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Arbitration panel hears artists on Internet royalties

WASHINGTON — Nashville icon Harold Bradley didn’t even need his guitar Monday to strum a hit tune for a U.S. copyright arbitration panel going about the controversial task of setting an initial royalty rate for music streamed on the Internet.

Bradley, who has cut records with such legends as Elvis Presley, Patsy Cline and others for more than 50 years, said the new performance royalty is a much-needed stream of revenue for recording artists, rectifying the mistake made when it was determined that radio stations didn’t have to pay royalties to labels and artists, only to songwriters and publishers.

‘Fell through cracks’

“This is the right thing to do,” Bradley said. “Radio just fell through the cracks.”

The session musician is believed to be one of world’s most recorded guitarists. He’s also vice prexy of the American Federation of Musicians.

Chirping harmony during testimony earlier in the day was recording artist Jennifer Warnes, known for her rendition of :”Dirty Dancing” theme song “(I’ve Had) The Time of My Life”

What you will do will affect so many lives,” she said. “I woke up crying this morning (remembering) the generation before us — Billy Holiday, Janis Joplin — because the money was too low, the work too hard.”

Appearance of recording artists breathed some life into an otherwise legal-centric proceeding, which has pitted the major labels against the big broadcasters and Webcasters. The two sides were unable to settle on a rate, requiring the costly arbitration.

The Recording Industry Assn. of America, which represents the major labels, will split the new sound recording royalties 50-50 with artists. Of the half going to musicians, the featured artist will keep 45%, with the other 5% split evenly between backup musicians and backup vocalists.

While artists have lined up with the RIAA on this issue, Warnes also made it clear in her testimony that major labels often hoard profits. Nevertheless, the arbitration panel shouldn’t ignore the fact that artists, too, will benefit from the new royalty, she indicated.

Change of pace

Attorneys for Webcasters and broadcasters rolled their eyes during Warnes’ emotional testimony, but it was clear that the three arbitrators were happy to hear from real-life artists vs. the teams of legal representatives crowding into a small, cramped room at the U.S. Library of Congress.

Bradley, who played on such hits as Cline’s “Crazy” and Loretta Lynn’s “Coal Miner’s Daughter,” particularly seemed to wow the three arbitrators, offering a quick history of his very long presence in the Nashville music scene.

The guitarist said there is no question the music biz is an unforgiving one, and that the new royalty is critical.

All along, Webcasters and broadcasters have argued that the major labels are being greedy, and that artists can’t be sure they’ll even see any of the royalty money.

Roughly speaking, Webcasters want the royalty rate set at 0.014% per song, or about 1% of a Webcaster’s annual revenues.

The RIAA wants the royalty rate to be calculated at 0.4¢ per song, or about 15% of a Webcaster’s revenue.

Ironically, AOL Time Warner is fighting the battle on both sides of the aisle. Warner Music Group, parent of Warner Bros. Records, is a member company of the RIAA. AOL Music and one of its divisions, Spinner.com, are lined up with the Webcasters.

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