other artists who want to just focus on perfectfecting their craft and making music, and for them having the services of a label makes all the difference. Sure. F you talked about the roles on capitol hill, certainly, the music marketing place has been a topic of big discussion especially at the house judiciary committee. At the same time, we know that its really tough for congress to do pretty much anything not to mention something as complicated as music licensing. Do you really think were going to see some legislation to change some of the things that youd like to change . That seems like a tall order just looking at the the political atmosphere right now. Guest i think it is a tall order. Chairman goodlatte has basically approached this issue in a very systematic way, attempting to gather a lot of information. He has made clear that the industry itself has to try and develop consensus about how music licensing can be reformed. And, lets face it, the Digital Music<\/a> services need to be part of any consensus as well. That is a very tall order, and its going to be very hard to do. But that doesnt mean sure. Host well, cary scherr sherman, who are the players over how we get our music and who pays for it . Guest okay. Well, we represent labels, and we are the Business Partners<\/a> of the artists. We create what are technically called sound recordings, and its basically when you make a copy of the words and music to a song. Then there are the song writers and publishers. They write the words and music. So they have their own separate copyright and entirely separate be licensing mechanisms and licensing organizations. So it becomes quite complicated because youre having to license two creative works for one use by a streaming service or a Download Service<\/a>, so on and so forth. Then you have the licensing entities themselves, ascap and bmi, for example, represent the song writers and publishers, but they have their own views about what the best form of licensing is. Then you have the Digital Music<\/a> services, and the Digital Music<\/a> services are in very different positions because they often operate under different regulatory regimes. Pandora, for example, is an, a non interactive Radio Service<\/a> which means it gets the benefit of a government compulsory license. We are required to make all of our music available to pandora as long as they pay a royalty rate thats set by the government. Then you have satellite radio. They also get the benefit of government compulsory license except they operate under a different rate standard than pandora does. Then you have spotify or apple music or audio and others, rhapsody. They operate this in the marketplace where their services are on demand. Theyre called an Interactive Music Service<\/a> so that you can pick what song you want to hear right now, and it will play that song or that album. But they have to negotiate in the marketplace with Record Companies<\/a>. So its an entirely different licensing mechanism. And then when you get over onto the publishing side, it gets even more complicated. I wont bother getting into all that now. It just goes to show we have a hybrid licensing system where if you are in your car listening to music, if you listen to it over am fm radio, the artist would not get a cent. If you connect your cell phone to your car stereo and its on pandora, theyll get one rate. If you connect it and it comes over spotify, they will get a higher rate. If it i mean, its crazy. Its a broken system. Be and its way too complicated for a world in which people need to license 20 million tracks at a time instead of one song or one album at a time. And thats why its the so difficult for this transition to take place. Host so if you got to decide how this changed, how would it change . What change would you like to see . Guest well, we would need a lot of changes, is the problem, and there are a lot of players involved. First off, we would want to be paid by am fm radio. I think its remarkable, most people are shocked to learn that in todays day and age am fm radio pays nothing to artists and record labels when they broadcast their music. They do pay the song writers and publishers, but they do not pay artists and labels. So this is a 16 billion industry where theyre earning 16 billion in advertising revenues every year from be, basically, the use of music, and they pay nothing for it. Theres no other copyrighted work that is discriminated against that way, and there are virtually no other developed countries in the world that discriminate recordings that way. Yet special exemptions in u. S. Law, unique u. S. Situation. Wed want to fix that. Wed want to fix the below market rate standard that siriusxm enjoys. For some reason they were grandfathered at a time when they were a startup. That grandfather still exists even though theyre making money hand over fist. They ought to be sharing their revenues more fairly with the people who create the music on which their service is based. That needs to be fixed as well. We really need to do something about making sure that all creators are paid fair market value regardless of the platform that theyre on, and that is not the Current Situation<\/a> right now. We also need to revise the, its called mechanic alliancing system. Its an odd term, but its the royalty thats paid for the reproduction and distribution of a copy of a recording. So when a Record Company<\/a> licenses a song for a cd, it gets a mechanic alliance. Well mechanical license. Well, the law for that was written in 1909. So you have to send a certified letter by mail one song at a time asking, you know, saying im going to take advantage of this license. When youre licensing 30 million tracks at a time, youre not sending out certifies letters one song at a time. And be by the way, there are multiple songwriters and multiple Music Publishers<\/a> for every one song. We need a blanket licensing system where you file one piece of paper, and youve got a license, and then you handle the distribution of money be afterwards. Those are just some of the things we need to do, and all of them are challenging. Ive heard you talk a hot about regulatory parity at zero, siriusxm and, obviously, pandora, and what ive heard recently before we get to the Interactive Services<\/a>, would you want to see some type of equilibrium between what the noninteractive and the interactive guys have to do, or should they stay outside the compulsory system . Guest well, we dont believe in compulsory licenses as a matter of principle. A as a matter of practical reality, the law is not going to change. We understand that there are efficiencies to having a compulsory license, so were not asking to change that. Got it. Guest it is a little odd that we have a compulsory license for music. These are not nuclear warheads. Correct. Guest but we understand that thats going to continue. But certainly, we dont want the compulsory license extended beyond that which already exists. The marketplace deals work a lot better for the industry. The rates that we get from spotify or for apple music for their on demand services are much, much greater and much more beneficial for the industry than the rates we get for pandora. Right. Its also my understanding, i dont have the exact figures here, but that a lot of the labels have a stake in some of the interactive platforms like spotify. That makes some of the governance here and whos paying whom even more complicated than it already is. How does that factor in u its kind of like a platform that has a label investment being paid by a label, help us sort that out a little bit. Guest well, that issues a little complicated because, first of all, there are lots of deals where the Digital Music<\/a> service wants the licensor to take an equity stake because they want them to have a stake in the success of the service. Sure, right. Guest so it is a good thing for them to do. Most of those equity stakes never pay a nickel because the service goes out of business and is unsuccessful. Every once in a while there can be a success. But the terms under which you might take equity sometimes youre actually making a dollar investment in the company, sometimes its just something they want to throw in. They vary quite widely. But it does make for much more interesting marketplace deals because you have the opportunity to work out deals in very flexible ways unlike under the compulsory license where its sort of a onesizefitsall approach, be theres one rate for pandora and for siriusxm and so on. Everybody pays the same thing, and you dont have the opportunity to sit down and figure out how to make the Service Function<\/a> better, be more appealing to consumers so that its a win win for everybody. Sure. Lets pivot, if we could, to the crb, thats the copyright royalty board which you mentioned before which sets those compulsory licensing rates. Were coming up on the end of the year where the crb is expected to set the next rates that pandora and sirius siriusxl pay for the next five years. Give me a little bit of finish show me your crystal ball a little bit, if you would. What are we going to see out of the crb, and what are the potential consequences of whether they sort of i think you guys have suggested that the rate be around 25 p cents per 100 streams whereas pandora and the like have suggested it be around 11 cents per hundred streams. Guest well, and i heart radio suggested about five thousandths of a the reality is we think the proposals that were made by the Digital Music<\/a> services were unfairly low. As it is, youre hearing artists and labels complaining about the fact that they cant build a Sustainable Business<\/a> at the royalty rates that were currently collecting from streaming services. Not all streaming services are the same, and thats the problem that were facing. Right. Guest in terms of the crystal ball, one thing ive learned is not to use one. Sure. Guest you cannot predict whats going to happen. But, you know, were hoping that the royalty rates that we get from pandora will go up. They are a huge service. They are now in the marketplace, they are a public company. Theyre beginning to try and monetize, which is not something they were doing before. Because before they were focused on their ip work, you know . They ipo, you know, they just wanted more and more listeners. Now they have to tile try to monetize the music service, and we hope they will be successful at it. Sure. And i wanted to follow up there because when we were talking about the Interactive Services<\/a>, your point was the labels want to see these services succeed guest absolutely. Because this is how music is going to be disseminated in the future. Is there sort of a be careful what you wish for to the extent, well, if we jack up pandoras rates, they arent going to be as fruitful in innovating or doing things that will ultimately be good for our members and their artists in the future . How do you find that balance . Guest well, one of the complications of this issue is something we call convergence. When the compulsory license was created back in 1995 and then again in 1998, it was a pretty clear model. You had a Radio Service<\/a> where its like radio where they just broadcast music to you, and be be and then there was the Interactive Services<\/a> that could be on demand and you could pick what you wanted to hear. But then they started to converge. Pandora offered not just a Radio Service<\/a>, but rather, you customize your radio station. Whatever you want to hear it almost sounds interactive to people. Guest it almost does, doesnt it . Sure. Guest and the other thing was what they basically did wuss, oh, i like eric clapton, you would get all this music that was satisfying your music tastes. And it became sort of a playlist. And then the on demand Services Like<\/a> spotify realized, well, people dont want to just do on demand, they want playlists too, so they started offering playlists too. What youd had was a convergence where pandora has moved from a pureed owe model to a very, very highly customized service. They dont recognize that for pandora and spotify there are two different models, but for spotify youve got to pay more than you do for pandora. As a result, theres a lot of confusion in the marketplace, and the fact that theres been such convergence, it makes us very wary of having pandora not be able to innovate because the fact is that theyre innovating into the interactive market and decreasing the benefit of the market for a spotify, apple, rhapsody and the like. Host well, cary sherman, is it fair to say the Music Industry<\/a> was slow to recognize the technological changes that were making music delivery different . Guest well, thats criticism that is actually leveled at us. That is often leveled at us. If you actually look into what was required to make this happen, youd be more sympathetic to the plight of companies. This happened all very, very quickly. You know, we were the canary in the coal mine. We had very, very small files that could be traded online way before movies and books and everything else. So it did catch us by surprise. We also thought that people would want only high quality music. I mean, people spend months in the tuesday in the studio perfecting every sound. Who would want to hear an mp3 file in a tin earphone . Turns out people did. And then, actually, the companies experimented with full album deliveries, they did a project with ibm for full album downloads. They organized their own joint ventures to create Distribution Systems<\/a> and so on, but the fact is Record Companies<\/a> should stick to making music, not technology. And apple came in and showed how it could be done, and it was done well. And apple created the path for a Download Service<\/a> that actually worked and that worked for everybody. That had the benefit of being the old model. It was just instead of selling a physical cd, you were selling a file, but it was the same royalty rates, the contracts applied relatively easily. Its the transition to streaming that has been really complicated because its a combination of different rights, its something that wasnt really covered before. Its been much more difficult to transition to streaming than it was to downloads, yet that is happening now. The industry has learned you cannot change what Consumers Want<\/a>. If Consumers Want<\/a> streams, thats what theyre going to get. And they have voted that they want streams. Streaming has increased 23 just this year over last year. Just, you know, five years ago it was in the single digits. It is now about 32 president of our rev 32 of our revenues and continuing to incline. So we have got to transition to streaming. But we need to get into the streaming services where the revenues are significant. We do very well from spotify be, but we do very poorly from youtube and from pandora. Because they pay royalty rates that are a fraction of what were getting from spotify and apple music and so on and so forth. The more that we can shift users into subscription services, the more remunerative streaming will be, and songwriters, labels, publishers will be able to make a living with streaming. But if were stuck in a world of the statutory license under pandora and youtube has a slightly different situation, let me give you an example. This is an amazing fact. Youtube serves up billions, billions of streams of music every year. With those billions of streams, they are paying us less than we earn from the sale of vinyl records. They are the largest ondemand streaming service in the world, and certainly in the u. S. Theyre serving 100 million people. We earn less from youtube and the other ondemand, adsupported services than we do from the sale of vinyl records. Somethings wrong here. Thats our problem. I want to bounce back to the congressional angle. You said that its a tall order, the copyrighting reform effort, but its not worth trying. I think a lot of people guest it is worth trying. Sorry. Excuse me be, it is worth trying. What if it doesnt pan out . Or what if, like, the copyright act of 1976, it takes 20 years to get to fruition . What to you do then . Are there some types of private agreements that can be struck to move the ball in the interim . I know weve seen some of those in the antipiracy context. But, again, if we cant get that over the finish line, what does the raa and its membership do . Guest ing we cobble together Public Sector<\/a> solutions. Can you give us some examples of what that looks like . Guest well, there were issues remember i mentioned mechanical royalties which are distribution rights . And the question was do you have to pay for a mechanical license when youre streaming, which is usually considered a Public Performance<\/a> be, or do you only need be a license from ascap and bmi . Be well, we worked out a solution where we agreed on a combined royalty rate for both the performance for ascap and bmi and for the mechanical in one allinclusive rate. We worked that out because it was a practical solution to a legal and practical problem. And we proposed it to the copyright royalty board, we proposed it to the copyright office, theyve embodied it in regulations, and its now working. So thats an example of finding a practical solution within the confines of the law but in a way that the 1909 legislation didnt contemplate. We will continue to look for those kinds of solutions. Sure. Lets talk about transparency for a second. A lot of the platforms say that when you hear an artist complaining that they have low compensation, its in large part because the labels or in a lot of cases the publishers on the songwriter context are skimming off the top. Its sometimes hard to evaluate those claims because we cant really see what the deals look like. I know that in the compulsory perspective, in the compulsory part we know what sort of sound exchanges look like. But outside of that context, would you agree that more transparency is a good thing to sort of educate and get everyone on the same page, and if so, what are we doing to get there . Guest we definitely need more transparency. We definitely this is a very complicated business, and youve got very different deals as we just talked about. Most artists dont realize theyre being paid this much from youtube and this much from spotify, yet you hear artists withdrawing from spotify and insisting it be on youtube. Right. Guest people dont understand where their money is coming from. Many educated artists, more more educated more managers are important for everybody. Artists deserve to know how theyre being paid and how their work has been used and compensated, and we need to make it easier for them to get that information. Flight, you know right now, you know, we used to be able to give them here are your cd sales is and heres your royalties. Now youve got hundreds of thousands of pages of, you know, midnight royalties from minute royalties from all the Different Services<\/a> and markets, and the deals vary from year to year and label to label. Its complicated. We need to find a way for artists to be able to get that information in a usable format. Still having all the information that they want, but not in so much detail that they miss the big picture. So its just another bump in the road on this digital transition. Its not surprising that these issues would arise, and we will work through them and find ways to solve them. Host can a artist like taylor swift, does she have control over her music and where its played . Guest complicated answer. She does have control over her music be its on if its on a Interactive Service<\/a> and only in connection with the recording, not with the musical work. She writes her own songs, she is you should a government consent she is under a government Consent Decree<\/a> to license her music via ascap or bmi on a, under this Consent Decree<\/a>. So she could not remove her music from spotify based on the musical work. But she could based on the fact that she and her record label own the rights in the master recording. So even that is a complicated example be of how an artist has some ability to control her destiny but not a complete ability because of this hybrid licensing system were under. Host cary sherman, we have about a minute left. We all know congress is busy, its an Election Year<\/a> next year, a little bit of turmoil going on this right now. [laughter] what would you like to see them do first in and do you expect that to happen this year . Guest well, actually, what id really like to see them do is fix the dmca. This digital millenium copyright act which was passed in 998 which means it was written for aol, not google is still the antipiracy system under which we have to operate, we have to give notice be of an illegal copy, and they will take it down. Well, that system doesnt work. It hasnt worked for years. Its a joke. Yet it is the basis on which some Pirate Services<\/a> and some legitimate services are able to get no royalties or discounted royalties. Groove shark which was finally closed down by the courts relied on the dmca to say we dont know whos putting illegal music on our service, we have no responsibility for that. People are using the dmca to get away with, basically, distributing our music without paying us or paying us below market rates. We cant control piracy, and we cant get the value that music deserves so long as the dmca remains the test. And, therefore, we would really love to see congress focus on that. Host 50 billion, i think, was the number of 50 billion, i think, was the number of illegal downloads according to your web site, 30 billion or 50 billion, Something Like<\/a> that, songs. Has that changed since the licensing Interactive Services<\/a> have come into being . Guest well, the streaming services, one of the great benefits of streaming services is theyve reduced the incentive for piracy. Because if you can get all the music you want whenever you want it, why would you bother going to an illegal site to download snit especially since the illegal sites have malware and spamware and all sorts of things you dont want on your machine. So that has helped. But piracy continues to evolve, and there are all sorts of other problems. This is not, you know, kids in a basement. These are international, sophisticated rings that are engaged in this kind of crime, and they make a lot of money, a lot of money for this. And thats why we have to evolve in our antipiracy strategies at the same time as the piracy prop changes. Host and weve been talking with cary sherman of the Recording Association<\/a> of america and alex byers of politico. Gentlemen, thank you. Thank you. Credit card cspan, created by americas Cable Companies<\/a> 35 years ago and brought to you as a Public Service<\/a> by your local cable or satellite provider. Next, the number of working age adults receiving disability benefits is rising. Senator tom cotton talks about the effects of Disability Insurance<\/a> and ways to improve it. [applause] thank you, john, and let me add my welcome this afternoon to the heritage foundation. Social securitys Disability Insurance<\/a> program was established in the 1950s. Like much of our federal governments social safety net, the Disability Insurance<\/a> program was founded with noble intentions to insure that americans who could not work because of mental or physical impairment would not suffer from poverty or destitution","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia801302.us.archive.org\/20\/items\/CSPAN2_20151116_130100_Key_Capitol_Hill_Hearings\/CSPAN2_20151116_130100_Key_Capitol_Hill_Hearings.thumbs\/CSPAN2_20151116_130100_Key_Capitol_Hill_Hearings_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240623T12:35:10+00:00"}