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ASCAP Lobbies for Higher Royalties From Pandora, Spotify

Performing rights org lobbying for 'fair rates' from online services

Fast-multiplying streaming services are beautiful music to fans’ ears — but can produce earaches for some in the larger music industry.

Pandora, Spotify, Songza, Rdio, Slacker — to name just a handful, not to mention highly anticipated streaming entries from Google and Apple — are giving fans more low- to no-cost ways than ever to discover music. But these young services, still hammering out subscription and/or ad-supported business models, pay just a fraction of the royalties that music creators receive from more established media.

The American Society of Composers, Authors and Publishers is confidently balancing this two-sided story, embracing technology’s gift of greater access and still fighting for its members to be better compensated for their music. In February, ASCAP brought songwriters Josh Kear (Carrie Underwood’s “Before He Cheats”) and Dan Wilson (Adele’s “Someone Like You”) to perform and chat with members of Congress. The goal is to encourage legislative action on hiking payments to music creators.

“We are talking to Congress about getting fair rates from these online services,” says Paul Williams, president and chairman of the board at ASCAP. “We need to make sure that songwriters can make a viable living.”

Pandora has been lobbying Congress to pass the Internet Radio Fairness Act, which would reduce the already perceived low licensing royalties Web radio services pay. Pandora believes today’s rates are still too steep to achieve profitability, when measured against its current revenues.

“We are totally pro technology, and we love that people are continuing to feed heavily on this creative output,” says Williams. “But we do need to get the numbers up to what we believe is fair payment.”

He feels Congress is receptive, especially as ASCAP enjoys the support of high-profile members.

Williams likes to tell the story of singer-songwriter Bill Withers’ recent encounter with Congress. Withers pointed out that if the streaming situation continued, people writing songs will need day jobs, and “You don’t want Ozzy Osbourne working as your plumber,” Williams recalls Withers explaining.

Although ASCAP’s negotiations with Congress are still a work-in-progress, there is hope that some of the discord will go away naturally. If current trends hold with growing user bases, services may eventually charge higher ad rates and/or collect more in subscription fees, paying out fatter royalties in the process.

And there are musicians who fully support streaming’s agility in breaking songs to new fans on phones, tablets, connected TVs and more.

“The growing use of streaming music services has been instrumental for us to reach new audiences,” says Greg Lyons, drummer for the band Eastern Conference Champions, which landed on the “Twilight: The Eclipse” soundtrack and is recording its next album. “Even though the payout is far less than what you would receive from terrestrial radio … we can parlay it into growing our fan base, getting placements in film and TV and seeing bigger crowds on the road.”

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