ROBERT SIEGEL, host:
The music business has changed drastically over the past decade, largely because of the Internet. But until recently, at least one thing had not changed - the role of ASCAP. That's the American Society of Composers, Authors and Publishers. For nearly a century, the group has helped songwriters and music publishers get paid when their music is played on the radio, in dance clubs, even in the elevator.
But NPR's Laura Sydell reports that as broadcasting moves online, ASCAP's role is less certain.
LAURA SYDELL: Like many record labels, EMI Music has a publishing arm that controls several different catalogues of songs. Take April Music, which holds the rights to some 200,000 songs, including words written by such popular artists as Jay-Z, Mos Def and Beyonce.
(Soundbite of song, "Single Ladies")
Ms. BEYONCE KNOWLES (Singer): All the single ladies, all the single ladies. All the single ladies, all the single ladies. All the single ladies, all the single ladies. All the single ladies, now put your hands up.
SYDELL: Every time Beyonce's song gets played on the radio - that includes NPR - the American Society of Composers, Authors and Publishers keeps track. ASCAP was founded in 1914 by songwriters who wanted to get paid when their songs got played on the radio. The organization would send its staff out into the field to listen.
Mr. JOHN LOFRUMENTO (CEO, ASCAP): We had individuals in recreational vehicles traveling around the United States taping over-the-air broadcasts of radio and television.
SYDELL: That's John LoFrumento, the CEO of ASCAP. Times have changed and so has the technology that ASCAP uses.
Mr. LOFRUMENTO: Which fingerprints our members' music and tracks our members' music as it's being performed real time.
SYDELL: On radio. But as fans start to listen to more of their music online, keeping track of how often a song gets played is even easier, says Jeff Price, the CEO of the digital music distribution company TuneCore.
Mr. JEFF PRICE (CEO, TuneCore): YouTube and Spotify and Apple and MOG and Rhapsody and all these online digital streaming services already track the public performances of the songs. And they can just click a few buttons and spit out a report that shows how many plays there have been.
SYDELL: The ease of online tracking is why EMI decided to drop ASCAP for tracking digital rights - the music that gets played online - for its April Music catalog. In a statement, EMI Music Publishing's CEO, Roger Faxon, says the company is trying to create more efficiency. Faxon says he wants to reduce the barriers to the development of new online services.
Market analyst Phil Leigh agrees that the new arrangement will help start-ups.
Mr. PHIL LEIGH (Market Analyst): They can't get started if they get charged rates that apply to old businesses that are too high. Therefore, the music publishers want to be able to negotiate with them directly in order to provide rates that enable them to get into business.
SYDELL: As an example, Leigh points to Pandora, the online radio network. It has 90 million users but still can't make a profit. But this raises a couple of interesting questions. First, it could mean songwriters will get paid less, and second, Pandora would no longer be able to just go to ASCAP or the other major performance rights organizations, BMI and SECAC. It would have to negotiate with numerous different music publishers over the thousands of different songs it wanted to play.
And while these changes might pose extra challenges for artists in streaming services, TuneCore's Jeff Price says that in an age of shrinking profits, publishers like EMI can save money by cutting out the fees they have to pay performance rights organizations like ASCAP.
Mr. PRICE: I think its short-term goals right now of, you know, particularly EMI, to squeeze every penny they can out, because they're going to put themselves up for sale, and they want their balance sheet up. That's why EMI is rushing around doing this, because they're trying to get bought by Russian billionaires.
SYDELL: But the interests of EMI Publishing may not necessarily be those of the songwriters it represents. As it is now, ASCAP takes its fee, then distributes the rest of the money equally between songwriter and publisher.
Casey Rae-Hunter of the nonprofit advocacy group Future of Music Coalition says the big music publishers aren't bound by the old agreements negotiated by performance rights organizations or PROs like ASCAP.
Mr. CASEY RAE-HUNTER (Deputy Director, Future of Music Coalition): What is EMI's responsibility to the songwriters who are part of their publishing empire, and can we trust that this company is going to honor the, you know, 50-50 split that songwriters and publishers have worked out and honored over the years?
SYDELL: Stories are a legion about musicians not being paid royalties by record labels. TuneCore's Jeff Price says if you're a songwriter with an older contract that doesn't address digital sales, those same issues might play out online.
Mr. PRICE: So if you're a legacy songwriter and you're in a deal with EMI Music Publishing and that money is now all given to EMI as opposed to the PRO, and you're unrecouped, meaning they've advanced you money and you haven't earned enough back to pay them back, you're not going to get any money as a songwriter.
SYDELL: For now, digital music rights only make up a very small portion of the royalty pie for songwriters and publishers. ASCAP reports it's only 17 million of the 935 million it collects. But everyone, including ASCAP, knows that's going to change. So if EMI is successful in its move to negotiate its own digital rights and others follow, the performance rights organizations may be yet another casualty of the shift to online music.
Laura Sydell, NPR News.
(Soundbite of music)
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