Music Industry Pushing for New Fees Through Legislation

| News

The music industry looking for ways to generate new revenue from downloaded content, and it has turned to Congress in hopes of passing legislation that would force companies like Apple and Amazon to pay additional royalty fees. If passed, media download services would have to pay royalty fees for the songs played in movies and TV shows, and for the 30 second track samples users listen to before buying a song, according to CNET.

The music industry claims that songwriters and composers aren't getting paid royalties for their works if they are included in downloaded versions of movies or TV shows. They are also claiming that the 30 second song samples consumers listen to at the iTunes Store and other online music services constitutes a public performance and should be paid for.

The Digital Media Association (DiMA), the organization that represents Web-based music and media companies, contends that the music industry can't charge royalties for the music samples users hear before paying for songs. Jonathan Potter, executive director at DiMA, said that copyright laws protect companies like Apple and Amazon from paying fees for pre-purchase song sampling.

The music industry sees Internet downloads as a big shift in the way consumers get music, movies and TV shows, and the current model doesn't properly account for that change.

David Israelite, president and CEO of the National Music Publishers Association, commented "As more and more people watch TV or movies over an Internet line as opposed to cable or broadcast signal, then we're going to lose the income of the performance."

Mr. Potter, however, doesn't agree. "These guys are afraid that the business model is shifting away from public performances to a model of private performances," he said. "This is a turf battle. They are saying, 'The songwriters aren't getting paid.' Baloney. Songwriters are getting paid."

Since the music industry apparently can't get companies to agree to pay additional royalties, it took its cause to Congress in hopes of getting legislation passed that forces companies to pay the extra fees. It will likely be an uphill battle for the industry, but if it manages to get new laws passed, the end result will be higher song, movie and TV show download prices for consumers -- and that could lead to fewer sales, which is exactly what the music industry doesn't need.

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Comments

Tiger

Pardon my bluntness, but what the hell business is this of Congress? Don’t our elected officials have better things to worry about than a bunch of people who can’t seem to forge satisfactory contracts?

They DO negotiate content fees, they just don’t apparently want to live with those contracts anymore. If you’re mad at the music recording companies, DEAL WITH THEM. But since you are already getting paid for your content, don’t be surprised if your please fall on deaf ears.

And do you charge every record store that allows a customer the right to sample the music on headphones every single time? How is that even feasible?It would be like tracing every penny ever minted. It would be like restaurants charging you to try samples. It is in other words ludicrous.

But I go back to my original question, why is this any business of Congress? Maybe the FTC who has the right to regulate trade. But Congress?

sumtermug

Due to the cost of purchasing CDs, I had stopped buying new music for several years. Thanks to the iTunes store, I have been buying music fairly regularly for the past few years. If the music industry pushes this too far, they will simply lose ALL the money they were making from people like myself. Of course, then they will just say it is the fault of the download service, and request even higher rates. They are just going to end up shooting themselves in the foot over this…

marcsten

Setting aside the legality of congress passing a tax because one party isn’t getting what they want from negotiations, isn’t this like charging people to watch commercials? I have bought many recordings as both download and hard media after listening to the samples. In the absence of that opportunity, I would not have bought. Is this really what these clowns want?

Cintra

Pardon my bluntness, but what the hell business is this of Congress? Don?t our elected officials have better things to worry about than a bunch of people who can?t seem to forge satisfactory contracts?

Exactly my first thought when I read this..

ctopher

I like listening to samples over my internet line.

JKP

These music industry people are all still stuck in the last century, if not the one before it. It’s pathetic, really, how they are still crying about all this.

The real trouble for the music industry is they built a model (the CD) that ripped off consumers by forcing them to buy 10 or 12 songs when all they wanted was one. How many really good albums are there where every song is worth buying? Not many.

Now that music is available at per song pricing again—surprise!—they are “losing” money. So they need to figure out a way to re-gouge their customer. But seriously, they want to charge me for what, in essence, is a 30 second commercial that drives me to buy the product if I like the sample?

Have they lost their minds?

Maybe they should focus on making better products (songs) that more people want to buy.

Wake up music industry, it’s the 21st century now and the world isn’t going backwards to your old business models.

doogie

Perhaps the industry is trying to discourage sampling prior to buying.  In some cases I realize after listening to a sample that I am not interested.  In the old days, once I got the CD/LP home and listened to it it was too late to change my mind.

In practice, I find that I buy more music because of the individual track availability and the ability to preview them.  It smacks of typical industry how-do-we-shoot-ourselves-in-the-foot-next? mentality.

Don’t get me started on how corrupt our congress must be that the music industry even _thinks_ that they can buy this sort of legislation.

Lee Dronick

n practice, I find that I buy more music because of the individual track availability and the ability to preview them.? I

Same for me.

Also as with sumtermug I am buying very few CDs at retail prices. I will poke through the bargain bins in a store and have bought music, and video, from those. You can find some old classics in those, the other day I got the movie Animal House on DVD for $5

Nemo

While Congress clearly has the authority pursuant to Art. 1, Sec. 8 of the U.S. Const. to grant letters patent and copyrights, Art. 1, Sec. 8 does not express grant to the Congress the authority to impose the terms of a copyright license on a person.  To find that authority, Congress would most probably look to the Commerce Clause.  Id.  But I doubt that Congress will intervene for political, legal, and pubic policy reasons.

Politically, the media companies are quite powerful.  I thin that they will effectively lobby Congress not intervene in what is normally a negotiation among private parties.

Legally, it would be an extraordinary, though not unheard of, step for Congress to impose essential economic terms of an agreement among private parties.

Finally, it is the usual policy of government to establish certain private property rights in persons, and once those rights have been established, government generally lets parties negotiate the use, disposition, and control of their property.  In granting composers, a copyright in their works (17 U.S.C. ? 106), it has conferred on composers certain exclusive rights in their works, leaving to them to negotiate the permission for others to exploit those rights.  Government will then enforce the licenses negotiate through the courts.  Except in extraordinary circumstances, where it is determined that there is such a disparity of bargaining power that one of the parties does not have the ability to fairly bargain, will government intervene.  Examples would be contracts of adhesion, fraud, illegal coercion, and/or lack information by one party.  However, absent those kinds of incapacity or fraud, that a party cannot obtain what it wants through a fair negotiation is not sufficient to invoke government action.

Here, Congress have granted composers their copyrights, and the composers have access to at least adequate legal representation and the ability to negotiate as a group through institutions such as ASCAP and/or BMI.  Therefore, it is hard to see how they, composers, are not in a position to effect a fair bargain through negotiations.  That composers’ position may not be sufficiently valuable to get what they want is no reason for Congress to intervene on their behalf.  If composers want more money, let them negotiate for more in their synchronization and mechanical licensing to reflect the value of downloads.  If composers can’t prevail in those negotiations, it is not Congress’ job to use its awesome power to tip the scales in their favor.

Gene King

Re: JKP’s comments
Actually, the multi-song collection goes back to the vinyl LP. I think the record companies got “itchy” when the digital age produced lower priced copies of music. I still buy CDs just not as often. Also, I’ve found that a used CD sounds as good as a new one to me.

JKP

Agreed on the LP, but back then the industry was still quite 45 rpm driven as well. I can remember buying almost as many singles as LPs for bands where I only cared for the one tune.

With the CD, CD-singles were never really prevalent, that was when they started to trap us and their revenues took off.

I also have been buying mostly used CDs since the mid-90s, and I remember the RIAA was getting ready to go after them just before the MP3 thing hit them.

fred mertz

Yes, they are losing their minds.

The 30 second previews are free advertising for the artist. Far from Apple paying them, Apple should CHARGE them every time someone clicks on a preview- just like a click-thru advertisement.

That would shut the labels up, right quick.

These morons think the very act of downloading constitutes a “performance” - so what if you can’t actually listen to a song as it’s downloading? Don’t let a little thing like logic get in the way..

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