Students Alex Foing and Megan Himel from the global entertainment and music business master’s program reflect upon the fourth of the Music Business Seminars, where they had the chance to listen to Don Gorder discuss the changes in the US music industry.

Since the dawn of time, the relationship between art and commerce has often seen troubled waters. We have gone through format changes, evolving paradigms, local to global, bottom to top, and from analog to digital. But in our era of digital consumption, there will always be two prevailing mechanisms that help steer the industry’s course: Legislation (the ability to protect and exploit ownership) and Technology (the vehicle used for distributing, sharing and monitoring). As long as the economics of art force it to be monetized, these two guardians will hold the power to bring about the industry’s flourishing or demise.
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Don Gorder visited Berklee’s Valencia campus in order to shed light on these two elusive shepherds of the industry. Don is well equipped to discuss these factors, and well-versed in music’s changing industry. He has both studied and practiced law, and now runs the reputable Music Business program at Berklee in Boston – a program which he founded in the early 90’s.

Taking us on a journey from the pre-1972 golden age to the current Napster era of litigation, Gorder’s informative talk underlined several characteristics unique to the American legal landscape. Delving into topics like “works for hire”, sound recordings, state laws vs. federalization, recent & historic cases, and termination rights – it’s safe to say much ground was covered.

However, we thought the most interesting topic by far was that of broadcast performance rights of sound recordings in the US. Or simply, the lack thereof…

You see:

The United States is one of a handful of countries that fails to protect the rights of performers. Artists are not paid when their recordings are broadcast via radio (including digital radio services, released pre-1972). This puts us squarely in a small minority, accompanied by countries such as North Korea, Iraq, and Iran.

That’s right, the US shares the same view as North Korea, Iraq, and Iran regarding a performer’s right to earn an income off of the performances of his or her audio recordings: none at all.

It’s key to note that this applies to Terrestrial broadcast performance rights for sound recordings (phonograms), and that composers and songwriters are in fact paid through respective collection societies even in the US. In plain English this means no royalties for Artist that have radio play, but songwriters do get paid (for composition).

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This is in contrast to the rest of the industrialized world, where more than 75 nations, including most European countries, agree to pay artists when their song is played.

Due to the US’s exclusion of these rights and royalties, reciprocity agreements inhibit American artists from collecting royalties on their songs broadcast in the EU. “This leaves tens of millions of dollars of royalties on the table annually rather than in the pockets of American artists” according to the Future of Music Coalition.

This is where Technology has transformed from a knight into a mercenary: he provides his services to anyone who wishes to employ him, regardless of ethics. It began with radio broadcasts, and hasn’t stopped despite many technological transformations over the years. Lady Legislation hasn’t helped much either. Although she has had many opportunities to protect performers from her high post, similarly to how she protects songwriters, she has failed to do so in the American Kingdom.

But a new wave of lawsuits have Lady Legislation and Technology the Mercenary taking the music industry on a wild ride.

In 2013, The Turtles launched a class action lawsuit against SiriusXM Radio for $100 million in California, New York, Florida, and the Federal court. SiriusXM distributes music digitally, but never paid any performance rights to The Turtles, despite the fact that post-1972 recordings are logged and paid for. The reason SiriusXM gave was that the rights of pre-1972 weren’t protected under US Federal law.

Before we go farther, we’ll note the fact that in 1998 the Digital Millennium Copyright Act was passed as an amendment to the 1909 Copyright Act. It protected the rights of performers, but only on digital performances, and only for post-1972 music. Two years later (2000), SoundExchange was established as the collection agency for non-interactive digital transmissions (like Pandora and SiriusXM). For non-interactive streaming (such as Spotify), companies are left to negotiate their own licenses.

Simply put, artists in songs released after 1972 get money when their music is played on a digital radio, but no payment on terrestrial radio. Artists of songs released before 1972 still get nothing from anyone.

A few months ago (September 22, 2014, to be precise), a California judge ruled in favor of the Turtles, and since Don visited us (on November 14th, to be precise), a New York judge also ruled in favor of The Turtles. You can check it out here.

The result of these rulings is that digital broadcast, and even non-digital (terrestrial radio) broadcasts should be protected and compensated. This opens the door for any artist from any time period to claim rights on all forms of broadcasting.

We see these rulings as extremely positive developments in the US environment. Lady Legislature is seeing how far she can stretch her reach, and it’s a potential game changer. We desperately want to see a favorable environment for artists to make a living off their art, rather than being exploited without rewards. And there’s no excuse now: Technology is sophisticated enough to track every song that is played – anywhere – and compile the data for collection agencies.

Wouldn’t it be incredible if Technology’s power were harnessed by Legislature for the good of the artist?

We think so too. Even better? Once the US collects money on radio performances, American artists will be able to take advantage of the reciprocity between the US and the EU; they will be able to collect royalties from European broadcasts of their music, money which is currently beyond their grasp.

Best of all, it would remove us from our current circle of friends (Iran and North Korea), and endear us to a more favorable community that consists of the likes of Sweden, Germany and Australia.

A huge thanks to Don for his wise words and opening our eyes!

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For more thoughts, check out this page.