ASCAP & BMI – Mining the WV Mountains for Royalties


So there I was minding my own business in an afternoon session of the Create WV conference, listening attentively at a panel called “Creating Places to Hang Out.” The premise is simple enough: How to create so-called “third places:”

“The places we spend our time away from work and home are important, especially to creative, New Economy workers. Whether it is for food, entertainment, or just a pleasant place to hang out, people are attracted to public and semi-public spaces to be around others, share ideas and dream up new opportunities.”

The panel boasted the proprietors of some of the very coolest places in WV, including the Cathedral Cafe in Fayetteville, WV (by the New River Gorge), the near-legendary folk/acoustic venue (and RoeDeo-RoadTested) Purple Fiddle in Thomas, WV, and the much-buzzed-about Cafe Cimino in Sutton, WV, population 993.

The discussion naturally turned to questions about what makes a “Third Place” cool and attractive, and what visitors/tourists/customers are looking for. Places that are dog-friendly. Places with books. Coffee available all the time. Comfortable places, nooks, and crannies. Oh, and people are looking for more live music.

And that’s when the entire conversation took a sudden left turn.

The answer from the panel: Chances are that you’re going to be hearing LESS music – both live and pre-recorded, rather than more.

Tim Urbanic of the Cafe Cimino then proceeded to tell a harrowing tale of harrassment from ASCAP and BMI….demanding copyright payments (both for piped-in music from radio stations as well as cover bands playing Eagles tunes) running into several thousands of dollars. Threatening lawsuits. And getting 10 calls in a row from BMI on a Friday night, the caller trying to overhear the live music being performed in the background to determine if it’s a song in copyright.

Astonishing. Unbelievable. And the facts – and tactics – confirmed by all of the other live music providers in the room.

So maybe all of the other doomsayers are right. If the PROs are trying to dig copyright coin out of the hardscrabble West Virginia soil, they must either be really desperate, or have built a scarily efficient enforcement machine.

Or both. So, my question: If enforcing the copyright rules for clubs, cafes, and stores is happening on this scale in lil’ ol’ West VA, how’s this playing in Austin, Nashville, and New York? Or Branson, Missouri, for that matter?

It should be noted, by the way, that ASCAP posted record revenues last year: $785 million, of which they paid out $680 million to their members. So I guess it’s working.

The Classical Convergence


Waking up from summer vacation…

Remember the car ad from a few years back? Special “Bob” lane on the highway and at the tolls, even a “No Parking – Except for Bob” sign. And the kicker – when “Bob” finally gets pulled over, the cop merely removes his sunglasses and says “Oh, it’s you Bob.” and lets our driver go.

There is a tale, perhaps apocryphal, that the “Bob” commercial was inspired by the legendary driving antics of Herbert von Karajan, who indeed had his own personal rules of the road (not to mention custom-built cars direct from the Porsche factory) during his salad days in Berlin. Of course, it meshed perfectly with von Karajan’s brilliantly-burnished reputation as the supremely talented, driven, impervious, willful, and accomplished Maestro to end all Maestros. Exceptional in all ways; a god among mortals. Now, fast-forward to 2007. Sir Simon Rattle, no slouch with the baton, is the kinder, gentler, face of the Berlin Philharmonic. But I doubt he has a “Singularly Simon” lane on the Autobahn. More to the point, the “Bob” ad comes to mind when I consider the changes – some would say crisis – wreaking havoc in the classical music world of today. It’s Topic A among any manager, agent, musician, administrator, (or even us hardy media producers) even remotely connected to the art form.

Earlier this summer the subject got a thorough going-over at Artsjournal.com with a “group blog” called Engaging Art: A Public Conversation, timed to coincide with the American Symphony Orchestral League (before they changed their name!) conference in Nashville, not to mention a new book called Engaging Art: The Next Great Transformation of America’s Cultural Life, edited by Steven Tepper and former NEA chief Bill Ivey.

As a public conversation, it’s pretty impressive stuff, with contributions from some of the industry’s heaviest hitters and deepest thinkers, offering opinions that range from brutally pessimistic to cautiously optimistic. It’s worth your time (and yes, it’ll TAKE time!) to read it all.

So what’s the verdict, and what does it have to with “Bob?” Reading through the anguish and the gallows humor, what emerges is that Age of Exceptionalism for classical music is over. The World (of music) Is Flat. Or, as the ever-salient Greg Sandow puts it, “..the arts don’t just represent art any more, since so much terrific art happens outside their boundaries. That makes the arts (as opposed to art) seem increasingly stale.”

Bingo! No more special lanes. No more customized parking spots….no more classical-music-only critics in Your Hometown Daily News for the 3 – 6 per cent of the population that attends classical music concerts. In the democratized world of iTunes, Bach, Beethoven, and Brahms need to compete with Beyonce, Bjork and the Notorious B.I.G..

Classical music is, in short, entering what Henry Jenkins of the MIT Media Lab describes as today’s “convergence culture:”” a new territory where old and new media intersect, where grassroots and corporate media collide, where the power of the media producer and power of the consumer interact in unpredictable ways.”

And that’s not necessarily a bad thing; it is, however, merely a game-changing, life-threatening disruption to the status quo. And while we’ve had our gaze upwards, watching what the ground tremors are doing to the mighty redwoods in
the forest, we haven’t looked closer to the ground, where there’s a riot of vitality, energy, and colorful new growth.

*Classical music accounts for 1-3% of sales in “traditional” stores: it’s 11% on iTunes.

*Just as an outsider – Apple & iTunes – re-shaped the recorded-music industry, MySpace (whose origins are far removed from the world of IMG and Columbia Artists) now has 3 million artist pages.

*The top “beach-listening podcasts” for the summer of 2007? Pat Conroy or Sue Grafton? Nuh-uh. Try “Pride and Prejudice” and a series called “The Classic Tales Podcast,” featuring works by Edgar Allen Poe, Arthur Conan Doyle and Thomas Hardy, on iTunes’s top 100 podcasts list. Who says intense listening to long-form artistic creations is dead?

*How about those 500-plus classical-music groups on Facebook?

*The record industry’s woes are well-documented, but what about the publishing industry? Last year ASCAP reported record revenues – and record royalty payments to its members, who divided up $680 million – a hefty 5 per cent increase.

*Finally, this vital statistic from the National Association of Music Manufacturers, who also reported record sales last year of musical gear, to the tune (sorry, couldn’t resist!) of $7.5 billion. The reason? According to their Harris-commissioned research, in 1997 about one in four Americans (24%) between the ages of 18-34 owned or played a musical instrument. In 2007, that number is now almost one in three – 32 percent!

What’s going on here? To be sure, this isn’t all due to the fact that kids putting down their Playstations and trudging over to the piano bench to learn Czerny etudes. But it does suggest that our commonly-taught and understood about the value, order, rank, and hierarchy of music – and music education – is being stood on its head. Henry Juszkiewicz, co-owner of Gibson Guitars, told the LA Times: “We are looking at the first creative generation,” “The cost of creative tools has gone down. And now you have the ability to share with other people your creation. These two fundamental, solid changes are allowing the younger generation to be actively creative .”

It could be argued, in fact that we are entering a new “Golden Age” of unprecedented access, discovery, and creation of music. Virtually the entire history of musical composition is only a few keystrokes away from the average American.

The dizzying pace of technological innovation has made the production and distribution of music similarly ubiquitous. “Mass Media” no longer means just mass consumption of content; it now represents mass creation.

So what about classical music, bent on teaching, preserving and showcasing starkly individual, timeless, and lofty musical ambitions? Will we be subjected to “Missa Solemnis Mashups?” That’s a scary thought to many. But we also have the potential now to perform a world-wide “Messiah meetup.” As it is today, people already line up around the block to do “Messiah sing-alongs.” Can you imagine staging a December event with Handel’s oratorio, arguably the most beloved (and certainly the most translated) work of Western music, using technology tools to make it truly a global mass-participation event? I can see the headlines now: “Handel Works Server Havoc: ‘Messiah’ Sing Meltdown.”

(Hey, I can dream, can’t I?)

But this is not to minimize, or trivialize, the challenge before the classical-music community. Once the “special lanes” are removed (and we are surely witnessing that on the fundraising level as well), the symphony orchestra, in the form as we know it today, may not survive my generation. In other words, Beethoven will still be around, but the context in how we hear, perform, and present Beethoven will be fundamentally altered in ways that we are just just beginning to glimpse. Strap in and hang on, because it’s going to be an exciting (and terrifying!) ride.

Lots more to say on this subject (the whole blog, really) but more about what’s popping up in the classical underbrush in coming days and weeks…


The Empire Strikes Back


The latest positioning tag line from The Globe (the new “Green” radio format in DC I wrote about a while back) is a little closer to the mark: “Corporately Owned, Listener Monkeyed-Around With.” Bad grammar aside, I’d argue that at least half that statement is factual – and it’s the corporate owners who have been doing the messing around recently – with three big news items in the last three days that suggest that the Old Order is not going to gently into the good night.

First was, the $12.5 million – in the words of FCC Commish Ken Adelstein “The largest collective fine in the history of American Broadcasting” that the Globe’s “good guy” owners CBS Radio (along with their friends Entercom, Clear Channel and Citadel Broadcasting) ponied up to the FCC to make the payola charges go away. Not that they actually admitted to it or anything. Sample grab from the Washington Post story:

Andy Levin, Clear Channel’s executive vice president, said in a statement that his company has “devoted tremendous resources” to preventing payola at its stations. “While no violations were found,” he said, “we are pleased to announce that Clear Channel has agreed to settle this longstanding payola investigation with the FCC. We believe it is time to close the door on this ongoing inquiry and move forward.”

The other three companies declined comment or did not respond to requests for interviews.

Aside from paying the fines to the FCC, the four companies have agreed to give about 4,000 hours of air time to small record companies and local artists. “This is a new opportunity for fresher, newer artists to be heard on the radio,” Adelstein said.

Right. Clear Channel pays $3.5 million to the Feds because they are doing their part to ease the budget deficit. And just where do you suppose those 4,000 hours of air time are going to fall? Sometime between midnight and six, do you suppose?

So, taking Mr. Levin’s advice, let’s “move forward:” Second was the Copyright Royalty Board ruling on Internet radio, which is similarly mind-boggling. Today’s Wall Street Journal has the most comprehensive story in the mainstream press about what this obscure Congressionally-charted agency has wrought: nothing less than a protectionist nod to those “good guys” in the above paragraph. You can read the entire report here. And it whacks public radio’s Internet music activities as well, which previously had been negotiated under a separate deal. Great. Take one of the few areas of growth and innovation in the broadcasting biz and make sure you suffocate ’em. THAT’ll show ’em! THAT’ll keep people tuned to my Clear Channel station! You need to be a subscriber to read beyond the opening grafs; here are a couple of key lines from the rest (hey, I bought my copy in the newsstand!)

…The board’s new rates appear to be those sought by the largest industry group, the Recording Industry Association of America. But the Internet radio broadcasters say the rates hit one of the few bright spots in the moribund music busienss and thus end up shooting the labels in the foot.

The new schedule highlights an inequality that has rankled many online entrepreneurs for years. Regular radio stations don’t pay any royalities to song performers for their over-the-airwaves broadcasts, although they do pay royalities to composers and songwriters. “It’s flat out unfair,” says Jonathan Potter, executive director of the Washington-based Digital Media Association.

How unfair? Under the old system, most Internet broadcasters could be a percentage of revenue – about 12% – to a copyright collection agency called SoundExchange. But no more. In it place: a new system where each station pays .0762 per listener, per song (retroactive to 2006) – a rate that will double in the next three years. Kurt Hanson’s Radio and Internet Newsletter has become sort of the “Central Command” for the Internet broadcasters up in arms about the ruling – and he says the new royalty schedule will mean his payments for his Accuradio service will balloon from $50,000 per year to about $600,000. Check out Bill Goldsmith’s blog at Radio Paradise for a reasoned, if impassioned view of what this means for the immediate future of his excellent service. Sample Grab:

The performance royalty rates released by the Copyright Board on March 1, 2007 are not just extreme, not just burdensome. They are a death sentence for all US-based independent webcasters like Radio Paradise, SOMA-FM, Digitally Imported, and many others…

Let’s reassess that reasoning in the light of 21st-century reality. Is there, in truth, a fundamental difference in the experience of an online listener to Radio Paradise and someone who was listening to identical programming on an FM station? Every one of our listeners – indeed, anyone who has ever clicked on a webcast as background music while working – knows the answer to that question. No! There is no difference whatsoever. Radio is radio, whether it comes in digital or analog form.

Just to underscore Goldsmith’s point, there are 50 million listeners in the US to online radio services (WSJ figures); 14 million to satellite radio. And is this happening because the publishing industry is broke? That brings us to news item number three: ASCAP Reports Record Revenue, Royalties in 2006. Yes, that’s right – record revenues. Highlights:
Overall revenue: $785 million – up 5 percent
Overall royalty payments: $680 milllion – up 5.3 percent
Payments by radio: $22 million – up 11 percent

And the kicker, courtesy of Digital Music News:

Meanwhile, ASCAP also gained $13.8 million from internet-based and wireless licensing agreements, a gain of 70 percent. The group is planning aggressive moves ahead, including a recent push to extract performance royalties from paid downloads. Predictably, that has drawn the ire of online music providers, represented by trade body DiMA.

Remember, that 70 per cent gain from internet and wireless providers came before the new Copyright rates were announced. Clearly the old system wasn’t working, eh?

Last word (for today at least) that wraps all three of these subjects together goes to Jerry Del Colliano’s Inside Music Media:

Hypocrisy #5 :

If everyone was so concerned with fresh music, new artists and the health of indie labels, they’d be fighting the new Internet royalty rates that threaten to impede the growth of Internet radio by charging small operators more money than they can afford to play the music.

Who is kidding whom? 8,400 half-hours when no listeners are listening to terrestrial radio or building Internet radio as the lifeline for music diversity.

Does anyone question the pervasiveness of the Internet?

Is it that hard to believe the Internet will be on everyone’s mobile devices once WiFi becomes universal?

If you’re with me so far, can you see the hypocrisy of letting four serial offenders of music diversity off the hook for chump change and a kiss on the backside while the big crybabies in the music industry try to get blood out of the one stone that will outlive them — Internet radio.