Amos Biegun, CEO of Counterpoint Systems and a 20-year veteran of the music industry, has taken a fresh look at the Performance Rights Act, a senate bill spearheaded by Senator Patrick Leahy that has spurred an onslaught of controversy between performing artists and U.S. terrestrial broadcasters.
Biegun, whose company supports over 300 music publishing and record labels worldwide with copyright, licensing and royalties software solutions, says, “We have seen the business of music change dramatically over the years but the issue of artist compensation is not a new one. The Performance Rights Act has been swirling around Washington in a variety of forms since the turn of the century. What have changed are the methods of distribution being used.”
While artists once depended heavily on radio play for promotions, the advent of the internet changed the dependency between artist and broadcaster significantly. According to the 2010 Digital Music Report, issued by International Federation of the Phonographic Industry (IFPI), there was a 940 per cent growth in revenues generated from digital sales over the last five years. “The increase in online sales has given performing artists more fuel to their fire and they’re demanding radio broadcasters adopt the same modus opérande as their online counterparts who pay artist royalties through their labels.” Although the jury is still out on how much revenue will actually be derived from broadcast royalties, the U.S. Government Accountability Office (U.S. GAO) estimates that artists like Lady Gaga could stand to earn upwards of $400,000 alone for her song, “Bad Romance,” if Congress enacted the legislation. Other lesser-known artists might not fare as well. According to the GAO, less than six percent of artists would receive $10,000 or more per year in royalties from airplay in the top 10 markets—these generate about 21 percent of industry revenues.
Still, the battle goes on. Coalitions like musicFIRST, believe "It's unfair, unjustified and un-American that artists and musicians are paid absolutely nothing when their recordings are played on AM and FM radio,” according to their Executive Director, Jennifer Bendall. She, along with thousands of supporters, are lobbying hard for the legislation to pass, pointing out that PRA’s passage would bring the United States in line with almost every other nation in the world (China, Iran, and North Korea are currently the only countries that do not provide a fair performance right on radio). They further explain that because the U.S. doesn't have a performance right, foreign stations do not have to pay American artists when their music is played on stations around the globe, an inequity [they claim]that costs American artists tens of millions of dollars each year.
On the other side of the argument, U.S. broadcasters are claiming the royalty fees dictated by the PRA would be too burdensome and would shut down small, local radio stations. They claim that fees already being paid by internet, satellite and cable radio stations have caused the untimely demise of more than one service provider since it went into effect in 2002 and that this new tax on radio stations would be paid directly to the recording industry. Jesse Walker of ReasonOnline also pointed out recently that the fees themselves aren’t the only costs that this bill would impose on radio stations. He cites Warren Kozireski, president of College Broadcasters Inc., who recently complained on his organization’s website that “the extensive record keeping requirements that will be required by the Copyright Royalty Board alone will add hundreds, if not thousands of dollars to the true cost of a performance fee.” It’s relatively easy to do that book-keeping if you have a narrow playlist and rarely deviate from it, as is the case with most large commercial radio stations. But if you have a library of thousands of albums and 45s, many of which were never reissued on CD, and if you allow your DJs to choose which ones they play—or even to bring in still more music from their personal collections then tracking the data suddenly becomes a full-time job.” And, depending on its size and audience, different annual rates will apply for each station.
“Both sides have compelling arguments,” says Biegun. “Deciding what is fair and unfair is something I am not capable of judging,” he continued. “However, what I do know is that, if passed, the legislation will provide a three-year window for implementation, more than enough time for solid systems to be put in place for tracking, calculating, and allocating royalty payments to labels and artists, whether it’s for $1 or $100,000.” Biegun’s company, Counterpoint Systems, is only too familiar with music royalties and supports sister industries such as filmed and television entertainment and licensing. “After our 23-years of developing solutions for rights and royalties, I think we’ve seen it all – and have developed solutions for almost every type of contingent compensation scenario.” The easy part for us is calculating royalties, the hard part for the rest of the world is figuring out who gets what corner of the dollar.”
About Counterpoint Systems
Counterpoint Systems provides specialist rights and royalty management software for the music, entertainment and brand licensing industries. We help our customers track rights relating to their intellectual property, such as feature films, television programs and formats, songs, sound recordings, games, characters and entertainment or corporate brands. We also help customers calculate participations and royalties associated with the content they are exploiting, and managing all the financial aspects of their rights and royalties business.
Counterpoint Systems’ headquarters are in London, with a US office in Los Angeles. Counterpoint has over 430 clients in 24 countries, in the media and entertainment, music publishing, record label and distribution, and brand licensing/merchandising industries. Counterpoint has developed specialist products for each of these industry areas, which means that we offer best of breed solutions to the industries we service.
For more information, visit www.counterp.com
Contact
Lorie Raileanu
+1 (424) 270 8520
lraileanu@us.counterp.com