Music interests testify for quadrupled copyright royalties
Originally published in Current, March 16, 1998
By Karen Everhart Bedford
If music copyright holders get their way in a binding arbitration recently convened by the Library of Congress, pubcasters will have to pay royalties four times higher than the $18.875 million they paid in 1992-97.
In direct testimony presented to the Library's Copyright Arbitration Royalty Panel (CARP), the composers' reps--American Society of Composers, Authors and Publishers and Broadcast Music Inc.--argue that the field has become so commercialized that it's unreasonable for their affiliates to accept discount payments from public broadcasters. ASCAP is seeking $43.9 million over the next five-year license period and BMI, $34.4 million. The combined total is $58.5 million more than pubcasters say they are willing to pay.
CPB, PBS and NPR are jointly seeking to tie future license fees to program expenditures, which they assert have remained "essentially flat" during the past five years. Likewise, public radio and TV's use of ASCAP and BMI music has remained static or declined, they say. Pubcasters argue that the field's blanket license agreement should remain at $18.875 million in 1998-2002, or not exceed $19.8 million "if any upward adjustment is warranted."
"Public broadcasting is in all respects competitive with commercial broadcasting in market share, revenues generated, costs of programming and other relevant factors," argues ASCAP in its direct testimony. Moreover, the field has a "voracious appetite" for ASCAP's music. For testimony about trends in the field, the society called public TV historians James Day and James Ledbetter.
BMI also compares public broadcasting to the commercial industry in its direct testimony, and asserts that both PBS and NPR use sheafs of its composers' music. Economist Bruce Owen, an expert witness for BMI, testifies that public broadcasting's previous annual royalty payment of $785,000 is "so low as to be patently unreasonable."
Adam Jaffe, an economist who teaches at Brandeis University, weighs in as pubcasting's outside expert. "Any attempt to compare public broadcasting to commercial broadcasting on a revenue basis creates a classic 'apples and oranges' situation," he asserts. Since pubcasters can not pass on the costs of higher music rights in the form of higher prices, program expeditures should be the bellwether on which music fees rise or fall.
"No material adjustment in music fees is appropriate in today's climate, when program expenditures in public radio have been essentially flat for the past five years," argues Peter Jablow, NPR c.o.o., in his testimony.
The Library of Congress convened the proceeding after the parties were unable to negotiate a voluntary agreement last summer, marking the first time in 20 years that negotiations have gone into arbitration. Oral arguments in the case began in late February, and are scheduled to continue through June.
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Later news: In September 1998, the final decision-maker, the Librarian of Congress, adopted the royalty panel's finding: a 44 percent increase in CPB's payments for music.