The House Subcommittee on Communications and Technology, chaired by Rep. Greg Walden (R-OR), heard from a musician, broadcast and Internet radio providers, and representatives of the songwriting, record label, wireless and consumer electronics industries, about how advances in technology are changing the way Americans gain access to and consume audio content.
Recognizing the fast pace at which the audio industry is evolving, Chairman Walden outlined the many different ways audio content can be distributed. He said, “On the one hand, this means today’s songwriters and performers have a wealth of options for reaching music lovers. On the other, it means securing a critical mass of listeners may be harder as audiences fracture. Are artists liberated by the digital age or finding it harder to cut through the cacophony? Is it ironically easier to start a career but harder to make a living in the music business today? Is the pie getting larger or is everyone nibbling on each other’s slice? One thing is certain. Experimentation will be critical as new technologies challenge existing business models.”
House Commerce Committee Chairman Fred Upton (R-MI) added, "Not only has the ability to access a world of professional audio content gotten easier and more universal, the ability for people around the world to produce and distribute their own works over the Internet has changed major industries: music, journalism, and entertainment to name a few."
Cary Sherman, Chairman and CEO of the Recording Industry Association of America, echoed Upton and Walden’s comments. Sherman said, "The bottom line is that the music industry today has transformed how it does business, and we expect the industry to continue to evolve, enabling new artists to prosper and allowing consumers to enjoy their works in many different ways."
Radio broadcasters defended the value of their service and pushed for more FM chips in mobile devices, a defense that also implicates TV broadcasters' argument for their continued value in the face of the broadband wireless push. Emmis chairman Jeff Smulyan and Commonwealth Broadcasting president Steve Newberry pointed to broadcasters' emergency alert function as one of the big reasons radio receiver functionality should be included, and activated, in smartphones and other mobile devices. That "first informer" role is the same one TV broadcasters have used to argue for not pushing them off their spectrum in favor of wireless broadband. Smulyan and Newberry also echoed TV broadcaster arguments for how they can help relieve wireless broadband congestion, which is what is driving the FCC and Obama Administration to reclaim TV spectrum.
The big news of the day was a deal struck by Clear Channel and the Big Machine Label Group, under which Big Machine artists — including Taylor Swift and Tim McGraw — will receive royalties for their music played on broadcast radio. Under current law, broadcast radio stations don’t pay artists for music played over the air, but they do pay royalties for songs played via digital transmission.
“Congress has an important role to play in ensuring that singers, songwriters and other musicians are compensated fairly, both through combating online piracy and ensuring an equitable licensing and royalty system,” said Rep. Henry Waxman (D-CA), ranking member of the House Commerce Committee, at the panel’s hearing.
Radio executives say the broadcasters shouldn’t have to pay royalties because the over-the-air radio audience remains critical to artists’ success. They argue that Internet-based services like Pandora aren’t actually radio, so it makes sense that copyright laws apply differently. But, to recording artists and their representatives, the Clear Channel-Big Machine deal undercuts that argument and is a welcome development.
