Thursday, September 17, 2009, 10:15 am PT (01:15 pm ET)
Music industry wants performance compensation from iTunesA consortium of music industry groups has begun lobbying the U.S. Congress to receive what they believe is their fair share of revenue from online music sales services like Apple's iTunes.
In a new story from CNet, music industry representatives plead their case as to why they are entitled to revenue for downloads of films, TV shows, and 30-second song samples that feature their work. Songwriters say they do not receive enough revenue from the Web to live off of, and they believe they are owed a larger share of sales.
With regards to the 30-second samples shoppers can stream before the buy, industry officials believe they should be paid a "performance" income from Apple, much like when a song is played in a public venue like on the radio or at a sports game. It's the same situation, they say, for movies and TV shows that feature licensed music.
Because negotiations have apparently not produced results, the music industry has reportedly begun to lobby Congress. Their goal: Anyone who sells music, movies or TV shows online would be required to pay a performance fee with that transaction.
"If you watch a TV show on broadcast, cable or satellite TV there is a performance fee collected," David Israelite, president and CEO of the National Music Publishers Association, told CNet. "But if that same TV show is downloaded over iTunes, there's not. We're arguing that the law needs to be clarified that regardless of the method by which a consumer watches the show there is a performance right."
Israelite said that composers and songwriters are traditionally paid not only for the rights to a song when it is included in a movie or TV show, but also a performance fee from the networks or studios.
However, there is a question as to whether an online download could be considered a "performance." After all, there is a difference between a publicly or widely broadcast piece of content, and one simply used in a person's home for personal use, argued Jonathan Potter, executive director of the Digital Media Association.
"They are picking on Apple because they say Apple is making a bundle of money," Potter said. "But these companies should be thrilled that Apple and the other services are selling music and generating millions, maybe tens of millions, in royalties."
Earlier this year, iTunes went DRM free after the largest music labels — Universal Music Group, Sony BMG, Warner Music Group and EMI — conceded to Apple's requests. In exchange, Apple allowed variable pricing on iTunes songs, ranging from 69 cents to $1.29.
iTunes has had its share of troubles with content providers in the past, most famously NBC Universal, which pulled its television content from the online store in 2007 after a feud with Apple over pricing structures. A year later, the two companies were able to work out an agreement, offering high definition content for $2.99.
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