It sure seemed like a feel-good moment when sixties singers Flo and Eddie, known for performing hits like The Turtles’ “It Ain’t Me Babe,” beat SiriusXM in a court fight over royalties last month. But as the implications of the duo’s victory becomes clear, the feeling is more like a hangover.
According to copyright experts, the court ruling will spawn a glut of further lawsuits, and could expose music providers of all types — from [company]Pandora[/company] to websites like [company]YouTube[/company] — to brand new copyright fees that will ultimately be paid by consumers.
A closer look at the case shows how it is less about justice for aging singers, and instead a way for the music industry to get new money for old rope.
Free money for Flo & Eddie
When Flo and Eddie of The Turtles won their royalties case against SiriusXM in September, the moment came as a victory for a sentimental campaign that the music industry has been stoking for years. That campaign, which the industry has been fighting in the courts and in Congress, is about “unpaid royalties” that are allegedly being pocketed by SiriusXM and Pandora at the expense of beloved older musicians.
Even to copyright lawyers, the focus of the fight is arcane, but it can be explained like this: a 1995 law requires digital radio services to pay for performing sound recordings — but only those created after 1972. Earlier recordings are not protected by federal law.
For practical purposes, this means that when Pandora plays The Turtles’ 1965 version of “It Ain’t Me Babe,” the company doesn’t have to pay Flo and Eddie (though it does have to pay Bob Dylan who wrote the song).
Now, however, the music industry is trying to squeeze out more royalties by turning to state copyright laws that have been dormant for nearly a half-century, and that never applied to radio performances in the first place (you can read an excellent breakdown of how it all works here).
The Turtles duo, meanwhile, are just one face of this fight. The industry has also been spitting out heart-tugging appeals from Aretha Franklin and Buddy Holly’s widow to drum up support in Congress for a law to collect more money from the old recordings.
All this sentimentality, however, masks the fact that the dispute is less about “unpaid” royalties, than it is a gimmick to conjure money from thin air.
Recall that Flo and Eddie and the rest of them have never been paid for radio performances of pre-1972 works, so why it’s unclear why it’s time to start paying them now. And lest this sound hard-hearted, don’t forget that copyright law offers multiple strands of royalties — including one that pays performers whenever a consumer buys one of their recordings.
Meanwhile, SiriusXM and Pandora — the villains in this story — are already paying buckets of money for songwriter and performance royalties at rates that, due to legal distinctions between digital and non-digital radio, far outstrip those paid by AM/FM radio stations.
All this complexity, however, is a boon to the record labels. It allows the industry’s PR machine to elide the baffling copyright details, and talk instead about all those feel-good hits.
And now, after Flo and Eddie’s recent victory against Sirius XM, the music industry is poised to beat a path to courtrooms across the land, and to push Congress to make this temporary windfall a permanent one.
A threat to radio stations and websites too
“The opinion is eye-popping, and creates a tremendous amount of uncertainty,” said Naomi Gray, an intellectual property lawyer with Harvey Siskind in San Francisco.
It mean that companies could be on the hook for a new type of state-based copyright royalty every time they play a song that dates from prior to 1972. Worse, the rules vary from state to state. Depending on what courts decide, a radio station may have to pay in California but not in New York.
The quagmire gets deeper still because no one is sure if the DMCA (an important federal shield law that can give websites immunity for copyright infringement by their users) applies to state-based copyright action. Based on the logic of the SiriusXM ruling, record labels could now be in position to go after sites like YouTube or Facebook whenever people upload an oldie.
In this confusing legal environment, lawyers may begin advising media companies of all stripes to refrain from playing music from the 1950’s, 1960’s and early 1970’s.
A spokeswoman for the Recording Industry Association of America said in an email that the organization would decline to speculate on how broadly the recent ruling might apply. But it’s worth noting that the music industry is already striking while the copyright iron is hot: last week, Flo and Eddie filed a new class action suit against Pandora, one modeled on their SiriusXM claims.
Gray stressed that last week’s SiriusXM ruling is under appeal and that the decision is based on California state laws (the sound recording law is different in other states). This means that Flo and Eddie’s copyright windfall is not a done deal but, as Gray also noted, there is likely to be a “gold rush” for lawyers in the meantime.
How to direct copyright money to who really needs it
Even as the legal mess over state copyrights gets sorted out in the courts, tension is brewing as to whether Congress should get involved and, more broadly, over which musicians should get more money.
According to Casey Rae, a VP with the nonprofit Future of Music Coalition, the smoothest way to resolve the controversy over state law copyright claims is for Congress to federalize all sound recordings. In practice, this would mean that sound recordings before and after 1972 could be treated alike.
Rae added that, in an ideal world, there would also be more parity between the royalty obligations of AM/FM radio stations — whose lobbying clout means they don’t have to pay for sound recordings at all — and digital services like SiriusXM and Pandora, which must pay both songwriters and sound recordings when they perform a song.
It’s an appealing idea. After all, why should the rules for terrestrial and digital radio be so different? (And indeed, radio giant Clear Channel has already agreed to start paying sound recording fees for AM/FM in return for a better deal on digital rates).
But this equilibrium argument doesn’t explain why SiriusXM or anyone else should start paying for pre-1972 sound recordings. For a court or Congress to make such an order would amount to a brand new copyright royalty that didn’t exist before, and would do nothing to spur creativity — which is the point of copyright law in the first place.
The notion that Flo and Eddie are entitled to a new type of copyright windfall is also obnoxious for younger musicians, who will see little of that windfall even as they struggle to launch their own careers. Like pensions and cheap tuition, a pre-1972 copyright award would be a benefit that will largely accrue to baby boomers but not to millennials.
If Congress and the courts really want to impose more copyright costs, they should at least do so in a way that directs the money to up-and-coming musicians — not half-century old acts that have collected multiple times already. In the meantime, as this is sorted out, there will be only one sure winner.
“There are lots of lawyers, and these cases are billable hours — they’re certainly not shy about litigation,” Rae said. “I would love it if saner minds prevailed.”