BY DANIEL MCSWAIN
In an arena usually reserved for Washingtonian political insiders, there are an awful lot of music industry people getting involved in legislating about music.

The issue of royalties paid to copyright owners when their performances are broadcast over a variety of media (or, simply put, a "performance right") has taken something of a center stage in this whole debate. Now, consumers, legislators, and all interested parties in between are attempting to engage one another in this suddenly crowded house.

"Legislation takes a long time to get off the ground and actually happen, and in that time technology changes," said Aaron Cooper, Counsel for the Senate Judiciary Committee, speaking on a panel titled "The Hill Was Alive With the Sound of Music."

Cooper and his fellow panelists, which included representatives from the FCC as well as Congressional aides, painted a picture of legislators increasingly involved, for better or worse, in drafting laws and regulations that have a very direct effect on consumers and music creators alike.

Going into detail on topics like Net neutrality, low power FM licenses, and the growing issue of performance rights for broadcast as well as online services, the panelists depicted their bosses and departments as taking a progressive and overwhelmingly tech-friendly stance on these issues.

But when the panelists were asked why none of the Senators they worked for or with (Sens. Feingold (D-WI) and Doyle (D-PA), among others) had failed to co-sponsor the Internet Radio Equality Act, the panelists mostly dodged the question.

"What we've been trying to do on the Hill is to encourage both sides to enter private negotiations," Cooper said. "The labels need to recognize that if the rates are to such a level that internet radio cannot survive, it's not to anyone's benefit."

"The biggest obstacle here is the broadcasters"
Marybeth Peters, who has worked in the U.S. Copyright Office for over 40 years and has served as the U.S. Register of Copyrights since 1994, was perhaps the Summit's most high-profile name in attendance.

Aside from Peters' widely-reported admission of being "a luddite" who doesn't own a home computer or a DVD player, perhaps the most striking aspect of her speaking appearance was her passionate defense of instituting a performance royalty obligation on broadcasters.

"I believe recording artists have a right to get paid for their performance," said Peters. "The biggest obstacle here is the broadcasters, so we will see how this works out. In the past they've been a very effective lobbying group."

"I'm an eternal optimist," Peters went on to say. "I do believe that some day everybody will see the light and recognize that pure justice, pure fairness says that recording artists need to get paid."

The rate-setting standard
In an appearance before the Committee on the Judiciary in July [RAIN coverage here], Ms. Peters advocated that the "willing buyer willing seller" standard used to determine webcaster royalty rates be used for broadcaster rates should a performance royalty be imposed.

Before the crowd assembled for the "Performance Right" panel, SoundExchange Executive Director John Simson was asked if broadcasters, were they to be subjected to a process similar to webcasters', should feel confident that a fair and workable rate would be reached.

Simson responded, "One hopes that the broadcasters will come forward and present their information about their financials. If the webcasters didn't put on the case [to the Copyright Royalty Board] they should have put on, whose fault is that?"

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From the New York Times: "Late last year John Draper, a 41-year-old computer programmer, awoke in his house here with a stomach-churning problem. A Paris outfit he had hired to help run his Internet radio station,  Atlantic Sound Factory, was in trouble. The server it used to connect him to roughly 1,500 listeners daily was perilously overloaded. If it became unstable — reducing the quality of his stream or, worse, shutting down entirely — he’d be in trouble...

"Mr. Draper’s turning point came in early January 2006, when he applied for a listing on iTunes and was accepted... In 20 minutes, he said, he was at 70 % of capacity; by 10:30 p.m. his limit was reached...

"So he did something that 'my parents raised me never to do': he asked his audience for money... Five minutes after shutting off his microphone, he had a half-dozen donations of between $10 and $20...

"But dodging that bullet meant that Mr. Draper lived to face the SoundExchange firing squad. And again he has managed to stay on the air...

“'Our research shows that there is scant evidence they are getting people to buy music,' [SoundExchange executive director John Simson] said...'There’s not enough people hitting that "buy" button to make me want to give them a sweetheart deal.'

"Mr. Simson suggested that 'we have some momentum' now that roughly half of the small Webcasters with licenses have agreed to his offer. But Loud City — and thus Mr. Draper — is not among them.

"The reason, said Brandon Casci, Loud City’s co-founder, is that SoundExchange has added a new cap for small Webcasters: A station cannot exceed five million listener hours a month. 'That may sound like a lot,' he said, 'but it equals about 7,000 people tuning in simultaneously 24/7. How are we supposed to sell advertising with numbers like that? The ceiling is just too low.' Mr. Casci said he was holding out for a middle ground that will let companies like his grow."

Read the entire article at the New York Times.

From Mel Taylor's blog "Traditional Media in a Web 2.0 World": "Compared to past years, there is a dramatic increase in the number of Internet oriented panels at the upcoming NAB Radio show, (this) week in Charlotte [see RAIN's preview here]. Good thing too. Locally focused advertisers are spending more money online, and radio (as well as TV & newspapers) are in a good position to leverage this. But will they do what it takes to win ?

"When posing this question to really smart, seasoned broadcast managers, they inevitably respond, 'I don’t want to cannibilize my broadcast money, and I don’t want my sellers chasing Web dollars. We’re in the RADIO business !'

"This is where I cautiously launch into my patented reply: 'I understand exactly what you’re saying. Many broadcasters feel the same way. Yet, I know of a growing list of broadcasters that are starting to realize: We’re really in the business of connecting marketers to consumers. We enable commerce, and luckily, we have the ubiquitous power of the radio transmitter to help enable that advertiser/consumer relationship. Let’s use ALL of our assets: spot, promos, Web, database, live remotes, and events to accomplish that.'..

"Radio is in a much better position than they think... Traditional media needs a strong gameplan to go after these growing online dollars. As more dollars are being allocated to ‘measured media’ like the Internet, some smart broadcasters realize that they own some pretty powerful tools to grab a piece of fast growing Web expenditures.

• Relationships with media buyers/planners, especially on the local front: Broadcast reps will always have a shot to pitch interactive or cross platform programs... The exploding volumes of pure-play dot coms are finding it hard to get in front of these key descision makers...
  
  
• The Broadcast transmitter and tower: ..Radio has it’s very own megaphone on steroids; the transmitter. The dot com pure-plays don’t have this luxury. They have to pay for offline promotion.

"Broadcasters are well positioned to re-invigorate their business by leveraging the assets they already have in place. Now all they have to do is put more skin into the game. How? Devote appropriate resources, and make the Web a strategic part of every sales, programming and marketing initiative……. not just as an ‘add-on’."

Melt Taylor is National Sales Manager for WorldNow’s Local Media Network, representing the online inventory of 250 TV station websites. Read Mel's blog here.

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