The controversy over the copyright of digital music through Pandora Radio

Music copyright seems to be perpetually fraught with controversy. The uproar over Pandora's authorization bill, to maintain the 1.85% authorization rate curtain. However, the apparent success of Pandora's radio masks a deeper crisis in the music industry.

Profit is not easy

Pandora is always hard to make a profit, and one important reason is that it pays a certain percentage of the license fee for every song it plays. In other words, only Pandora's advertising revenue earned through music broadcasts is more profitable than royalties. Otherwise, the larger the amount of playback, the more you lose.

Music copyright in the United States is divided into two categories: "lyrics copyright" and "recording copyright". "Song and lyrics copyright" belongs to the songwriter, and "recording copyright" belongs to the player or band, musicians. Among the radio and songwriters and musicians is the American composer, the Association of Writers and Publishers (ASCAP) and the Radio Music Association (BMI), which first unify the licensing fees for music-using institutions such as radio and television, filter the Commission, and divide it between songwriters and musicians.

Pandora has been paying publishers every year 4% of their total revenue, 1.85% of which are in the pockets of authorized agencies ASCAP. The problem arises: on the one hand, ASCAP wants Pandora to raise that percentage to 3%, while Pandora is facing a huge survival crisis, trying to reduce the ratio to 1.7%. Not so long ago, Pandora won the authorization bill, which means that the proportion of authorized continues to remain 1.85%. Judging from the final version of the tax rate, neither goal has been achieved. Not only ASCAP interests damaged, but also set off a war of words on music Copyright: In the end is Pandora's rogue behavior, the exploitation of musicians, or profit model congenitally deficient, there are criticisms?

But if the argument stays at this level, it's too superficial. Because the US government is the culprit in making this irrational, chaotic copyright system.

When the copyright law of the old Times meets the digital music of the new era

In the 1941, the United States Government formally stipulated that television and radio can easily access and use popular songs, in return, to the songwriters and publishers to pay a certain fee. But among the payments, there are two large intermediaries: ASCAP and BMI, who hold music permits and pay an authorization fee when the outside world uses music. After handling, and then divided into songwriters and musicians. The system has prevailed for many years until the advent of the internet and digital music has broken the tide of calm. And the legal entanglements of Pandora and ASCAP stem from this.

In 2013, Pandora paid 313 million dollars to record labels, equivalent to 49% of the total annual revenue, and paid 4% of its total revenue to issuers, about 26 million dollars in royalties. Regardless of how much Pandora is making money, the musicians still think that they have suffered a loss, while Pandora is crying out for the royalties it spends on its own. There have been media reports: "Five of Beyonce and Aguilera-level superstar songs, a year on Pandora on the number of play 33 million times, but only to obtain a 587.39 dollar royalties." Needless to say, there are millions of non-famous musicians who are not red or purple.

Obviously, the crux of the problem is not the level of the tax rate. When the music royalties through the ASCAP and other intermediary organizations, and according to the category of songwriters and musicians, the real musicians to get a little money. Pandora's dilemma, however, is just a microcosm of the entire chaotic music copyright system.

Pandora's grant rate is roughly the same as that of traditional radios, which is only 0.15% higher. But throughout the music industry, the pay-and-profit models are vastly different. FM traditional radio only pay royalties to songwriters, musicians are excluded. Digital radio, however, not only pays for musicians and songwriters at the same time, but each pays a different proportion. SIRIUS/XM, for example, pays 8% of the total revenue, while Pandora pays 60%,spotify and the popular beats Music's copyright treatment is more novel and gives them new opportunities.

A change of heart

No doubt, even for famous musicians, this is the worst of times.

On the one hand, digital radios such as Pandora have been so expensive that they are making a profit by losing money, and even if ASCAP and the record companies squeeze every penny from Pandora and Spotify, it will not make up for the loss caused by the drop in CD sales. Therefore, in addition to lowering the version tax rate, increasing the number of users and attracting advertisements, it is the best policy to seek a new outlet with music radio and streaming media.

1 Innovation Profit model

In order to ease the conflict and increase revenue, the first step in digital music is to make a good relationship with musicians. For example, the streaming media Spotify, in late 13, launched a Spotify for artists service for musicians and their brokers to monitor the heat of the music, with a view to weakening the fear of the arts people streaming media music services and attracting more singers. Currently, Spotify has valued more than $4 billion trillion and raised $250 million in the latest round of funding. According to the service data analysis, in 2013, all companies and platforms across the United States total streaming media royalties of 503 million U.S. dollars. If these flows are concentrated in Spotify, the total will double to 1.3 billion. The logic behind this is that, as Spotify gets more hot, the cake of royalties will be bigger, and copyright holders will be able to earn more if they maintain the existing 70% per cent share of the proceeds.

2 ASCAP and BMI, no change will be finished

Since 1941, ASCAP and BMI have been the two major copyright agencies that dominate music publishers, and their behaviour is regulated and restricted by the Ministry of Justice. The law stipulates that the use of music institutions, such as television stations, restaurants and retail outlets, will pay royalties to songwriters.

In the digital music age, ASCAP and BMI are filled with the taste of the chicken: tasteless, tasteless. For songwriters and music distributors, ASCAP and BMI still represent rights and interests. But with the transition from traditional music to digital music, the original copyright system has been greatly impacted. Streaming music Radio Pandora is constantly challenging ASCAP's authorization rate, and ATV, the authoritative music distributor, advocates a government-adjusted system. A number of authoritative publishers, including ATV, have tried to revoke some music copyrights from BMI, in the face of impaired interests. The Justice Department has also been outdone by the introduction of the "All or nothing" strategy, that is, if the publisher tries to revoke the digital music copyright, all of its types of songs will also lose copyright protection.

Although the copyright system is outdated, but once lost, the music field situation will only be more chaotic. Imagine that if the three major distributors of 48% market share, Universal music Publishing Group, ATV and EMI music Publishing, successfully graduated from BMI, the BMI would lose nearly half of its income. The collapse of the copyright agency would lead to chaos in the entire licensing system, which in turn would affect the interests of small music distributors. For music users, such as bar bosses, how do they pay for copyright? Where do they know which publisher is playing the song?

Copyright Office has launched a survey to examine the effectiveness of existing music licensing methods. The study is likely to replace existing models to better meet new technologies and protect the interests of musicians. But to really implement the new charging rules, Congress needs to exert political means and urge existing copyright authorities and record companies to embrace change boldly.