ArtsWatch: Artists Call Pandora Unfair

Leading music creators oppose streaming radio service's push to reduce royalties
November 19, 2012 -- 7:57 am PST
By Philip Merrill / GRAMMY.com

In recent news ...

Musicians To Pandora: "That's Not How Partners Work Together"
As announced on Nov. 14, musicians from Bryan Adams to Zac Brown Band have come together, signing an open letter titled "A Musicians' Perspective On Pandora." Keeping the tone constructive and declaring themselves "big fans" of the online radio service, this unique group that includes 40 GRAMMY winners wants to know, "Why is the company asking Congress once again to step in and gut the royalties that thousands of musicians rely upon?" The stars are joined by music organizations musicFIRST Coalition and SoundExchange, and readers are encouraged to visit www.fairpayforartists.com for more information. Pandora's push for new laws to reduce its corporate costs began with September's introduction of the Internet Radio Fairness Act, and on Nov. 5 the service sued ASCAP for lower rates. This year's legislation could die quietly as the outgoing Congress brings its work to a close. But the coming year ushers in our newly elected Congress, and Pandora's push to cheapen Internet radio music is likely to re-engage in 2013. The letter from artists such as Maroon 5, Ne-Yo, Katy Perry, and Rihanna, said, "Congress has many pressing issues to consider, but this is not one of them." Supporters of fair pay for artists will need to continue to make their voices heard. MusicFIRST Coalition Executive Director Ted Kalo said, "We all want Internet radio to succeed, but it won't if it tries to do so on the backs of hard-working musicians and singers."

Information Industry Responds To Collection And Use Of Personal Data
On Nov. 8 the Congressional Bipartisan Privacy Caucus released responses collected during the summer from nine major companies in the information industry. The caucus was seeking to gain a more transparent understanding of the data brokerage industry, but eight of the responding firms denied they were data brokers. Explaining the purpose of its inquiries, the caucus noted, "Data brokers represent a multibillion-dollar industry, aggregating information about hundreds of millions of Americans from both online and offline sources, which they then may sell to third parties for targeted advertising and other purposes. Consumers often have little knowledge of the existence of these companies." For example, Acxiom was the only company to acknowledge that it performed data brokerage services and report how many consumers actually requested access to their personal information. The company, which maintains information on 190 million consumers, has received between 77 and 342 such requests annually. A separate noteworthy effort to develop public information on consumer privacy has been a multistakeholder series of meetings regarding mobile applications, organized by the Department of Commerce's National Telecommunications and Information Administration. A meeting and a briefing were held this month with an additional meeting scheduled for Nov. 30. This past August participating consumer groups expressed frustration over the need for better information. One challenge for the incoming Congress will be coping with the immense amount of information about the large amount of personal data that allows companies to better target consumers with advertisements and gives companies incentives to provide free content and services online.

China's Antipiracy Image Is A Moving Picture
The growing size of China's spending on intellectual property and its commitment to continue battling against its pirated goods market were extolled on Nov. 11 by State Intellectual Property Office Commissioner Tian Lipu. "To a large extent, China's intellectual property rights protection image has been distorted by Western media," said Tian. "China's image overseas is very poor. As soon as people hear China they think of piracy and counterfeiting." Other news highlights the nation's promising developments and huge market. On Nov. 6 online video giant Youku Tudou announced that its Sony Pictures deal means it now has distribution rights in place with all of the major studios for its Youku Premium online video service, which is currently supported by 2 million paying customers. Not to be outdone by this announcement, Youku Tudou's main competitor, Tencent, cited statistics to publicize its overall online video audience of more than 275 million viewers a month, outnumbering Youku Tudou's more than 266 million viewers. Meanwhile, the bigger news out of China is Xi Jinping's Nov. 15 elevation to general secretary of China's Communist Party, part of a leadership transition that occurs every 10 years and will include China's presidency when Hu Jintao hands over the reins in March.

RIAA Lists Legit Sites, Debunks Pirate Music-Buying Studies
In conjunction with the National Association of Recording Merchandisers, the RIAA launched WhyMusicMatters.com on Nov. 15, providing a one-stop guide to more than 50 legal online music services for U.S. consumers. American Association of Independent Music President Rich Bengloff said, "We applaud the Music Matters website as providing both education for fans and a guide to authorized services." Separately, on Nov. 12 RIAA Vice President of Research and Strategic Analysis Joshua P. Friedlander posted a blog providing a comprehensive review of studies that show people who steal music online also pay for more music than the average consumer. "Some commentary has misleadingly reported that people who use P2P services like BitTorrent buy more music than non-users, implying that there's some sort of causation," Friedlander wrote. "In reality, the comparison is unfair — what it's comparing is people who are interested in music with people who might not be interested at all. Of course, people interested in music buy more." He cited statistics showing that users of illegal music services spend approximately half of what the average music consumer spends.

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ GRAMMY.com and sign up for Advocacy Action E-lerts.

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