I listen to Pandora, and saw this story this morning: Pandora Sues Over Unreasonable Online Music Rates.
Do radio stations have to pay these fees? I knew that bars had to pay a fee for cover bands to perform copyrighted songs, but for playing the originals I would have thought that the artists would consider this free advertising.
In GQ instead of CS because it’s really a business question and not related to artistic aspects.
Yes, radio stations pay ASCAP fees.
The issue IIRC was that ASCAP saw an opportunity to milk the internet for a helluva lot more money. Plus, there was a basic hostility by music publishers to online radio stations.
Radio stations pay fees based on their demographics, their audience. What is the audience of an internet station? So the ASCAP fees were set so high that it pretty much closes the door to most internet businesses. License rates for radios were set by the government to solve the problem back when radio first began using copyright material in broadcasts, at a rate the broadcast radio could afford. Internet has not been as lucky. (Since then the music industry has realized that radio is a good medium to advertise music, and in fact often “pays” for play)
Plus, the danger is simple - much as the internet radio stations may claim they are for listening, it is simple to record what they provide - if you can’t trap the data stream, then there’s always the “analog hole” where you run the speaker out into a microphone in. Combine this with request lines, and an automated play format (no talking DJ’s messing up the intro) and you basically have a system for music on demand online for free. Even if there is no request system - if an online playlist is available, it becomes trivial to record hours of music and then chop it into the songs you want.
OTOH, why should an obvious business opportunity for online radio be hobbled by excessive fees set by monopolistic groups? Why shouldn’t they enjoy the same deal as radio?
Just a bit of clarification: ASCAP, BMI, and SESAC represent the composers and publishers of the underlying music. (A radio station would typically have to pay all three.) They do not represent the performers or record companies. Unless the artist also happens to be the composer of the song, the artist gets nothing from ASCAP. Typically, most composers sell the rights to their music to a publisher who then controls the music and collects the royalties, giving the composer a cut. So even if the composer was willing to perform their own song for free, the publisher would object to being cut out.
In the United States, terrestrial radio stations pay royalties only to the composers or publishers. They do not pay royalties to the performers or record companies (unless they also happen to own the publishing rights to the underlying music). Satellite and internet radio stations (such as Pandora), however, must pay a second tier of royalties that goes to the performers in addition to the ASCAP/BMI/SESAC fees.
But that’s also true of radio. Most have a headphone jack. In the past, many even came with a built in ability to record from the radio on these things called cassettes. And now, you can just use a digital recorder or your iPod.
Techncially true but when’s the last time you heard a song played on the radio end to end without a DJ voiceover, premature fade-out, or overlap to another song? None of those things on Pandora or Spotify.
Hmmm. The classic rock station I listen to here in Chicago pretty much plays songs without any of those “issues” as a matter of course, but it’s a very different audience than the pop stations.