- NEWS RELEASE -
FOR IMMEDIATE RELEASE: MAY 11, 2007
CONTACT: RICHARD ADES OR
GREGG PERRY
202-640-5894
NEWS@xxxxxxxxxxxxxxxxx
Recording Artists Outraged at Money Grab
by Corporate Webcasters
Senate Bill Would Enrich Mega-Corporations Like Clear Channel and AOL
As Much As $100 Million at the Expense of Artists and Record Labels
WASHINGTON, DC - In a blatant attempt to strip artists and record labels of
their hard-won
royalties for the use of their sound recordings on Internet radio, proposed
legislation in the U.S.
Senate would not only invalidate the March 2, 2007 ruling of the Copyright
Royalty Board
(CRB), it would roll back by 70 percent pre-decision rates already paid by
webcasters.
An analysis by SoundExchange shows that the proposed rollback in royalties
would save big,
highly profitable corporations like Clear Channel, Yahoo!, AOL and Microsoft
$100 million or
more in royalty payments during the rate period 2006-2010, and that's only
if there is no growth
in listeners. However, expected growth in listeners during the period will
result in an even
greater windfall.
"This legislation is a money grab by big corporations like Clear Channel and
AOL at the expense
of artists and labels," said John Simson, Executive Director of
SoundExchange. "I don't see any
other way to characterize this as anything other than naked corporate greed.
It's just not fair to
artists."
Under the proposed legislation SoundExchange's analysis shows that, for
2006, $12 million in
royalties would have to be paid back to the 20 largest webcasters. By
contrast, under new rates
set by the CRB, those same webcasters would owe only $850,000 in retroactive
royalty
payments for 2006. The windfall to big webcasters is even more dramatic in
2007 when,
assuming no growth in listeners, the 20 largest webcasters would owe $24
million in royalty
payments, but under the proposed legislation, would only owe $5 million to
the people who
create the music upon which they build their businesses.
The legislation is being driven by the SaveNetRadio coalition. Though the
coalition purports to
represent some artists and some small webcasters, it is in fact funded by
the big webcasting
industry. Supporters of SaveNetRadio have been mislead into thinking that
advancing this
legislation would somehow help small webcasters and artists, when, in fact
it would give more
money and power to the big webcasting industry. "The fact that they would
advance the profitgrinding
agenda of big webcasters without regard to the artists they are hurting
speaks to
SaveNetRadio's true mission and evident hypocrisy," said Rebecca Greenberg,
National Director
of the Recording Artists' Coalition. "If SaveNetRadio really cared about
artists, they wouldn't
be fronting for the big webcasters like this."
Simson noted, "There are better, targeted ways to help the small webcasting
businesses without
resorting to selling out to the likes of Clear Channel." In fact,
SoundExchange has told Congress
that it is actively engaged in seeking business solutions that could
accommodate the needs of
small webcasters while protecting the hard-won, fair royalties that artists
deserve.
This bill, introduced in the House by Reps. Jay Inslee (D-WA) and Donald
Manzullo (R-IL), and
now in the Senate by Sens. Ron Wyden (D-OR) and Sam Brownback (R-KS), would
arbitrarily
reverse the painstaking work of the CRB, the three-judge panel created by
Congress at the
request of the webcasters three years ago. The CRB panel listened
exhaustively for 18 months to
all interested parties, heard from dozens of witnesses in weeks of live
hearings, read countless
depositions and examined tens of thousands of pages of evidence focused on,
among other
things, the services' ability to pay and the value of music in the
marketplace. In contrast, the
proposed bill presents no factual or economic basis for rejecting the
reasoned decision of the
CRB. This legislation, if passed, would come at the expense of hard-working
artists, who, on
average, received just $360 each in royalties from webcasting in 2006.
"Asking Congress to override a valid, objective process that Congress
created while arbitrarily
dismissing the painstaking work of these expert judges who clearly
determined a fair rate for
artists and labels that these webcasters can clearly afford makes no sense,"
added Simson.
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