Brits Want Performance Royalties

Tony Blair and George W. Bush may have displayed signs of their unity on many issues when the latter visited Europe in February, but for the music industry, the picture is quite different.

Industry organizations representing the whole spectrum of the British music sector have taken on the United States. They are "urging the U.S. to ensure that creators and performers are given a fair deal."

The "stringent visa requirements" for British acts that wish to tour the States and the low level of royalties collected there are at the heart of the problem, according to the music community.

The joint position regroups creators' and music publishers' organization British Music Rights, indie labels' body Assn. of Independent Music, labels' group the British Phonographic Industry, the Music Managers Forum, the Musicians' Union and labels' collecting society Phonographic Performance Ltd.

They claim that "the U.S. operates beneath acceptable international copyright standards." The royalty dispute is about the lack of compensation when their music is played in bars and restaurants or on the radio.

British and European Union nation performers have been unable to collect some U.S. songwriter royalties ever since the passage in Congress of the Fairness in Music Licensing Act of 1998. That law ended the requirement for small bars, taverns and mall shops to pay royalties for background music.

Rep. H. James Sensenbrenner Jr., R-Wis., now chairman of the House Judiciary Committee, introduced the bill. Since the passage of the law, the United States has ignored complaints from the World Trade Organization to change the situation.

"This is setting a precedent," BMR director general Emma Pike says. "The U.S. should remember that they are heavily relying on income from intellectual-property rights, and it is in the U.S. interest to come clean on these issues."

Initial losses in income for international songwriters and music publishers amounted to as much as $6.8 million annually, but according to the BMR, the European Commission estimates that European music writers and publishers are losing in excess of $25 million per year.

The Bush administration has agreed to compensate WTO members with $3.3 million while the law remains in effect. However, as of Dec. 31, 2004, the U.S. government has stopped paying compensation and, according to Pike, "shown no sign that they either want to comply with WTO requirements or pay compensation." Even with WTO pressure, efforts to introduce legislation to repeal the law have failed.

"It really sends a bad message to all the territories that have a natural tendency to disregard the value of copyright," AIM chairman Alison Wenham adds. "The U.S. should respect the treaties it signs."

Another issue at stake is that the United States has not granted rights to performers and labels to receive payment for the broadcast and public performance of their recordings in the States. "In the U.S. you don't receive payment for the public use of sound recordings," PPL director of legal and business affairs Peter Leathem says. "There are no such rights."

POLICY ALSO COSTS U.S. MONEY

U.S. rights society SoundExchange has started collecting these rights for such use of public recordings in the digital sector as digital radio, but this does not extend to performances in bars or malls or traditional broadcasters.

"For the moment, we are pointing things out," says Leathem, adding that his organization will be happy to support such American societies as SoundExchange in their lobbying efforts to get similar rights as in the EU.

Leathem says U.S. performers and labels lose a lot from not having the same level of collection than in most of Europe. Because of a lack of reciprocity, PPL is not collecting on these performance rights on behalf of U.S. labels and performers. "It works both ways, and U.S. performers and labels have a lot to lose too," Leathem points out.

The visa issue is an old scourge of any agent or artist manager, MMF general secretary James Sellar says, because of the U.S. government's rigid visa application rules governing traveling "foreign musicians." Tightened security rules since Sept. 11, 2001, have made the process even rougher for getting a U.S. tour together for a developing band or performer.

The process gets even more stringent, Sellar says, for big ensembles or choirs.

"Applying for visas can have a disparaging effect, and it is also time-consuming and expensive," he says. "Some visa categories work well for established artists, but when you have musicians at an early stage of their career, you sometimes have to react quickly if an opportunity comes [to perform in the States]. And this is when you get into trouble."

MMF and AIM have had discussions with U.S. embassy officials in London, but they were inconclusive. Sellar and Wenham admit that in the current climate of maximum security, it is not going to be easy to change any rules. Both point out that it is extremely easy for U.S. performers to tour Europe and the procedures should be reciprocal, or at least, more flexibility should be introduced.

British organizations are working closely with the Department of Culture, Media and Sport and the Department of Trade to find solutions. The MMF would like procedures to speed up visa attribution without affecting security issues. Sellar says, "For some reason the sports sector seems to have got it right—we're aiming at the same visa waiver program."