When two rational actors are economically interdependent on one another, disputes tend to get solved at a market clearing price. So it is with Global Music Rights and the goliath Radio Music License Committee that itself is a member of the even bigger goliath MIC Coalition. (My bet is that the Google-backed MIC Coalition is behind […]
The radio industry is about to learn what many others already have — when you push Irving Azoff, he pushes back. Usually harder.
After nearly two years of negotiations over licensing rates for radio song plays, the Radio Licensing Music Committee (RMLC) recently “ambushed” Global Music Rights (GMR) — the nascent U.S. performance rights organization launched in late 2013 by Azoff, in conjunction with MSG Entertainment and with former ASCAP executive Randy Grimmett at the helm — with an antitrust lawsuit filed in the U.S. Eastern District Court of Pennsylvania on Nov. 18.
That was followed by the filing, on Dec. 6, Daniel Petrocelli and his firm O’Melveny & Myers of an antitrust suit on behalf of GMR against the RLMC in the U.S. Central District Court of California. Petrocelli stresses that the suit is not retaliatory, but was filed to fight the RLMC’s “collusive tactics to depress [the] prices” that radio stations pay songwriters.
Azoff, the legendary artist manager who began GMR because he felt songwriters were getting shortchanged in performance licensing, tells Billboard that he takes “artist rights very seriously. I grew up around guys named Lew Wasserman[former head of MCA, now known as Universal Music Group] and Steve Ross [who created Warner Music Group], who taught me to respect talent. We feel that they [the RMLC] violated respect for talent. We didn’t start this fight, but we aren’t going away.”
The digital music era has seen no shortage of lawsuits over payment for songs — but the latest battle is poised to rock the industry.
Global Music Rights, a boutique performing rights organization, claims the country’s 10,000 radio stations are acting as a cartel to keep payments to songwriters artificially low, according to a complaint filed Tuesday in California federal court.
At the heart of the issue is how songwriters get paid when their music is played on a terrestrial radio station. Here’s how it works: Most rightsholders are represented by either ASCAP or BMI. Those organizations typically license music through “blanket licenses” covering their entire collections. Consent decrees issued by the Department of Justice decades ago in an effort to avoid antitrust issues require ASCAP and BMI to give a license to anyone who’s willing to pay for one.
Music industry heavyweight Irving Azoff launched GMR in 2013 in an effort to give elite songwriters another option and, hopefully, more money.
While GMR boasts songwriters behind hits by artists including John Lennon, Kenny Chesney and Drake, its roster of about 70 clients and 26,000 works pales in comparison to the combined 22 million compositions held by ASCAP and BMI — according to the complaint, that is by design.
“GMR has not accumulated and has no intention to amass the market power that other PROs have wielded,” writes attorney Daniel Petrocelli. “By keeping its catalog small and high-quality across the board, GMR is able to provide personalized customer service to its songwriters and keep the cost of those services low.”
GMR is now suing the Radio Music License Committee because it claims the group is ensuring there is no competition among radio stations in order to stifle the rates they pay to license songs.
“RMLC’s member stations are competitors,” writes Petrocelli. “Yet these ‘competitors’ created and actively participate in a ‘committee’ whose very purpose is to negotiate with PROs as a group and destroycompetition among them in the acquisition of performance license rates.”
For context–it is widely rumored that all the major labels are in the middle of renegotiations with YouTube. In the past, the labels and publishers have taken a big advance and looked the other way.
The founder of the astroturf-ish Internet Creators Guild asked why labels keep taking YouTube’s money if they think YouTube is so awful.
Good point, maybe they won’t. Based on artist reaction, Irving Azoff questions whether labels and publishers will refuse to renew licenses without significant change.
Labels made deals with @YouTube out of desperation. It’s pennies & whack-a-mole. How can labels renew YT deals with so much artist pressure?
— Irving Azoff (@irvingazoff) June 22, 2016
AZOFF SETS FIRE TO TWITTER, SPANKS YOUTUBE SOME MORE
Irivng Azoff has been beyond vehement about rallying artists together to take a stand against Digital Millennium Copyright Act (DMCA) and, therefore, YouTube; click here for more on that. As support for the cause continues to grow (Bruce Springsteen and Bruno Mars just jumped on board), he’s lunged fully into an epic rant on Twitter.
Scroll down to see his tweets in descending order.
Read the post in the Rumor Mill on Hits Daily Double.
Read companion post on MusicTechPolicy: “What If YouTube Licenses Went Away? Will Artist and Songwriter Opposition to YouTube Make it Easier for Labels and Publishers to Step Away from Licensing?”
Irving Azoff highlighted the gridlock on artist rights in Washington in his June 8 keynote at the annual meeting of NMPA, the music publishers trade association.
“The music industry has never been more powerful and popular and we as an industry have never done a shittier job of rallying together as one industry,” Azoff said. “We should work together to solve the root of the problem” — fair compensation.
“I had one artist who was making $450,000 a year between all of his royalties,” Azoff said. Now after the digital revolution, he is down to making “$40,000 a year.”
But he noted that digital services like Youtube, which have very nice executives working for them, say they are not making any money on their ad-supported services, Azoff noted. “How can you sit there and say we can’t afford a couple of hundred millions of dollars for your industry, when their market cap is worth a half a trillion dollars?”
Azoff noted that the industry has been operating under the consent decree since the 1941. “Anyone with sense would ask, why does the DOJ think we still need a consent decree,” he observed. “I think its deplorable.”
Finally, Azoff noted that no matter what role he played in the industry, as a manger, a promoter, a label executive, “If you do what’s right by the creator” — whether that’s the artist or songwriter — “it will eventually be right for your company as well.”
It would be nice if Google learned that lesson.