NMPA_International_Survey_12th_Edition

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NMPA INTERNATIONAL SURVEY TWELTH EDITION INTERNATIONAL YEAR IN REVIEW 2002 tent providers to offer their products to all Internet-delivery companies on the same “nondiscriminatory” terms, to exempt Internet services from paying royalties to music publishers for ephemeral copies and archival “back-up copies,” and to ensure direct payment of the 50% split of compulsory license Webcast royalties to recording artists. Boucher also introduced the Digital Media Consumers’ Rights Act, which would modify the DMCA to enable hardware manufacturers to introduce multipurpose technology as long as it is capable of substantial non-infringing use. The bill also stalled in subcommittee. Meanwhile, House Judiciary Committee Chairman F. James Sensenbrenner (R-WI) called for comments from the industry and others on approaches to dealing with online piracy, with expectations that his committee will hold hearings in 2003 on the issue. The only music-related measure passed by Congress in 2002 lowered the rate of the new phonorecord digital-performance royalty,for webcasters with revenue of less than $1 million a year. Music industry and Internet trade groups are continuing negotiations for a joint agreement on phonorecord digital-performance royalty rates for those webcasters who want a statutory license rather than choosing to negotiate directly with labels. The old rate structure ended Dec. 31, 2002. The rates would apply to webcasters with a revenue of more than $1 million, with rates for smaller webcasters already set through 2004. In the meantime, despite the continuing growing threat of piracy, the major recording companies have announced that,in a compromise with computer companies, they will not seek legislative intervention to prevent digital piracy through technological means. The Recording Industry Association of America (RIAA) and two trade groups representing computer makers and software companies— the Business Software Alliance and the Computer Systems Policy Project—said they had agreed on several basic principles that would help ease tensions between their industries, and that they plan to convene a meeting of senior industry executives to discuss technical solutions to combat the illegal copying of digital material. As part of the agreement, the RIAA said that under most circumstances it would oppose legislation that would require computers and consumer electronics devices to be designed to restrict unauthorized copying of audio and video material. For their part, the computer groups said they would not support legislation seeking to clarify and bolster the rights of people to use copyrighted material in the digital age, which the recording industry has opposed as unnecessary. The Senate Commerce Committee held hearings on January 30, 2003 to investigate the question of whether giant radio concerns wield too much power over the music industry.Lobbyists at the hearing for the National Association of Broadcasters (NAB) and Clear Channel Communications, which owns over 1,200 stations and is also the country’s largest concert promoter, cited studies they claimed proved that the 1996 deregulation of radio has been beneficial to listeners and asked the Federal Communications Commission (FCC) to eliminate other media cross-ownership rules to allow radio to better compete in the digital age. A group of recording artists, smaller broadcasters, concert promoters, artists’ groups, and musicians’ unions, however, have alleged anti-competitive behavior on the part of Clear Channel. Senator Russ Feingold (D-WI) reintroduced his Competition in Radio and Concert Industries Act in 2003, which would prohibit anti-competitive practices in the radio and concert industries. So-called “pay for play” practices, wherein up-and-coming acts are allegedly urged to supply exclusive promotional concerts to certain radio outlets, have been at the center of the ongoing radio controversy. The RIAA, which did not testify at the hearing, joined 22
with artists’ groups and unions in a coalition letter to the FCC sent during the summer of 2002, warning about the dangers of consolidation and condemning “pay-for-play” arrangements. Members of both parties on the Senate Judiciary Committee are reported to be preparing their own legislation to address the anti-competitive concerns. In February 2003, several major music industry and artist groups, including RIAA, the American Federation of Television and Radio Artists (AFTRA) and the American Federation of Musicians (AFM), agreed to a joint settlement for royalty rates and terms with cable/satellite music subscription services Music Choice, DMX MUSIC and Muzak.The agreement,which avoids the need for a Copyright Arbitration Royalty Panel (CARP) proceeding, covers the period of January 1,2002- December 31,2007. Under the deal’s terms, SoundExchange will collect royalties from the digital music channels and distribute them to artists, record companies and other copyright holders. In April 2003, SoundExchange announced an agreement with webcasters on royalty rates and terms to apply to commercial subscription and non-subscriptionbased webcasters and Internet radio. The parties submitted the proposal to the Copyright Office for industry-wide adoption. The agreement allows non-subscription webcasters to pay on a perperformance or aggregate tuning hour basis, and offers an additional gross revenue option for subscription services. The rates are: 0.0762 cents ($0.000762) per performance, the same rate as established by the Librarian of Congress after the last CARP; 1.17 cents ($0.0117) per aggregate tuning hour; or 10.9% of gross revenues. The deal does not impact the ability of eligible small commercial webcasters to elect rates and terms adopted under the Small Webcasters Settlement Act. The agreement also does not address rates and terms for noncommercial webcasters or simulcasts of over-the-air broadcasts. In addition to seeing not only significant declines in record sales but also several high-profile record company executives exiting their posts, the record industry also endured California state senate hearings into its accounting practices. In January 2002, California Sen. Kevin Murray (D-Culver City) introduced a bill that would have repealed the music industry’s exemption to the state’s “seven-year statute.” The exemption allows record companies to sue artists for undelivered albums if they exit their contracts after seven years. The bill was later rescinded by Murray, who said he would introduce an artists’ rights package of legislation in 2003 that would revisit the seven-year repeal bill, label accounting practices, and artists’ health care and pension benefits. As part of the battle against such unlicensed services,record companies Universal Music Group,Warner Music Group, BMG and EMI each launched expanded commercialdownload initiatives in the fall of 2002, making tens of thousands of tracks available online. Additional content was cleared for distribution through online subscription services, including Rhapsody, Pressplay and MusicNet,which all completed cross-licensing initiatives during 2002 and now each include content from the five majors and dozens of independent labels. On September 26, 2002, the RIAA announced the launch of an aggressive multimedia campaign to educate the public that unauthorized downloading of digital music is illegal. The campaign, by the Music United for Strong Internet Copyright (MUSIC) coalition of which NMPA is a member, followed published estimates that over 2.6 billion music files are downloaded illegally each month, mainly through the likes of Kazaa and Morpheus. OTHER NEWS… In December 2002, Crest National,a media company providing film, video,audio,and replicating services, became North America’s first manufacturer of the hybrid Super Audio CD (SACD) format. The company said it currently has a SACD capacity of three million units per year,though it anticipates that number to rise significantly in the coming months. In the meantime, the first-ever Online Piracy Resolution was unanimously passed by the California Assembly’s Arts, Entertainment, Sports,Tourism, and Internet Media Committee on January 29.The resolution calls for parents to educate their children about the illegal nature of piracy and asks universities and other such establishments offering broadband connections to introduce “employee policies and technical measures to ensure that their networks are not being misused to infringe copyrighted work.” Also in January 2003 came word that RIAA chairman/CEO Hilary Rosen will resign at the end of the year. RIAA did not name a successor, but will form a committee to search for a new chairman over the next several months.In the interim, RIAA president Cary Sherman will oversee day-to-day operations. In March 2003 RIAA announced it had allocated $2.5 million in new anti-piracy funds to fight Latin music piracy in the U.S.The funds were earmarked for the 2003-04 fiscal year, which began April 1.The RIAA estimates that between 30%-40% of all Latin music sold in the U.S. is counterfeit,adding that 28% of all seizures of illegal CDs in the U.S. are of Latin music. At least eight new full-time Latin music field investigators will be hired by RIAA to concentrate solely on Latin product. NMPA INTERNATIONAL SURVEY TWELTH EDITION INTERNATIONAL YEAR IN REVIEW 2002 23
Page 1: 12th e d i t i o n NATIONAL MUSIC P
Page 4 and 5: Preface The National Music Publishe
Page 6 and 7: Executive Summary This is the NMPA
Page 8 and 9: Following a solid 14% growth in rev
Page 10 and 11: Table 6 Master Survey Data 2001 INT
Page 12 and 13: Table 7 Flat Exchange Rates 2001 IN
Page 14 and 15: Chart 4 22 Other Countries Ireland
Page 16 and 17: REPRODUCTION-BASED INCOME In 2001,
Page 18 and 19: NMPA INTERNATIONAL SURVEY TWELTH ED
Page 20 and 21: International Year in Review:2002 C
Page 26 and 27: LATIN AMERICA NMPA INTERNATIONAL SU
Page 42 and 43: APPENDIX A NMPA INTERNATIONAL SURVE
Page 44 and 45: APPENDIX B International Involvemen
Page 46 and 47: APPENDIX C U.K., JAPAN, GERMANY, FR
Page 48 and 49: APPENDIX C NMPA INTERNATIONAL SURVE
Page 50 and 51: APPENDIX C The Main Organizations o
Page 52 and 53: APPENDIX C The Main Organizations o
Page 58 and 59: APPENDIX C ITALY UPDATE NMPA INTERN
Page 60 and 61: APPENDIX C SPAIN UPDATE NMPA INTERN
Page 62 and 63: APPENDIX D GLOSSARY OF TERMS INTERN
Page 64 and 65: NMPA: A Brief History As technology
Page 66: n m pa NATIONAL MUSIC PUBLISHERS’

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