ArtsWatch: MusicFIRST And CEA Pan Radio Royalty Proposal

NAB term sheet for radio royalties lays out broadcasters' hot buttons
November 01, 2010 -- 10:53 am PDT
By Philip Merrill /

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 @ and sign up for Advocacy Action E-lerts.

The National Association of Broadcasters Radio Board agreed on a term sheet on Oct. 25 for presentation to the musicFIRST Coalition, co-founded by The Recording Academy, as a way forward for broadcast radio to pay royalties to recording artists for the first time. The term sheet was ratified by the NAB's Board the following day. Although it was likely an achievement within NAB to reach this agreement, musicFIRST reacted negatively. MusicFirst advisor Tom Matzzie said, "The NAB's term sheet gives the idea of a sweetheart deal a bad name. It might even be worse for the music community than the status quo." The hot buttons that sweetened this proposal enough for the NAB to pass it include eliminating the Copyright Royalty Board from the rate-setting equation, lower rates that kick in if the NAB's wish of having radio chips installed on mobile devices does not come to fruition, simplified reporting requirements, and musicFIRST's "acknowledgment and recognition of the unparalleled promotional value of terrestrial radio airplay." Some observers see these terms as a proposal for broadcasters to give a little and get a lot, but many broadcasters are reportedly unhappy that the terms concede too much. Meanwhile, the NAB's vision of a mobile-device mandate for radio chips drew reaction from device manufacturers. On Oct. 26 Consumer Electronics Association President/CEO Gary Shapiro attacked the proposed mandate in a letter to the NAB and said, "Radio is a legacy horse and buggy industry trying to put limits on innovative new industries to preserve its former monopoly." Harsh words, but the underlying reality is just industry resistance to new costs, the same reality broadcasters are trying to mitigate. Meanwhile, recording artists have come closer to getting a fair shake than ever before, just as this Congress is about to wind down in its lame-duck session after tomorrow's elections. Performance Rights Act legislation is now pending in both chambers having cleared the House and Senate Judiciary Committees. The leadership of both committees first called for NAB and musicFIRST to enter into negotiations more than one year ago.

Another target for action by the end of the year is S. 3804, the Combating Online Infringement and Counterfeits Act, which was introduced in September and is still pending before the Senate Judiciary Committee. On Oct. 21 a unique group of leading brands joined with the MPAA, RIAA, the U.S. Chamber of Commerce, and the major record labels to send a letter to committee chairman and S. 3804 sponsor Sen. Patrick Leahy (D-Vt.). The letter said, "We urge you to continue to work with stakeholders to improve the bill and push for its enactment during the time remaining in the 111th Congress. We are also very grateful to the growing bipartisan list of senators who have co-sponsored this legislation to combat the use of the Internet as a platform to sell counterfeit goods and facilitate the digital theft of copyrighted works." Besides Leahy, half of the Senate Judiciary Committee is now co-sponsoring the bill. S. 3804 would put new tools in the hands of law enforcement and allow authorities to block the English-language Internet addresses of rogue websites that primarily traffic in piracy. Although these Web destinations could still be accessed via their IP addresses, the goal is to prevent rogue sites from deceiving the public into believing they are legitimate.

On Oct. 27 participants announced the launch of the Entertainment Identifier Registry (, a nonprofit global registry designed to catalog unique ID numbers for movie, television and other audiovisual content, led by a coalition including CableLabs, Comcast, MovieLabs, and Rovi. MovieLabs President/CEO Steve Weinstein said, "Most companies today are either using proprietary or disparate organic systems to catalog their entertainment assets, making the process of tracking content across multiple systems very difficult. EIDR can provide the missing communication link between businesses. We look forward to expanding EIDR membership to companies throughout the global content ecosystem...." Other participants supporting the standards-based effort include the MPAA, Paramount Pictures, Sony Pictures Entertainment, Universal Pictures, Walt Disney Pictures, and Warner Bros. Entertainment.

In the Netherlands a Dutch High Tech Crime Team partnered with other enforcement authorities and a local security company on Oct. 25 to capture the Bredolab botnet by infecting 143 of its control servers. A suspect was arrested the following day in Armenia and prosecutors believe additional arrests may be made. The botnet controlled a vast network of infected computers, which were rented out for activities such as sending e-mail spam. Affected computer users in many countries were redirected to a Web page informing them their computer had been infected by Bredolab and advising them how to clean the malware off their machines. This is a case of fighting hacking with hacking, because technically speaking, police infected users' computers, including computers in countries such as the United Kingdom where such a tactic is illegal — arguably beginning a new and controversial chapter of more aggressive cyber law enforcement.

Now that ISPs have begun sending out warning e-mails to online infringers in France, David El Sayegh, director general of the local record industry association Syndicat National de l'Edition Phonographique, estimates that content owners are notifying the HADOPI state agency of 25,000 acts of music infringement a day.

On Oct. 23 the World Intellectual Property Organization announced today's launch of a system allowing publishers to distribute versions of their print material to trusted intermediaries who will make modifications to support the needs of the visually impaired. The project is called TIGAR, which is short for trusted intermediary global accessible resources. Separately, WIPO is hosting a Nov. 4–5 conference in Geneva on copyright licensing, titled Facilitating Access to Culture in the Digital Age.


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