Three Songwriter Organizations Oppose Internet Radio Fairness Act
December 03, 2012   |    By Ed Christman (@edchristman), New York

In the last three weeks, three coalitions of songwriter organizations have written letters to congress opposing the Internet Radio Fairness Act (IRFA) while asserting that songwriters royalty rates paid by services like Pandora are too low and need to be raised.
 
On Nov. 19, the Songwriting Guild of America, the Music Creators North America alliance and the European Composer and Songwriter Alliance wrote a letter to Bob Goodlatte, chairman of the House Judiciary subcommittee on Intellectual Property, Competition and the Internet voicing their concerns. Unlike artists and record labels, which can negotiate royalty rates under the willing buyer/willing standard, songwriters and music publishers are subject to more "onerous standards that take into account other considerations," according to the letter.
 
"What has been lost in the discussion about [IRFA] is the astonishingly low level of royalties currently being paid to songwriters, composers and lyricists by internet radio providers like Pandora, which pays only 4% of its revenue to songwriter and about 50% to labels and recording artists," the letter states. That represents a ratio of more than 12 to one, which the letter labels "an outrageous and indefensible disparity."

Radio Broadcasters Get an Earful at Internet Radio Fairness Hearing

The complaint is similar to the one voiced by other coalitions of songwriter organizations- the National Music Publishers Assn., the Nashville Songwriters Assn. International and the Church Music Publishers Assn.-which wrote a letter on Nov. 16 to the same Congressman.

Consequently, "this rate formula grossly underpays music creators for their creation and it should be changed to the willing buyer/willing seller standard," according to the letter from the SGA, MCNA and the ECSA. "To make matters worse, Pandora has just recently sued ASCAP to further reduce the already nominal amount that Pandora pays to music creators and publisher, threatening to make an already untenable situation worse," the letter continued.

The organizations signing the letter said they are working with other colleagues to "develop proposals that we respectfully suggest can be considered, at the appropriate time, as separate legislative initiatives to address these grossly unfair situations," the letter concludes.

Business Matters: Internet Radio Bill is About Fairness -- and Money

The letter-signed by SGA president and MCNA co-chair Rick Carnes, MCNA co-chair and president of the Songwriters Assn. of Canada Eddie Schwartz; and ECSA chair Alfons Karabuda-pointed out other problems with the proposed legislation, which were also voiced by ASCAP, BMI, SESAC and the Nashville Songwriters Association International, in their joint letter to Goodlatte on Nov. 28. As pointed out, in the Nov. 19 letter, those problems concern the wording of IRFA, including the implication that collective licenses are "inherently untrustworthy instruments of market power;" and how the proposed legislation calls for a federal government-facilitated music registry, which would be redundant since an effort to build such a database is already underway by the music industry. Finally, it says the proposed legislation's language is in places both broad and vague.

On Nov. 28, the Intellectual Property, Competition and the Internet Subcommittee held its rather contentious first hearing which saw digital music webcasters, musicians and songwriters and broadcasters squaring off over how best to license music. Those testifying included, Pandora's Chief Executive Joe Kennedy; Jimmy Jam, speaking on behalf of artists as chairman emeritus of The Recording Academy; Michael Huppe, president of SoundExchange; and Bruce T. Reese, CEO of Hubbard Radio testifying on behalf of the National Association of Broadcasters.

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