Ben Sisario has an excellent article about the Internet Radio Fairness Act in the New York Times. I have to commend Mr. Sisario–he wrote a mistake-free analysis of the rights involved. That’s a first, at least for me. Never seen a journalist from outside the music business write an article about IRFA who took the time to actually understand the subject they were writing on.
You should read the article yourself but here are a few choice quotes that kind of sum up the attitudes of the IRFAs.
First we have an attitude check from the author of IRFA, Representative Jason Chaffetz, he from whose intellectual loins sprang this monstrosity. Given the inherent viciousness of the bill and the punishment it will exact from artists, musicians and background vocalists who don’t have the money to hire as many lobbyists as Google, Clear Channel, Sirius XM and Pandora–you won’t be surprised at this quote:
Representative Jason Chaffetz, a Republican of Utah who co-sponsored the bill, said in a phone interview that the bill was meant to encourage growth in the streaming business. But when Mr. Chaffetz, whose campaign committee has received $2,000 from Pandora, was asked to respond to complaints that the changes would hurt musicians, he could not resist taunting a bit.
‘The old-school dinosaurs are trying to help, but they’re stuck in the tar,’ he said. ‘They can go talk to the pterodactyls.’”
Really. “A bit”? And why should we “go talk to the pterodactyls“? Because an army of lobbyists are about to roll over us? Or because we don’t want to hand over money to a coalition of Big Tech and Big Media? (aka the Internet Radio Fairness Coalition)
And then there’s this very interesting quote from Clear Channel’s Robert Pittman:
“’It’s not so much about rates as about how much dollars you spend,’ Mr. Pittman said. ‘The amount of dollars to artists is rate times volume. If the rate suppresses the volume, there’s less money. If it encourages volume, there’s more money.’”
Now that’s a very interesting way to look at it–particularly if you are an FCC licensee (unlike Sirius or Pandora). Why is that interesting from an FCC perspective? Well, there’s this thing called payola. And if I were Robert Pittman, I would be much more careful what I said about “volume” (i.e., number of plays) increasing based on the payment of money.
Remember that Clear Channel and Sirius XM have been interested in pursuing direct licenses with indie labels–licenses that are designed to pay artists less money. As the Sirius CFO said of these direct deals in sworn testimony:
“Among other things, [labels] recognized that by entering into direct licenses with Sirius XM, they gained the potential for enhanced airplay and greater exposure for their recording artists.”
You know, if the royalty rate encourages volume, there’s more airplay and more money. For Clear Channel and Sirius–who control the airplay.
And then there’s this classic non-denial denial from Tim Westergren:
The music industry says that if Pandora needs to improve its bottom line, it should sell more ads. When asked to respond, Mr. Westergren makes a gesture of banging his head on a table.
“It’s an easy thing to say,” he said. “But no one has yet explained to us why Internet radio is under a different standard. No one responds to that fundamental premise.”
I’ll respond to it–because that’s the deal you made, Tim. After you got your panties tied so tight you were screaming. And now you don’t like the deal you made because you want to make more money off the backs of musicians.
So don’t say we don’t respond.
And if he doesn’t like the rates, why does he have to gut the Copyright Royalty Judges and all the other bad stuff in the Chaffetz bill? He and the Honorable Mr. Neanderthal Pterodactyl Hunter can legislate profits just fine without touching the judges.
But Westergren told Ben Sisario one other very important fact: “This is not an argument about going out of business.”
Thanks, Tim. I’ll hold you to that.
If you want to voice your opinion on IRFA, Senator Ron Wyden has a comment page on his Senate website click here.