Music Business

A couple of weeks ago we highlighted a new feature that ASCAP was rolling out, it gives royalties to musicians for live shows. Today we have come across another company that aims to put money back in musician’s pockets. TuneSat was designed to help artist collect royalties for unlicensed music used on television.

Apple is planning to launch a free ad supported Pandora-like online music service in the first three months of 2013. Current negotiations with labels are focusing on differentiating features and how to share ad revenue. The talks could be completed next month according to Bloomberg.

Pandora and other online radio services operate under a compulsory license that governs how many times per hour an artist can be played, as well as, how often they can skip tracks. Apple is negotiating licensing deals with labels that would allow more flexibility and additional features including offline caching and earlier availability of new releases. [AlLindstrom]

Pandora isn’t the only one trying to reduce its payments to musicians and songwriters.  Right now, in a federal courtroom in Philadelphia, a consortium of more than 10,000 traditional radio broadcasters is taking legal action to reduce payouts to songwriters and publishers. And they’re focusing their guns on the smallest performance rights collector, SESAC.

Of course, traditional radio stations already enjoy free licenses on recordings.  But this would lower the licensing bill even further.  The action is happening the US District Court for the Eastern District of Pennsylvania, where the Radio Music License Committee, Inc. (RMLC) is arguing that SESAC is using loopholes to charge ‘exorbitant’ rates for performances of its songs.  This is an anti-competitive, anti-trust accusation, based on allegations that SESAC is unfairly leveraging its exclusive catalog rights to force higher payments on ‘must have’ songs.  ”We feel that SESAC’s pattern of increasingly exorbitant rates imposed on our industry without resort to a fair process has left us with no other alternative,” said RMLC chairman Ed Christian.

But wait: songs cost money, and songwriters deserve to get paid.  So can’t SESAC charge whatever it wants?  Not according to the RMLC: the ‘fair process’ is a reference to much larger collection societies ASCAP and BMI, both of whom are subject to agreements forged with the US Government, specifically ‘consent decrees’ with the Department of Justice.  SESAC, a privately-held, for-profit group, exists outside of those agreements, and typically forces higher payouts on stations as a result.

All of which means ASCAP and BMI offer cheaper and more predictable rates (which radio loves), while SESAC pushes – and wins – far higher rates (which of course, radio hates).

So why not simply skip the SESAC songs entirely?  After all, in a free market, if you can’t afford to play a song, then you wouldn’t play it.   But the RMLC argues that SESAC is purposely opaque about which songs it actually controls, and its catalog is easily mixed into broader station playlists.  That includes songs judged to be critical to station setlists, a situation that gives SESAC lots of leverage to secure greater licensing prices.

If successful, stations would further reduce their heavily-discounted licensing portfolio.  All of which raises questions about why radio stations need further breaks and government-brokered discounts.  According to the stations, it all makes sense in this economy…

“In recent years, the radio industry has faced a serious challenge in terms of restoring reasonable license fee levels during difficult economic times. The aforementioned ASCAP and BMI settlements achieved much in terms of placing the industry on a sound footing once again but SESAC remains an anticompetitive force in the industry. ” [DigitalMusicNews]

Taylor Swift has three of the Top 10 on today’s iTunes Singles round-down, including the top two, with Red slated for release next Monday (10/22). The country pop star owns the #1 (“State of Grace”), #2 (“I Knew You Were Trouble”) and #9 (“We Are Never Ever Getting Back Together”) slots. The rest of the Top 10 includes PSY’s “Gangnam Style” (#3), Ke$ha’s “Die Young” (#4), Maroon 5’s “One More Night” (#5), Adele’s “Skyfall” (#6). fun.’s “Some Nights” (#7), Rihanna’s “Diamonds” (#8) and Alex Clare’s Internet Explorer theme “Too Close” (#10). Jason Aldean’s Some Nights (Broken Bow), which came out today, tops the album charts, followed by the deluxe edition of Brandy’s Two Eleven(RCA), Mumford & Sons’ deluxe Babel (Glassnote), Anberlin’s Vital (Republic), thePitch Perfect soundtrack (UMe), Macklemore & Ryan Lewis’ The Heist deluxe edition (Macklemore), Mumford & Sons’ Sigh No More (Glassnote), animated Adult Swim Metalocalypse band Dethklok’s Dethalbum III (Williams Street) and the regular edition of Babel, giving the Mumfords three of the Top 10 albums. Props to Hits Daily Double