Music industry wants performance compensation from iTunes
A consortium of music industry groups has begun lobbying the U.S. Congress to receive what they believe is their fair share of revenue from online music sales services like Apple's iTunes.
In a new story from CNet, music industry representatives plead their case as to why they are entitled to revenue for downloads of films, TV shows, and 30-second song samples that feature their work. Songwriters say they do not receive enough revenue from the Web to live off of, and they believe they are owed a larger share of sales.
With regards to the 30-second samples shoppers can stream before the buy, industry officials believe they should be paid a "performance" income from Apple, much like when a song is played in a public venue like on the radio or at a sports game. It's the same situation, they say, for movies and TV shows that feature licensed music.
Because negotiations have apparently not produced results, the music industry has reportedly begun to lobby Congress. Their goal: Anyone who sells music, movies or TV shows online would be required to pay a performance fee with that transaction.
"If you watch a TV show on broadcast, cable or satellite TV there is a performance fee collected," David Israelite, president and CEO of the National Music Publishers Association, told CNet. "But if that same TV show is downloaded over iTunes, there's not. We're arguing that the law needs to be clarified that regardless of the method by which a consumer watches the show there is a performance right."
Israelite said that composers and songwriters are traditionally paid not only for the rights to a song when it is included in a movie or TV show, but also a performance fee from the networks or studios.
However, there is a question as to whether an online download could be considered a "performance." After all, there is a difference between a publicly or widely broadcast piece of content, and one simply used in a person's home for personal use, argued Jonathan Potter, executive director of the Digital Media Association.
"They are picking on Apple because they say Apple is making a bundle of money," Potter said. "But these companies should be thrilled that Apple and the other services are selling music and generating millions, maybe tens of millions, in royalties."
Earlier this year, iTunes went DRM free after the largest music labels -- Universal Music Group, Sony BMG, Warner Music Group and EMI -- conceded to Apple's requests. In exchange, Apple allowed variable pricing on iTunes songs, ranging from 69 cents to $1.29.
iTunes has had its share of troubles with content providers in the past, most famously NBC Universal, which pulled its television content from the online store in 2007 after a feud with Apple over pricing structures. A year later, the two companies were able to work out an agreement, offering high definition content for $2.99.
In a new story from CNet, music industry representatives plead their case as to why they are entitled to revenue for downloads of films, TV shows, and 30-second song samples that feature their work. Songwriters say they do not receive enough revenue from the Web to live off of, and they believe they are owed a larger share of sales.
With regards to the 30-second samples shoppers can stream before the buy, industry officials believe they should be paid a "performance" income from Apple, much like when a song is played in a public venue like on the radio or at a sports game. It's the same situation, they say, for movies and TV shows that feature licensed music.
Because negotiations have apparently not produced results, the music industry has reportedly begun to lobby Congress. Their goal: Anyone who sells music, movies or TV shows online would be required to pay a performance fee with that transaction.
"If you watch a TV show on broadcast, cable or satellite TV there is a performance fee collected," David Israelite, president and CEO of the National Music Publishers Association, told CNet. "But if that same TV show is downloaded over iTunes, there's not. We're arguing that the law needs to be clarified that regardless of the method by which a consumer watches the show there is a performance right."
Israelite said that composers and songwriters are traditionally paid not only for the rights to a song when it is included in a movie or TV show, but also a performance fee from the networks or studios.
However, there is a question as to whether an online download could be considered a "performance." After all, there is a difference between a publicly or widely broadcast piece of content, and one simply used in a person's home for personal use, argued Jonathan Potter, executive director of the Digital Media Association.
"They are picking on Apple because they say Apple is making a bundle of money," Potter said. "But these companies should be thrilled that Apple and the other services are selling music and generating millions, maybe tens of millions, in royalties."
Earlier this year, iTunes went DRM free after the largest music labels -- Universal Music Group, Sony BMG, Warner Music Group and EMI -- conceded to Apple's requests. In exchange, Apple allowed variable pricing on iTunes songs, ranging from 69 cents to $1.29.
iTunes has had its share of troubles with content providers in the past, most famously NBC Universal, which pulled its television content from the online store in 2007 after a feud with Apple over pricing structures. A year later, the two companies were able to work out an agreement, offering high definition content for $2.99.
Comments
"They are picking on Apple because they say Apple is making a bundle of money," Potter said. "But these companies should be thrilled that Apple and the other services are selling music and generating millions, maybe tens of millions, in royalties."
I think that the artists should be more concerned with youtube (and sites like vixy.net) then with iTunes playing a 30 second sample, and actually selling their work for a fee.
I swear that greed rules these people.
If you don't like something, get the Government to put there nose in it.
I'm all for asking for what's fair. But unless I'm misunderstanding this, it doesn't make a lot of sense.
And if you go to Barnes & Noble, you can listen to the music before you buy. Do they pay a performance fee?
When I buy or rent a DVD the same laws that govern those should apply to downloads of movies whether on NetFlix or from iTunes.
I think that the artists should be more concerned with youtube (and sites like vixy.net) then with iTunes playing a 30 second sample, and actually selling their work for a fee.
Exactly. Remember that Apple is the first company to really offer a legitimate alternative to the torrents. How much money were they artists making on THAT? I have heard torrent users who explained how they were doing the artists a favor by listening to the music (without paying) because it was like free advertising. That kind of advertising is bogus. The 30-second preview is not.
But no one is doing that 30-second sample as an alternative to buying the song. There's no song that you intend to buy, which you're content to just preview over and over. That's like publishers saying you have to pay to check out what the back of the book says. That's the universal freebie they have to get you to purchase.
I'm all for asking for what's fair. But unless I'm misunderstanding this, it doesn't make a lot of sense.
And if you go to Barnes & Noble, you can listen to the music before you buy. Do they pay a performance fee?
You're all focusing on the 30-second samples, but the case also encompasses full downloads. The 30 second samples are long enough to be included in, for example, a television advertisement.
This also gets back to the fact that Apple needs the music providers just as much, or more than the music providers need Apple.
And I suspect they're not getting anything from DVDs, but are going only after iTunes, because they think they can make it sound like a broadcast... That's pretty absurd.
And about the 30s samples? Again, they should look into their iTunes contracts. If artists don't want to do it, fine, let's see where their sales go.
It's amazing how much the market can sort out on its own...
The record companies no longer have to pay for distribution
The quality of the music I buy on line is lower than that of 20 years ago.
Yet the price is still the same as physical media and in some instances more expensive
Now they want to charge for a preview
Someone is making more money somewhere and supposedly it isn't the artist!
It's way past the time for the record companies to stop whining and develop a model that actually encourages more on-line sales, with better quality and fair pricing
Stuart
I really hope Congress disregards this. Utter greed.
I certainly cannot get behind performance fees attached to 30 second sound
snippets as the intent of such snippets is to create an urge to purchase.
However on downloaded TV shows and the like they have a more legitimate (IMO)
because they would often have performance fees attached to broadcasted shows.
I think there is room here for negotiation but asking for fees to be attached to what is
tantamount to advertising really looks bad.
"...industry officials believe they should be paid a "performance" income from Apple, much like when a song is played in a public venue like on the radio or at a sports game. It's the same situation, they say, for movies and TV shows that feature licensed music."
Talk about killing your free advertising!
You got to get people hooked on your music so they will want to buy it to listen to it over and over and whenever they want too.
Instead labels want to charge everyone, when instead they should be happy they get free publicity/sales. There is a huge flood of good music, the labels really have no room to bargain.
I got people wanting me to DJ my nice sized (paid for and highly organized) music collection for bars and parties, etc. Great music most people haven't even heard before by famous artists.
But the threat of somebody snitching me off to the labels and the large and complicated fee's they charge can't be offset by what people can afford to pay for my time and effort.
You want to know why one hears the same crap played over and over on the radio?
Now you know. The labels, the RIAA.
DJ's hands are tied by the bean counters because of the greedy labels who need even more and more cocaine.
You're all focusing on the 30-second samples, but the case also encompasses full downloads. The 30 second samples are long enough to be included in, for example, a television advertisement.
This also gets back to the fact that Apple needs the music providers just as much, or more than the music providers need Apple.
Sorry. I am indeed. It sounded like that's what this was about, though.
And if you go to Barnes & Noble, you can listen to the music before you buy. Do they pay a performance fee?
Actually I believe it is the other way around. or used to be when the samples were limited. the labels had to pay to be included.
perhaps that is what itunes should do. drop all previews and make the labels pay to have songs clipped for such means.
on the flip, I do agree that perhaps the songwriters should get the same performance pay from a tv show or movie download that they get when it is aired in theatres and tv (and I think they get it for home video sales as well) but they need to address that issue with the studios who were careful/less over putting said issue in the contracts. similar issues have come up with writers and actors in recent months so they can use that as a guide to proceed
Whoops.