U.S COPYRIGHT AND U.S COPYRIGHT AND RADIORADIO

History of an Inter-SectorRegulation

Vincent BullichMCF SIC Paris Nord-13Labsicvincent.bullich@laposte.net

IntroductionIntroductionMusic as a content for radio

◦ 1906: The first piece of recorded music broadcast◦ 1919: Music is the main content of broadcast programs

by the newly founded commercial stations.◦ From the 1960’s to nowadays: 2/3 of US radio stations

are musical radio stations

3 main categories of private actors are involved : ◦Broadcasters◦Recording Industries◦Publishers

A fourth important actor : The State◦Law-makers and Judges (common law system)◦Definition of the official rules of the interactions

between the 3 main private actors◦Among these rules: the Copyright law.

Copyright Law as a result of an arbitration of the different claims (after multiparty negotiations between stakeholders)

AND Copyright Law as a manifestations of the Congress

and government own interests

Aim of the communication:◦Highlight the evolution of the goal of the law:

From the “Encouragement of Learning” to an economic regulation between 3 interrelated sectors.

◦And its consequences : The loss of internal coherence of law Effects on the strategies and power struggles

between the actors of these sectors. Impact on the conditions of emergence of a “post-

radio” in the USA.

Methodology◦ Long period analysis◦ Institutional approach : Study of the interactions between

agency and the law◦ Sources of data:

Primary sources: law texts, judicial, decisions, reports for the Congress, annual reports of companies.

Secondary sources: historical studies on Copyright law, recording and broadcasting industries

Contents of the CommunicationI. The First Copyright Laws and MusicII.The 1909 Copyright ActIII.The ASCAP/Radio Corporations DisputeIV.Phonographic and Radio Companies: From competition to

integration…V.…And BackVI.Conclusion : Which Regulation for a « Post-Radio » in the USA ?

I. The First Copyright Laws and I. The First Copyright Laws and MusicMusic 1787 : Art 1 §8 of the US Constitution: “The Congress shall

have power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries »

1790 : the first federal copyright act.◦ « An Act for the Encouragement of Learning »

At the origin, the copyright is conceived :◦ as a law for bringing wealth to the new nation by

upgrading the level of education of the population ◦ a right of citizens to access to information and

knowledge

1831 : Amendment for the Musical Scores◦ “Medium-related isomorphism”: different contents have the

same legal treatment because they are communicate by the similar “medium” (largo sensu).

◦ Lobbying made by the most important U.S. Publishers, not the composers.

1897 : Amendment for the Public Performance of Musical Compositions◦ 1856 : public performance entitlement in dramatic works.◦ Lobbying made by composers AND the newly founded Music

Publishers Association (MPA). However, the publishers failed to obtain a payment for the public performance of the musical pieces that they « owned ».

II. The 1909 Copyright II. The 1909 Copyright ActActThe context :

◦ Competitition inter-sector between publishers, the phonographic industry and the mechanical music industry.

Economic domination of the Publishers Challenged by the mechanical music companies And the skyrocket growth of the phonographic industry

(from 1905 onwards)

◦ The Supreme Court decision of 1908 No Copyright on paper rolls

◦ The MPA/Aeolian Co contract of 1907 The most important company of mechanical music obtained

the exclusive right for 35 years to use the music « owned » by the publishers of the MPA.

An Antimonopoly Act◦ Decisive role of the Roosevelt administration: The

copyright revision as a part of a larger anti-trust policy.

◦ 3 main provisions : The « compulsory licence » allows a person to make a new

sound recording of a musical work, if that has been previously distributed to the public, by or under the authority of the copyright owner of the music.

The « mechanical right  », which are aquired from music publishers and copyright holders, give the right to record, manufacture and distribute another copyright holder's musical work.

The law grants the publishers a payment for the public performance of the musical compositions that they « owned ».

The Creation of the ASCAP (American Society of Composers, Authors and Publishers) in 1914

◦ The first US Performing rights organisation created by the MPA and the « big » publishers of the Tin Pan Alley (NYC).

◦ Purpose : implementing the 1897 & 1909 amendments by a pooling of resources and then decreasing the transaction costs.

◦ First mission of the ASCAP : licencing the main cabarets and concert halls

◦ Second mission : extending this licence to the bars, restaurants and hotels.

III. The ASCAP/Radio Corporations DisputeIII. The ASCAP/Radio Corporations Dispute15 years of domination of the ASCAP

◦ 1921 : the members of the ASCAP allowed the commercial radio stations to broadcast the music they “owned” with the compulsory mention “music under copyright”, but they quickly asked for money.

◦ 1922 : The National Association of Broadcasters (NAB) began legal proceedings against the ASCAP for monopoly and for abusing its dominant market position.

◦ 1923 : Witmark V. Bamberger trial. The commercial radio stations are compelled to pay a 5 dollars per day blanket licence to the composers and publishers.

◦ 1931 : Decision of the Supreme Court : The blanket licence is raised to 2% of the turnover of the stations. The ASCAP multiplied then its inspectors.

◦ 1934 : The “transcription discs” became subject to the mechanical rights.

Reaction of the NAB : the creation of the second performing rights organisation : The Broadcast Music Incorporated (BMI)

◦ From 1933 to 1939, the NAB bring 34 lawsuits against the ASCAP. All failed.

◦ From 1936 onwards, the NAB decided to set up its own songs catalog, and broadcast massively these songs.

◦ In 1939, Members of the NAB founded the BMI. The success was immediate: with a blanket licence 40% less than the ASCAP one, the BMI became the first performing rights organisation in the USA in 1940.

◦ 1941: no stations broadcast ASCAP music anymore. The “old” organisation decided to bring lawsuit against the BMI and the NBA and won. Nevertheless, the ASCAP had to face from this date a really threatening competitor.

IV. Phonographic and Radio companies: IV. Phonographic and Radio companies: From Competition to Integration…From Competition to Integration…

Year Licensed radio stations Percentage of households with a radio

Phonograms sales

(millions of dollars)

1921

1923

1925

1927

1929

1931

1933

1935

1937

1

556

571

681

606

612

598

623

704

0,0

1,5

10,1

23,9

34,9

54,9

61,3

66,2

73,3

47,844

36,372

26,791

31,781

34,129

7,698

2,500

3,705

7,823

A tough competition on the home audio device

Source : [Langenderfer, Kopp, 2004]

Domination of the radio ◦Lower price◦Better sound◦More diversity of contents

Reaction of the phonographic industry during the 1920’s :◦Trying to forbid the use of records on radio:

Failure (first sale doctrine - 1940: Whiteman v. WBO Broadcasting Trial)

◦Trying to create a sound copyright : failure (opposition of the FCC)

Integration◦ 1927 : Partnership between Columbia (a phonographic

company) and United Independent Broadcasters. 1929 : foundation of Columbia Broadcasting System (CBS)

◦ 1926 : Radio Corporation of America (RCA) founded NBC (National Broadcasting Company ) and bought Victor Talking Machine Company (the most important phonographic company) in 1929. Tensions in the newly formed group related to the music copyright.

◦ 1950’s : All the national broadcasting networks and most of the important local radio stations networks had their own recording companies. Renewal of the recording industry Synergy between both sectors Strategy of the multimedia groups: insourcing publishing

companies/recording companies/radio stations are integrated

V. …And BackV. …And Back1971 : The Sound recording amendment

◦ Objective of the law : struggle against counterfeiting and the “grey imports”.

◦ The FCC prevented the law from creating a new blanket licence for recordings broadcast on radio.

1995 : Digital Performance Rights in Sound Recordings Act◦ Efficient lobbying of the Recording Industry Association

of America (RIAA)◦ The law compels the webcasters and satellite radios to

pay the sound copyright (contrary to the AM and FM radios) EVEN the NON-COMMERCIAL WEBCASTERS.

◦ End of the “Medium-related isomorphism” rule.

Consequences :◦Loss in the coherence of the Copyright Law.◦Decrease of the multi-cast (over-the-air and on

the Internet) programs.◦Barriers to entry to the start-up webcasting

business.◦Impassable obstacle for the amateur stations◦Strong increase in the number of illegal

webcasters.

Conclusion : Which conditions for the Conclusion : Which conditions for the emergence of a « Post-Radio » in the emergence of a « Post-Radio » in the USA ?USA ?Delay in the development of Internet radios (during

the period 1998-2006).The law subserves the most important companies in

the broadcasting industry.Tension between the Copyright Law and the Federal

Communications Commission (FCC) plan to develop the HD Radio.

Since summer 2008 : New search for a compromise on music performance royalty (extension VS limitation of the sound copyright scope) Towards a new law ?

Thank you for your attentionThank you for your attention