Lobbying on Public Performance Rights Seen Increasing
Public performance rights headlined lobbying efforts for the music licensing industry, in Q3 lobbying disclosure documents filed last week. The Respecting Senior Performers as Essential Cultural Treasures Act (Respect) (HR-4772), the Songwriter Equity Act (SEA) (HR-4079) and the Department of Justice’s current review of consent decrees for performing rights organizations were lobbying emphases for a vast array of music stakeholders. DOJ’s consent decree review of the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music Inc. (BMI) highlighted a divide between broadcasters who believe the decrees keep the potential monopoly power of PROs at bay and music publishers and songwriters who think the decrees give an unfair advantage to broadcasters (see 1409150067); (see 1408040070).
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The Respect Act appeared to draw the most attention, and there have been recent rulings against SiriusXM in California courts on the webcaster’s unauthorized use of pre-1972 sound recordings (see 1410160001); (see 1409240079). The Respect Act would require webcasters using a statutory license for digital streaming to pay public performance royalties for pre-1972 sound recordings, but wouldn’t place those recordings under federal copyright law. That could create uncertainty for webcasters who depend on the Digital Millennium Copyright Act’s notice and takedown regime, which is governed under federal law. Pandora has said it's open to full federalization of pre-1972 sound recordings, but under a technology neutral approach (see 1410090097).
Companies and organizations that lobbied on the Respect Act in Q3 included the American Intellectual Property Law Association, Digital Media Association (DiMA), iHeartMedia, NAB, National Music Publishers’ Association (NMPA), Pandora, RIAA, Radio Music License Committee and SoundExchange.
Lobbying on the Respect Act is “indicative of an increased focus on radio in all of its forms -- AM/FM or digital,” said Casey Rae, Future of Music Coalition (FMC) vice president-policy and education. “This will only increase in the next Congress, and probably continue until the point that a compromise solution is brokered that addresses all of the issues in this space, from parity in rate-setting standards to exemptions to process and oversight."
The “combined market cap” of the businesses lobbying “against artists” is “over $1 trillion,” said music industry attorney Chris Castle, who represents artists and musicians and has worked with digital music services. “We’ve never had that kind of opposition to artists before.” Castle cited Amazon, Apple, Clear Channel, Google, NAB, Pandora and SiriusXM as the main opponents of musicians’ rights. Those companies are trying to “reverse by statute” the California cases on pre-1972 performance royalties, said Castle.
RIAA spent $895,585 in Q3, down from $972,936 last year. It spent just over $1 million in Q1 and $1.25 million in Q2. RIAA’s Q3 spending included payments to the Alpine Group ($50,000), Capitol Counsel ($30,000) and Fierce Isakowitz ($40,000). The NMPA spent $185,000 in Q3, $15,000 less than the year-ago quarter. NMPA spent $200,000 in both Q1 and Q2.
ASCAP’s Q3 spending totaled $215,000, the same as last year. ASCAP paid the Capitol Group $105,000 and Thorsen French Advocacy $110,000 in Q3. BMI spent $100,000 in Q3, with $90,000 to the Smith-Free Group and $10,000 to Drinker Biddle. That was $20,000 less than Q3 2013. BMI and ASCAP said they lobbied on the SEA, among other issues. The SEA would update Copyright Act sections 114(i) and 115 that prevent “songwriters from receiving royalty rates that reflect fair market value” for their use (see 1406190093).
SiriusXM paid the Paul Laxalt Group (PLG) $50,000 in Q3, the same as in the year-ago period. SiriusXM outsourced lobbying efforts exclusively to PLG and Wiley Rein beginning in 2009, but ended its contract with Wiley Rein in Q1. SiriusXM lobbied Congress on bills “relating to royalty-setting standards.”
Pandora spent $120,000 for Q3, an all-time record and $40,000 more than both Q1 and Q2. Pandora lobbied Congress on antitrust issues related to the DOJ consent decree review. DiMA spent $84,099 in Q3, its largest expenditure since 2010. DiMA lobbied on “matters relating to songwriter royalty payments, the ‘mechanical’ license and intellectual property enforcement.” DiMA members include Amazon, Apple and Google-owned YouTube.
The FMC didn’t spend anything in Q3, compared with $20,000 each in Q1 and Q2. FMC has outsourced its lobbying efforts exclusively to Bracy Tucker since 2001, but hasn’t cited any specific lobbying activity since Q4 2012. “It is very rare for us to tell members of Congress that we oppose or endorse a specific piece of legislation,” said Rae. The Respect Act is a “step in the right direction, but doesn't go far enough in providing the full suite of protections to performing artists who recorded music before February 15, 1972,” he said. “We would like to see these creators enjoy all of their rights under the law,” said Rae.
SoundExchange spent $215,000 in Q3, $5,000 less than in Q3 2013. The digital rights performance organization paid American Continental Group $70,000, Brownstein Hyatt $30,000, and Greenberg Traurig $30,000 in Q3. The Recording Academy paid Greenberg Traurig $30,000 in Q3, the same as the year-ago period. The academy lobbied Congress on IP performance rights.