Bluegrass Biz 101
EMPOWER YOURSELF:
As a bluegrass lover/musician, radio DJ, and music business graduate student, I have seen far too many professional musicians who have no idea how current changes in the industry can affect them. In these tumultuous times for the music industry, DIY musicians are becoming more and more of the norm, but without knowledge of changes in the industry and how they apply to you, your up shit’s creek before you’ve even begun. The economy makes it hard enough to get your act up and running smoothly, don’t set yourself up for major setbacks.
Fortunately, the IBMA has helped to put some current legislation that is up for approval into perspective, and into a language all of us can understand.
I have further abridged these topics and have helped link to more pertinent issues. More issues will be posted as they arise.
THE PERFORMING RIGHTS ACT OF 2009:
UPDATE (8/4/09) from Digital Music News: Senate debates Performance Right Act — READ THE BILL!
AND more rumblings in the House of Reps from Billboard:
Broadcasters are getting more support from Congress to kill legislation that would impose performance fees on music airplay. A group of 22 House Democrats sent a letter late Friday (July 31) to Speaker Nancy Pelosi and other Congressional Democratic leaders, urging them not to bring the Performance Rights Act to the floor for a vote.
Although the bill passed out of the House Judiciary Committee, more than 246 House members on both sides of the aisle signed The Local Radio Freedom Act, a nonbinding resolution that denounces any new performance fee, tax, royalty or other charge on radio for music airplay. In the Senate, 23 members have signed the resolution.
In the letter, the 22 Democratic members cite concern that the there has been inadequate information about the impact of the legislation on local radio broadcasters and the local communities that depend on the stations for jobs, news, weather and emergency information.
“We are further concerned by the assertions that this bill will unfairly divert money from our local communities and direct those funds primarily to the large record labels,” the 22 Democrats wrote.
UPDATE (6/3/09) from Digital Music News: House Majority REJECTS Performing Rights Act
UPDATE (5/13/09) from Billboard –
In a 21 to 9 vote Wednesday (May 13), the House Judiciary Committee voted to send the Performance Royalties Act to the full House for a vote. After a contentious three-hour hearing in which three amendments to the bill were offered, only one of the amendments — which reduced the fees to small broadcasters — was embraced.
In a surprise turn welcomed by broadcasters, rep. Maxine Waters (D-Calif.) reversed her support for H.R. 848. She acknowledged that she has been heavily lobbied by broadcasters as recently as Tuesday night (May 12), receiving phone calls from Salem Christian talk KKLA/Los Angeles, among other stations. She was concerned about the financial impact on broadcasters, in general, and minority broadcasters, in particular. Waters was in favor of one amendment offered by fellow Californian Daniel Lungren (R) that sought to delay voting on the Act by six months while a study on the economic impact of the measure was conducted.
For useful background information and a more fleshed out version of what you find here, check out IBMA’s writeup.
For full text of the proposed bills: click here
The Performance Rights Act of 2009 (“PRA”) would require, for the first time, traditional terrestrial radio stations (AM or FM) to pay a royalty when a song is played to the copyright holder of the sound recording for that song and to the performers of the song. Under current U.S. law both terrestrial (traditional) radio and digital broadcasts (satellite radio, webcasts and cable) must pay royalties to the holders of the copyright for the song and to the songwriter, but only digital broadcasts must also pay a royalty to the holder of the copyright in the sound recording and to the performers of that recording.
So basically only the owner of the publishing rights (songwriter and/or their publisher) gets paid by traditional radio for it’s use of the song, not the recording. Under US Copyright Law, the song itself (underlying composition) and the recording (the master) are separate copyrights. To those of you with a record deal, you’re masters are likely owned by the record label. To DIY musicians, you own both of those copyrights, so this applies DIRECTLY TO YOU. This law is trying to get radio stations to pay license fees to the owners of the sound recordings (which, I assume will be collected and distributed by PRO’s like ASCAP and BMI). So obviously this is a very important piece of legislation.
The PRA would:
1. Include terrestrial radio broadcasts in the existing statutory license system, i.e., require that royalties be paid to performers and holders of copyrights in sound recordings.
2. Remove certain regulatory burdens from terrestrial radio.
3. Create special provisions allowing small broadcasters with gross calendar year revenues of $1,250,000 or less the option to pay a flat $5,000 per year instead of the royalties otherwise due.
5. Create special provisions allowing public radio stations to pay a flat fee of $1,000 per year instead of the royalties otherwise due.
6. Create certain exemptions for religious and incidental use of music.
7. Create a per program license option for stations doing only occasional music broadcasts.
8. Confirm that nothing in the PRA is to harm the rights of songwriters or publishers of musical works.IMPACT TO THE BLUEGRASS COMMUNITY
- Artists and Record Labels. Bluegrass performers and holders of copyrights in sound recordings (e.g. record labels) whose music is played over terrestrial radio will benefit from the PRA by, for the first time, receiving royalties when their music is played. If the PRA passes, for the first time performers will receive royalties from both digital and terrestrial broadcasts, and as the reciprocity bar to receiving royalties for broadcasts outside the U.S. would fall, performers and sound recording copyright holders for the first time would receive royalties for airplay in other countries.
- Songwriters and Publishers. Bluegrass songwriters and publishers owning the copyright to songs would not have their rights changed by the PRA. They would continue to receive the royalties they currently receive.
- Bluegrass Radio Stations. Bluegrass radio stations and broadcasters would have to incur additional expenses to pay these new royalties to performers, but small broadcasters, public radio stations and religious broadcasters could take advantage of the special provisions outlined above reducing or eliminating the financial impacts.
- Bluegrass Fans and Consumers. For the bluegrass fans and consumers of music, the upside would be that their favorite artists will have a new revenue stream assisting them in continuing to make bluegrass music. The downside might be that the amount of bluegrass on terrestrial radio could decline if some programs are forced off the air due to increased expenses.
For more information, resources and for ways to express your opinion, be sure to check out the links in the IBMA article.
SOUNDEXCHANGE AND YOU
The IBMA has posted yet another great article that is extremely important for the Bluegrass Community.
If you are not already selling your music or promoting yourself in the digital space, DO IT. You are missing out on serious revenue and are risking falling completely into obscurity for no other reason than you didn’t put yourself out there. Everyone and everything is on the internet, and your music better be too if you plan on making a career out of music.
If you don’t know anything about how to receive royalties from your digital performing rights (for both the song and the master) or collection agencies like SoundExchange, then you better read the IBMA article by Shari Lacy.
[SoundExchange is] an independent, non-profit organization that licenses music for public performance by digital transmission. They collect the license fees and distribute royalties to those whose recordings are performed—specifically, the performer and the sound recording coypright owner (SRCO). SoundExchange is the only collective designated by the United States Copyright Office to distribute statutory royalties to copyright owners and performers (located under 17 U.S.C. 5 114 (g) (2).
Basically, a law called DPRA (Digital Performing Right in Sound Recordings Act) granted a performance right for the digital transmission of sound recordings. In the normal scenario, as written above, the sound recording itself (a separate copyrightable entity) does not receive royalty payments for terrestrial broadcasts (unless, of course, the bill proposed above passes into law). Thanks to DPRA, now sound recordings (as well as the underlying composition) get paid for broadcasts, but in the DIGITAL space only. It is a limited performance right for the copyright holders of the sound recording (most often the record label).
Most bands that sign major label contracts and some indie label contracts, sign away ownership of their copyrights for a length of time. So in most cases the SRCO is the label, but in situations where the performers have retained control of their copyrights—bands not signed to a label or those who have gotten their copyrights back—they become recipients of both parts of the SoundExchange royalty: as performer and as SRCO (Sound Recording Copyright Owner).
Basically, get yourself registered with SoundExchange so you can start receiving royalties that are owed to you. If you aren’t owed money (yet), then this is still a good thing to do to prepare to diversify your music’s potential revenue in the digital space. If the future is online, you need to be preparing for what the future of music has in store for musicians (bluegrass or otherwise).
For more info on registering or what Soundexchange is all about, be sure to check out the article that is abridged above. Very helpful information.
OTHER ARTICLES and PERSPECTIVES:
Brandi Heart – “Branding & Bluegrass Music: Confessions of an Armchair Marketing Guru” – 5/17
Mark Crawford – “Marketing Country (and Bluegrass) Music Online” – 5/28
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