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Gray
Area
The
world of music publishing and licensing is profoundly arcane,
complex and frustrating. Before you doze off or decide to
turn the page, you should know that music publishing and licensing
control how a song gets from a composer’s brain into yours,
and how a recording travels from the studio into your iPod.
So it’s not unimportant stuff. And the rules are about to
change.
An explanation of the raw basics of publishing and licensing
would fill at least 10 Metrolands. And once you read
the whole thing, you’d be more confused than informed. Songs
are treated differently than the recordings of songs. For
recordings of songs, there are different rules for digital
and nondigital transmissions, and different rules for recordings
by themselves versus sticking them in a movie, and more and
different rules for making a copy of a recording versus broadcasting
the recording on the radio.
Things got this weird because the laws were developed iteratively
over time, as perceived needs arose, so what we’ve got today
is a dysfunctional patchwork quilt of quick fixes designed
to solve yesterday’s problems. The major law that controls
how songs can be used was created in 1909 to break up player-piano
roll-maker monopolies. Really! More laws were inserted over
the years as new technologies came along that scared Big Media.
Back in the day when the government cared about such things,
antitrust laws were used to control the behemoth royalty collectives
ASCAP and BMI, resulting in negotiated settlement agreements
that contained more and complex quasi-laws. And since nobody
was quite sure how these rules should apply to the Internet,
a whole raft of new laws were developed in the mid-’90s that
complicated things even further.
Amazingly, this big mess works—sort of. Music does find its
way into movies and into your iPod, and folks do generally
pay and get paid. But it is insanely complicated, irrational,
and often counterproductive.
Congress is starting to look into how to fix the problem,
how to streamline and simplify the rules. It will be a long
process, and lots of decisions are going to have to be made,
and the status quo is going to change drastically, for the
better or for the worse. The result will dictate how music
is made, performed, and sold in the future. We’re talking
about all the marbles.
Mary Beth Peters, head of the U.S. Copyright Office, got the
ball rolling a couple of weeks ago, with a statement to a
House subcommittee. While she clearly identified the problem
and listed a broad range of possible solutions, her main thrust
was scary. Her preferred solution was to allow music publishing
and licensing to be governed by “market forces.” This, of
course, is consistent with the general trend over the past
15 years or so to deregulate everything, to get the government
out of the commercial sphere. The market will provide!
Yes it will. The market has already provided us with Enron
and WorldCom. Thank you, market. What’s next?
The problem with Peters’ preferred approach is that the market
won’t provide, because there is no market! What we are talking
about here is how copyrights are governed, and copyrights
are nothing more than little government-created monopolies.
And as anybody who’s taken Econ 101 will tell you, monopolies
are great for the monopolist, and everybody else gets screwed.
Broadly speaking, if the government is going to create monopolies,
it also has to take responsibility for controlling them, or
we all get hurt. And Peters wants the government to walk away
from that responsibility.
It’s like this: Right now, if you want to release your own
version of a popular song, you can. That old player-piano
law provides that the songwriter has to give you a license
to release the song, so long as you agree to pay a statutorily
set royalty to the songwriter. Peters wants to abolish this,
so that if you want to release your version of a song, you
will have to seek the permission of the songwriter, and even
if the songwriter agrees to let you do it, the songwriter
can charge you whatever he wants to charge you. In other words,
the songwriter can exert his monopoly power over you. That’s
the “market” providing for you.
There is no current parallel for sampling recordings. If you
want to grab a little hunk of, say, a James Brown record to
stick into your song, you have to go ask permission of James
Brown’s recording company and James Brown’s publisher. And
they can just say no to your request, and if they say yes
they can charge you whatever they want. And, in my experience,
unless you can guarantee them sales of 50,000 copies of your
recording, they’re likely to say no.
There’s a disconnect between this current system and the real
world. Last year, the DJ Danger Mouse created a brilliant
album by mixing the vocals from Jay-Z’s Black Album
and the instrumentals from The Beatles (aka the White
Album). He called it The Gray Album. He couldn’t release
his masterpiece commercially because he couldn’t get permission
to use the Beatles’ instrumentals, even though he was willing
to pay them for the privilege.
This isn’t the triumph of the market, it’s market failure.
And the cost is borne out in the suppression of new creative
works, like The Gray Album.
Congress is either going to fix this or make it worse, and
it’s playing out right now. Watch this space!
—Paul
Rapp
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