Sony and Universal agenda ‘a huge threat’ despite indies’ US licensing victory, says Mills

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Beggars Group boss Martin Mills has spoken of his delight after the US Register Of Copyrights effectively dismissed calls from Sony and Universal for a variable royalty rate for internet radio play.

But Mills has also warned that the world’s two biggest record labels will continue to lobby for a split Webcasting IV rate, which – as explained on MBW earlier this year – could potentially see major labels automatically paid more than independents for plays on services such as Pandora and IHeartRadio.

That’s something British exec Mills, whose company is currently enjoying worldwide success with Adele’s 25, believes is a “huge threat for artists and labels as a whole”.

Pandora appears to be in full agreement with Mills – perhaps fearing that paying the majors more would be bad for business – and has come out strongly in favour of of a single rate model.

The US Copyright Royalty Board (CRB) referred the question of split Webcasting IV rates to the Register of Copyrights, Maria Pallante, in September.

“This is excellent news for indies. But the danger remains for the future. The fact we have the two largest labels arguing their music worth more than anyone else’s because of their scale remains a huge threats to the interests of performers and labels as a whole.”

Martin Mills, Beggars

The CRB asked Pallante whether they were prohibited by existing statutes from setting rates and terms for music that may differ across different types of categories of licensors.

Essentially, that would mean setting statutory US webcasting royalty rates that varied depending on the identity or category of the record company that owns the recordings – very likely, ‘major’ or ‘indie’.

Sony and Universal have apparently lobbied for this step, but on Tuesday (November 24), Pallante concluded that the question ‘was not properly referred to the Copyright Office for consideration’, and therefore she could not offer an opinion on the matter.

She further stated that because all participants in the Web IV proceeding had assumed a non-differentiated rate structure for licensors, the only reasonable outcome in the Web IV proceeding was the continuation of a single rate.

“This is excellent news for indies, through A2IM, and performers, who argued jointly against this possibility, in that it maintains the essential level playing field in collective licensing, and avoids a costly administrative nightmare,” said Mills.

“However, the danger remains for the future, and the fact that we have the two largest labels arguing that their music is worth more than anyone else’s simply because of their scale remains a huge threat to the interests of performers and labels as a whole, and to principles of fair treatment within the industry. “

“We are very pleased to see this door being shut by the register… the possibility of a webcasting market governed by a regime based on discriminatory dvisions favouring two mega companies was a truly awful thought.”

Charles Caldas, Merlin

The next big statutory licensing decision in the US is the 2016-2020 per-stream rate for all labels from US webcasting companies such as Pandora, which will be set by the CRB in mid-December.

Pandora supports a uniform rate structure for all musicians, said Dave Grimaldi, director of public affairs at Pandora, adding: “We look forward to the certainty the CRBs December decision will bring to the music industry, particularly as Pandora continues to improve our partnerships with music makers.”

Merlin, the commercial body representing over 20,000 labels including Beggars, [PIAS] and Secretly Canadian, echoed Mills’s comments.

CEO Charles Caldas said: “We are very pleased to see this door being shut by the Register, and applaud the efforts of the US performer groups and A2IM in powerfully arguing their point.

“The possibility of a webcasting market governed by a regime based on discriminatory, arbitrary divisions favouring two mega-companies over everyone else was a truly awful thought, both regressive and impractical.

“In this day and age, and this week in particular (!), it should be clearer than ever that independents and their artists can no longer be considered of inferior value.”

A2IM Vice President/Interim President Molly Neuman added: “This is a win for independents everywhere, including the artists and the independent publishers who stood with us on this issue. However, the battle for a fair and equitable licensing system continues, as long as the multiple rate question remains unsettled for future proceedings and companies like Sony and Universal work towards getting government to enshrine an unfair advantage for just the biggest companies.”Music Business Worldwide

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  • Juan Lauda

    One law for the major corporations. Another for the rest of us. What’s new about that?

  • Timothy Damion Hardin

    the problem for all musicians that are signed with the major labels is that the independence agreed to a substandard rate that might drag down the rates of the artist signed with the major labels because of this one rate decision….that leaves the platforms in a position to negotiate with the weak the lowest rates possible and then hold the strong to those standards effectively dragging down the value of music even further.
    Thiss shows that the technology platforms have creators in a corner….nobody’s even talking about it in the correct viewpoint

  • AJ

    sorry but i see it as one company spends much more than a group of idependents. it also employs thousands of people. therefore I see nothing wrong with them getting a larger share. not based on “value of artists”, but as a result of amount of investment.