Industry information that you can actually use
June 2003
FCC Flips US the bird
ASCAP celebrates a court a decision that lets them pay songwriters MORE than instrumental composers.
RIAA screams "unfair" to the California Senate. New Bill would make record companies report royalties accurately as a matter of law. Read the RIAA's lame excuses as to why they shouldn't.
Ignoring public opinion and the opinion of lawmakers, the FCC has decided to make it easier for large media conglomerates, such as Clear Channel, to buy up even more stations and consolidate the nation's media outlets further. This is, naturally, bad news for everyone but large media holders. Several lawmakers have proposed legislation to counter the changed rules, particularly one that now permits a single company to own TV stations that reach 45 percent of the nation.
Over the years the rules have become more and more lax in this area of government regulation. ''There clearly now is going to be an orgy of mergers and acquisitions,'' said Sen. Byron Dorgan, (D) a member of the Senate Commerce Committee. He called the FCC's decision ''dumb and dangerous.'' But, both Democrats and Republicans are to blame for this. The Bush clan may be wringing their hands with joy over this week's development but it's Hollywood Bill Clinton who signed the original order to change the rules during his tenure as President. What was he thinking? "Gee, if I sign this I might meet Sharon Stone. Maybe she'll smoke a cigar with me.
ASCAP WINS RIGHT TO PAY SOME WRITERS LESS THAN OTHERS
Props to The Film Music Network for the lead on this story.
A Federal Court Judge denied a motion by a veteran score composer to be paid the same amount for his work as a pop songwriter when their work is broadcast on radio, TV and the Internet.
Federal Court Judge William Conner said that ASCAP, the worlds largest Performing Rights Organization, (PRO) was within their discretion when they pay film composers only 16 cents for every $1 they pay songwriters for the exact same usage of a musical work.
Peter Myers ("Diagnosis: Murder," "The Love Boat," "Dynasty", arrangements for "American Idol") took issue with this and sued the PRO to overturn a decision by ASCAP to classify his work as a "background instrumental," instead of what he wanted, "background vocal" which carries a far higher royalty rate.
Both ASCAP and BMI pay their members different royalty-rates for different types of performances. A performance originating from the US that has vocals singing lyrics has a status that is about 600% more than as one where the vocalist is only singing background tracks, like "ohhs" and "ahhs." (In the UK PROs pay the same rate to their writers whether it is a song used as background or an instrumental piece used as background.)
Myers claims that ASCAP's decision to classify his work as the lower status is typical of how they treat members that are not famous pop song writers. He contends in his testimony to the court that more renown artists get paid the higher rate when their songs are used as "underscore" or background, while the thousands of other instrumental works created by lesser known composers get paid the lower rate as matter of course. He claims that this judge's decision has set back writer's rights.
If he's right, then this is a grave decision indeed. Composers over the past few years have already lost much ground in negotiation with film and commercial producers. Producers have been asking for, and receiving, "buy-outs" of the composer's performance rights, in effect making the composer's work a "work for hire," and the producer becoming the "Author" of the music that they then publish in their films and commercials. The original composer under this agreement would receive no additional performance money. Only the fee for composing. In the past, composers have had leverage to get this term out of the deal, but today's decision may make that royalty stream not worth fighting over, as it gives PROs the right to selectively enforce their own regulations with impunity.
In a statement, Myers' attorney Alan Cyrlin of the Los Angeles based law firm Wasserman, Comden, Casselman, & Pearson LLP said, "Judge Conner's ruling hurts hundreds of thousands of composers and songwriters who are members of ASCAP and other performing rights organizations."
Myers is appealing the decision.
RECORD ROYALTIES BILL PASSES SENATE, BUT THERE'S STILL BAD NEWS
For those who took advantage of my, "E-Z write to your senator package," last month, you get a huge pat on the back. The Bill 1034 passed by a 22-15 vote. This is the Bill that would potentially make actionable for record companies to inaccurately account royalties owed to their artists.
For those who meant to help out with this, but didn't get to it in time, or for those who want to help push this puppy through to completion, there's more good news/bad news on the horizon.
Now that the Bill has passed the Senate it must pass the State Assembly. (Democracy Ugh!)
This will require some persuasion as well. 22-15 is not a significant majority and there are some key obstacles.
The next stop for the Bill is the Assembly Committee on Arts, Entertainment, Sports, Tourism, and Internet Media and well as the Assembly Judiciary Committee. Ms. Rebecca Cohn is the chair of the Arts Committee and she in not bullish on this Bill. For reasons why, see the excuses the RIAA is feeding her. (I've summarized them below.) Therefore, we need to have seeded the other members to the right way of thinking BEFORE that next Assembly meeting.
I've taken the time to assemble another E-Z kit. This one gets your message to the entire State Assembly AND the Judiciary Committee in two clicks. BOTH MUST BE SENT LETTERS FOR THIS TO HAVE MEANING.
The email address of both Committee members are assembled for you at the bottom of this email. All you have to do is write an email and tell them why this Bill is important to you. Keep it brief and to the point. No rambling-- we don't want them to find out what a bunch of whackos we really are. :-)
Feel free to pick at one of the lame excuses given by the RIAA and use it in your letter.
A sample letter is below. Get busy on this. We are almost making history. Be a part of it, or forever hold your tongue when others bitch about how hard it is to make a living as a recording artist.
You MUST also send or fax a copy of the letter to Senator Kevin Murray. (Email won't do). His address is in the sample letter and his fax number is: 916-445-8899.
You can also review a sample letter here:
http://www.aftra.org/resources/pr/0503/sample.html
SAMPLE LETTER
==============
Honorable Kevin Murray
California State Capitol
Room 4082
Sacramento, CA 95814
Re: Support for SB 1034 (Murray)
Dear Senator Murray:
As a (producer/artist/manager/lawyer) I strongly support your Senate Bill 1034 regarding accurate accounting of royalties to recording artists.
Record label accounting practices have routinely deprived recording artists of the money that they have earned for their services. Proper accounting of an artist's royalties not only effects his direct earnings from the sale of records but is also used to determine if an artist qualifies for health and pension benefits from his union. These benefits are extremely important to the artist and their families as well as to the public. Public funds are often used to compensate an artist if he is denied health benefits or a pension because of inaccurate royalty accounting.
Under the current structure, there is no real penalty if the record companies do not report royalties accurately. This reduces the incentive for artists to create new works and in some cases, forces them to abandon their contracts and obligations.
Once again, the pubic is disenfranchised by this course of action. Additionally, it rewards record companies, so much so that this "strategy" has become part n' parcel of their business model for the past three decades. SB 1034 would give artists the assurance they deserve; that record companies must accurately report royalties and pay them in accordance with their contractual obligations.
Thank you for continuing to support the rights of recording artists.
NAME, CITY, STATE, ZIP
THE RIAA MAKES ITS CASE
=======================
They say there are always two sides to a story. Here's the RIAA's side. I've summarized their brief filed with the state. If you want to read the entire thing, here's the link: http://info.sen.ca.gov/pub/bill/sen/sb_1001-1050/sb_1034_cfa_20030529_104857_sen_floor.html
Are you holding on to your chair? Good. These are the reasons the RIAA thinks this Bill should be defeated and my retorts to them.
RIAA 1: An overwhelming amount of our relationships with our artists are "friendly." Want proof? Okay, out of the hundreds of labels affiliated with us, only about 100 major label audits are initiated each year.
REALITY CHECK: This is very high number and the fact that the RIAA is trying to spin it into a low one, it shows how stupid they think we are. Remember their mantra, "less than 5% of signed artists turn a profit." According to Pollstar there are approximately 6500 artists signed presently with active catalogues on RIAA affiliated labels. 5% of that, is 325 artists "turning a profit." It's a fair bet that only in this universe will we find artists who are seeking an audit (or can afford one.) So 100 audits out of the 325 artists who could afford or need one is about 1 in 3-every year. Ouch! That doesn't sound like an "overwhelming amount" of "friendly" relationships to me. Plus, you can be sure that for every audit "initiated" there are about ten more artists who simply can't afford one, and about a dozen more who the labels "buy off" with a lame settlement.
RIAA 2: When disputes do arise, they are not the result of intentional underreporting. Some disputes are good-faith disagreements on interpretation of the contract and how the royalty should be calculated.
REALITY CHECK: Maybe, but the clauses ARE deliberately vague so as to allow a "good faith dispute" to occur. Make the contract clearer and cut out all the fancy deductions (and I've outlined them all in detail in my book, Secrets of Negotiating a Record Contract) and you end up with an incomprehensible 75 page manifesto that basically says, "We'll pay you if we need another record from you."
RIAA 3: Audits are sometimes used by artists as leverage to hustle us into a renegotiation. Audit claims are often inflated by auditors whose careers depend upon high pay-outs to their clients.
REALITY CHECK: False. In the industry's history, it has often been a standard practice that once an artists had proven themselves, the manager and lawyers would renegotiate the terms of the deal. This has been a tradition established by the record labels and was always assumed under a good faith basis. For the RIAA to now assert that this is a guerrilla tactic used by the artist to hijack the labels, is the classic machiavellian technique of accusing your enemy of the very thing that you are guilty of.
RIAA 4: Monies paid as a result of audits are generally less than one percent of total royalties paid, and many audits are either completely dismissed or are settled for a small fraction of the amount claimed.
REALITY CHECK: So? How does this help make their point? The fact that labels are successful in keeping the audit settlements to less than 1% of the total amount they pay out, creates a stronger argument for this Bill. Not a weaker one.
RIAA 5: When money is paid, it is often to maintain good relations with artists who control the timing and delivery of albums and not because payment is owed.
REALITY CHECK: This is a bold-faced lie. And a dumb one, as it can be impeached by simply reviewing the clauses in any recording agreement with a major label. FACT: labels control the timing of both delivery and release of a record. They have the power, in most new artists, to insist that they go back into the studio and record more and more material until the label is satisfied. Then, the label has about a year to decide if they will release it. Only artists with leverage get these clauses stricken from their contract.
RIAA 6: This bill arbitrarily singles out the artist-label relationship from a number of other similar relationships and punishes us, when we are no worse or better than say managers, producers and the crappy contracts they make artists sign. Why single us out? All "contractual relationships" sometimes produce disputes. There simply is no evidence that the number or nature of disputes in these relationships are any different than those found between artists and their labels.
REALITY CHECK: So, let me get this one straight: everyone else cheats, so why shouldn't we? I'll let the testimony of the dozens of top artists who spoke at the California hearings and signed the petition speak to this point. Besides, the excuse that we're no better than anyone else in the business, is about as cynical as it gets and is tantamount to the "we were just following orders" defense. Which was not a big hit at Nuremberg.
OBITUARY
Mickie Most. Considered by some to be the primary "Author" of the 1960s' "British invasion" sound, died of Cancer this past week. He was 64.
Assembly Arts Commitee:
Assemblymember.Cohn@assembly.ca.gov, Assemblymember.Leslie@assembly.ca.gov, Assemblymember.Bogh@assembly.ca.gov, Assemblymember.Canciamilla@assembly.ca.gov, Assemblymember.Chavez@assembly.ca.gov, Assemblymember.Firebaugh@assembly.ca.gov, Assemblymember.Frommer@assembly.ca.gov, Assemblymember.Jerome.Horton@assembly.ca.gov, Assemblymember.Kehoe@assembly.ca.gov, Assemblymember.lamalfa@assembly.ca.gov,
Assemblymember.Longville@assembly.ca.gov, Assemblymember.Pavley@assembly.ca.gov, Assemblymember.sarah.reyes@assembly.ca.gov, Assemblymember.Richman@assembly.ca.gov,
Assemblymember.ridley-thomas@assembly.ca.gov, Assemblymember.samuelian@assembly.ca.gov, Assemblymember.Strickland@assembly.ca.gov
Judiciary Committee
Assemblymember.Corbett@assembly.ca.gov, Assemblymember.Harman@assembly.ca.gov, Assemblymember.dutra@assembly.ca.gov, Assemblymember.hancock@assembly.ca.gov, Assemblymember.Jackson@assembly.ca.gov, Assemblymember.laird@assembly.ca.gov, Assemblymember.Longville@assembly.ca.gov, Assemblymember.montanez@assembly.ca.gov, Assemblymember.spitzer@assembly.ca.gov, Assemblymember.Steinberg@assembly.ca.gov,
Assemblymember.Vargas@assembly.ca.gov
MO OUT
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