On the surface, two news stories from the US yesterday seem entirely separate: a Supreme Court decision regarding the legality of TV rebroadcasting service Aereo, and the latest congressional hearing into music rights.
For the most part, they are, although both are worth studying. Aereo? It was a startup set up to record terrestrial TV channel broadcasts, then make them available for streaming to customers who had cut the cords of their cable TV subscriptions, but couldn’t receive those channels through a traditional aerial.
The broadcasters sued, and yesterday were handed a big victory by the Supreme Court, which ruled Aereo illegal in its current form. “Aereo is not simply an equipment provider,” explained the ruling. “Aereo sells a service that allows subscribers to watch television programs, many of which are copyrighted, almost as they are being broadcast.”
The issue here – and this is where music industry lawyers’ ears prick up – is whether Aereo’s rebroadcasts constituted a public performance or not. The implications for other kinds of cloud storage service (music included) are now being picked over.
What has this got to do with radio royalty rates for music? Lobbying body MusicFirst linked the two stories yesterday, taking a potshot at broadcast body NAB, which was one of Aereo’s most high-profile opponents.
“As the NAB and its members toast their victory, they may find a sour taste as well. In their radio business, NAB members commit the exact sin that they condemn in Aereo – they use music as the foundation of their programming, yet refuse to pay the artists and labels who created the music a cent,” claimed MusicFirst’s Ted Kalo in a statement. “NAB members twist the copyright laws to deny creators fair pay just as Aereo did, only on a vastly greater scale.”
That’s partly what yesterday’s congressional hearing was discussing, with rightsholders urging AM/FM radio stations to pay music royalties, alongside arguments over whether the current compulsory licensing system for interactive radio should be reformed to allow more direct deals – something Pandora’s Chris Harrison drily noted may be tough for these services if rightsholders demand much more money: “I don’t think at 120% of revenue we can make it up on volume.”
But it’s the AM/FM issue that remains a hot potato: NAB published some research commissioned from Nielsen to claim that “radio is more highly correlated with song sales than any metric studied” – i.e. promotional value beyond royalties – while artist Rosanne Cash described this argument as “somewhat manipulative… I feel we end up subsidising these multi-million dollar companies”.