On The New Copyright Royalty Board Rates [Blake Morgan]
Guest Post by Chris Castle on Music Technology Policy
MTP had a chance to catch up to Blake Morgan and David Lowery for an interview about the CRB rates announced yesterday. This is the first of the two posts with Blake Morgan, read David Lowery’s interview here.
MTP: How do you feel about the CRB decision in general as far as rates go?
While I’m happy the Copyright Royalty Board raised Pandora’s non-subscription royalty rate by 21%, I can’t celebrate fully. The fact that webcasting rates were cut by 25% makes this mostly a wash, and flies in the face of basic respect for music makers.
MTP: Was this more of a victory for the Pandora/Google MIC Coalition or for artists?
Overall, Pandora is going to have to pay 15% more than they have been paying, so it’s certainly not a victory for Pandora/MIC. Artists are going to get more, so that’s a win. However, it could have been a slam-dunk victory for artists, and I feel this is more of a squeaker.
MTP: Do you feel compensated for the value lost from the last CRB when Pandora got the CRB rates cut substantially? Do you think that the CRB had in mind restoring what was taken away the last time around?
It’s hard for me to climb inside their heads, but it does feel like the CRB decided to make a “some for them over here, and some for them over here” kind of decision. This is a significant cost increase for Pandora, but it’s still less then what we wanted––so it’s like the CRB tried to drive right down the middle. If they were trying to restore what’d been taken away last time, and that’s all, then that would be really disappointing to me.
MTP: How about no rate increases in the out years other than indexing to the Consumer Price Index? I saw someone online suggesting that essentially froze the 2016 royalty rate and just adjusted for inflation so that artists essentially would be paid 2016 value for the next five years.
Yeah, that’s a little how I feel. But, I hope it doesn’t matter because there’s such a strong possibility that Pandora won’t even be around in five years. At least if they continue to run their business the way they have been recently.
MTP: The press seems to always refer to the fact that Pandora “hasn’t turned a profit” yet, and tries to create this impression that Pandora is an otherwise well run company with $1.1 billion in revenue, zero debt, government mandated below market vendors, SG&A over 40% that’s going on an acquisition binge for unrelated businesses with no regard for integration costs—that also can’t manage to “turn a profit”. Does anything bother you about that press profile?
I have yet to meet a music maker who isn’t bothered by this. Far too many people have noticed that Pandora’s founder, Mr. Westergren, has bought and is building what’s being widely reported as a “massive” mansion, with 14 bathrooms. Not turning a profit? How full of shit do you have to be to need 14 bathrooms in your house, man.
MTP: What’s the reaction in the #irespectmusic community to this latest move by the MIC Coalition? Do the new CRB rates make getting a royalty for terrestrial more or less important?
Securing a terrestrial radio royalty for artists remains the singular issue in this fight for music makers’ rights and respect that everyone I talk to supports. They agree it’s embarrassing that we have to even talk about it, that it’s embarrassing for us as a nation to not have it, and it’s critical in winning. Simply put: it couldn’t be more important. It’s a century overdue, and it’s time to get this done for American music makers.