RIAA’s Cary Sherman talks the Industry, Piracy, the DMCA, Google, Internet Radio, Terrestrial Performance Right in Sound Recordings, the Cultural Divide, and more.
Recording Industry Association of America CEO Cary Sherman has been in the music industry for forty roller-coaster years. And now, Part 1.
In reading the interview, if you prefer to skip to Sherman’s take on a particular subject, please click the desired link, below. Or, just enjoy the read.
Audio clips are interspersed throughout.
Contents
The Record Industry – Then and Now
Piracy, The DMCA and Alternative Voluntary Collaborations
SOPA/PIPA, Google, Tech, and The Cultural Divide
Within the Music Industry: Terrestrial Performance Right in Sound Recordings, 114i, and Compulsory Licenses
Internet Radio, Consent Decrees, and the Split of the Royalty Pie
The Record Industry – Past/Present/Future Tense
Hear Cary Sherman on the Decades-Long Rollercoaster Ride of the Record Label Industry
Probably few, if any, industries have been affected as intensely as the record label industry, in terms of the changes that have gone on in the last couple of decades. Can you tell me how this has affected you, both personally and professionally, as you’ve seen this evolution and devolution in the record industry?
Truthfully, it’s been devastating. I’ve represented this industry for a very long period of time, starting in about 1974. So I was there for a period of tremendous growth and excitement and opportunity, when there was a move to CDs, which opened up enormous revenue opportunities and enormous opportunities for new art and artists. A&R was thriving, marketing was innovative and experimental, and people were willing to spend money on things; and it just kept growing and growing and growing, and everything was great.
And then, all of a sudden, it all started to decline, and the belt tightening got tighter and tighter and tighter. And friends that I’d accumulated over decades were suddenly being let go; and the more senior they were, the greater the risk that they would be let go, as businesses had to basically resize their operations to be more consistent with the new level of revenues. And every year there would be further contraction and further contraction, and more and more friends would disappear. And when they disappeared, there weren’t opportunities for them to reemerge at another company. It used to be that when you left one company in this industry, you would wind up at another, because there were so many in need of that particular expertise. Because the expertise that we have in this industry is unique. It is really unique. It’s a very small community, and a very strong community, and people really respect each other’s skills. Yet there were no openings any longer and, to this day, when I look through my rolodex — which is an old term, but I still refer to that, even if it’s on the computer — and I see the names that are in there of people I worked with so closely over so many years. It causes great sadness in me for all those people who are either gone from the industry or working in some completely different part of it. So, it’s been very sad.
On the other hand, it’s been exciting in terms of watching the industry transform itself, and an entirely new class of entrepreneurs arises within the companies, who could begin to figure out how to monetize in completely new ways. It’s been fascinating to watch the evolution of business models, the evolution of industry standards for deals, the evolution of relationships with artists, relationships with music services, with tech companies, the partnerships.
Do you feel that it’s going in the right direction again now?
Definitely.
Yes?
Definitely.
Why?
Well, for one thing, the industries revenues have been stable for four years running, which is, considering what preceded it, a very significant achievement. We haven’t seen growth yet, but we’ve seen stabilization with the opportunity for growth.
Are you talking specifically about the labels?
I’m talking about the record company revenues.
Ok.
I can’t speak to all the other elements of the industry, such as music publishing and concerts and so on and so forth, but record company investment has been, really, the engine that drives most of the industry. Sheet music doesn’t become valuable until it’s been recorded, and people can hear it, and people can sing it, and people can play it. And when that happens, performance royalties start to develop for the songwriter, and mechanical royalties, and sync opportunities, and so on. So it’s really important that we have a healthy record industry where that investment can be made, because, without it, the concert opportunities, the songwriter royalty streams, all of those begin to dry up, if you don’t have the driving force of the recording itself.
Hear Cary Sherman on The Record Companies as a Driving Force in the Music Industry
How would you say that artist development has changed in scope in the last fifteen years?
It’s interesting that the companies have really tried to avoid cutting back on their artists’ development. They understand that investment in new artists is their lifeblood, that without new artists coming in, the opportunities for growth and for new music are not going to be there. So, what they have tended to do is be much more hardnosed about whether an artist is likely to succeed or not. So they’ve been quicker to cut an artist from the roster, and they’ve been trying not to avoid signing as many artists as they have in the past. Now, I think they are still signingfewer artists than they did, but they seem to be making a conscious decision to continue to sign artists, but to bring them in with a little bit less in the way of advances. They spend less on marketing and promotion; so you spread what you’ve got around a little thinner than you did before, but they are trying to keep the flow of new artists going. I don’t know what the numbers would actually show. I can’t imagine that they’re signing as many artists as they used to. They have to be signing less, but they are making a real effort to keep the new blood flowing.
What about development in terms of actual direction? Do you think there’s less freedom for individual artists to do what they want to do, as opposed to what’s going to bring in the best revenue?
I’ve always felt thatthere’s no one-size-fits-all rule for how record labels deal with artists, in terms of how much direction they give them in terms of their career path and their sound. It varies completely depending on the label, the A&R people at the label, and the artist. You know, sign an artist at a young age, they need more work, they need more coaching, they need more guidance, and they need introduction to producers, to songwriters, whatever. Sign somebody late in their career and they’ve already pretty much decided what their future is going to be, and either the label wants it or doesn’t, but they’re not going to suddenly try and change the career path of a mature artist. And there is everything in-between and it completely depends, therefore, on that artist’s particular ideas about what his or her music should be like, and what their career plans are, and whether they want to be major performing artists,whether they want to be niche artists; I mean, there just is no rule and, therefore, it’s kind of hard to say whether practices have changed in that respect, when they were always so different in the first place.
It used to be that everyone wanted the record deal. They wanted the deal. Do you find that not as many people are going in that direction of I want that record deal, and instead wanting to do more of an independent, kind of internet-based endeavor?
IFPI (International Federation of the Phonographic Industry) did a survey a few years ago, or a couple of years ago, and I don’t remember the number; it might have been 75%, or something like that, of the artists interviewed wanted a record deal. So, I don’t know how that compares with numbers in the past, but it’s still the overwhelming majority of people would like a record deal. Maybe because it’s a validation of the value of the artist. Certainly from a business perspective, it’s just a smart decision because it means you can focus on your art instead of worrying about how to market yourself, promote yourself, how to do all the things that are necessary to really pursue a career. You know, [for] a true artist, having the time and freedom to hone his or her craft and actually spend your time advancing your art rather than your career, is a luxury, and signing with a record label, whether it’s a major or an indy, gives you the opportunity to do that; so it’s not a surprise that people would want to do that.
But there are some artists who really want to pursue an independent path and want the feeling of total creative freedom — not that they wouldn’t necessarily have had creative freedom when they signed with a record label, but they may not want to feel like they have to answer to anybody about anything, or have to compromise on anything, so they may choose to do it yourself. That’s now available, andmore power to them. It just means that they’ll have to make different compromises along the way with respect to how they spend their time. But that’s the beauty of what we’ve got available today. Different artists can pursue different career paths, each with the same passion.
Piracy, The DMCA and Alternative Voluntary Collaborations
Hear Cary Sherman on Working with Google
On a different note, you just recently didan op-ed piece on the hundred millionth takedown notice by Google. What do you think about the DMCA (Digital Millennium Copyright Act)? Is it effective?
No.The DMCA has not worked well for creators, because it has forced creators to spend an inordinate amount of time and energy engaging in acts which are increasingly futile, which is trying to remove all pirated works from the internet. So, we need a better way. It’s not just hard on us; it’s hard on the tech companies, who are responding to these notices, only to be replaced by other illegal copies of the same music. So, there must be a better way for all of us to get about the job of reducing infringement online.
Do you have any ideas as to what would be a suitable replacement for the DMCA?
Well, first of all, I wouldn’t think in terms of legislation, because legislation is increasingly difficult to get in Washington, and copyright legislation is increasingly contentious as subject matter. So, we’ve much more focused on voluntary collaborations. We’ve worked with ISPs, with advertisers, with advertising networks and exchanges, with registries and registrars, with payment processors. We’d like to work with search engines, too.
Would they like to work with you?
Well, Google has been the search engine that we’ve worked with the most.They’ve made more of an effort to be responsive to copyright infringement issues in the last few years than they have for many years before that. They do takedowns much more quickly. They give us bulk takedown tools that make it more efficient, for us and for them, to notify them of links that should be removed. They’ve even come up with ideas about how to change their algorithm to reduce the rankings of infringing sites. The problem is that we haven’t seen much of an impact from all of that. Yes, the bad links come down quicker, but they are still replaced by equally bad links just as quickly. We have takedown tools for bulk takedowns, but we’re still only able to identify a fraction of the infringements, because that’s all we’re able to search, given the tools that they make available to us.
When you say “to us,” are you talking about to RIAA?
To RIAA in particular, and we’re the lucky ones. We actually have the capacity to use major technologies and major vendors to do this in a very efficient way. Imagine the small creator who’s trying to protect his or her own work. It’s impossible.
It’s simply not realistic and it’s simply not fair for creators to be put in the position of being their own policemen of everything on this vast worldwide network we call the internet; and they bear sole responsibility for solving this problem? We need much more of a collaborative effort by the tech companies and everybody else involved in the internet ecosystem, who are benefiting from this new communications media.
So when you talk about the voluntary collaborations that you are doing, would that also include a small publisher or individual creator?
We would like to come up with mechanisms that will actually benefit everybody. We can’t speak for everybody. We can’t speak for every type of creator, let alone big ones and small ones alike, but we can certainly endorse a conversation, a dialogue, among all the stake holders, to try and arrive at practical steps that can be taken that will improve the situation for everybody. And we think that there must be things that can be done technically that would make a difference.
I’m sure Google has much more capability than they are showing.
They are the foremost technology company in the world. One would think that, if they put their mind to it, they would be able to find some very creative solutions to some very difficult issues.
Yes, did you see the Time Magazine cover “Can Google Solve Death?”
(Laughter)
So, if they’re tackling death, you’d think they could do this.
You would think so.
SOPA/PIPA, Google, Tech, and The Cultural Divide
Hear Cary Sherman on the Agenda of Those Who Stopped SOPA/PIPA
Let me go back: You mentioned legislation. How devastating was SOPA/PIPA (Stop Online Piracy Act/Protect IP ACT)?
SOPA/PIPA was an effort to make it easier to takedown bad sites more quickly with a judicial process, complete with due process.
And when you say bad, it was supposedly mainly foreign sites…
Yes, it was mainly foreign, rogue sites, and it would have to be provedto a court’s satisfaction that they were indeed rogue sites that should be taken down in some respect. And it could result in court orders that you couldn’t advertise on those sites; or the real issue became whether you could point to those sites under the DNS (Domain Name System) system and so on. The fact of the matter is there were going to be very few sites that were going to easily fit within the very high standard that was set in that legislation. Pirate Bay probably would have easily passed muster under that test, but there were very few other sites that were going to be able to be shown to a court of law, in an expedited proceeding, that these were bad guys. We can’t gather the evidence to prove it. How do you establish that Mp3Skull is 99% illegal, when we don’t have access to everything on the site?
So are you complaining about that bill?
I’m saying that that bill was never going to be a panacea for us. We supported that bill because it was a step in the right direction. It was basically serving notice that the judicial system and the Congress were going to take steps to do something about counterfeit products that were endangering American lives, that it was going to do something about pirate sites that were stealing Americans’ creativity, that Congress was going to speak up and arrange for a system that, if not in real time, at least quicker, was going to do something about a very significant problem. It took us six years to get a decision against Grokster. It took us four years to get a decision against LimeWire. How much damage was done by those systems, those services, in the time until we got the wheels of justice to finally turn and get a judicial ruling?
And then what was the agenda of the people who opposed it and basically shut it down?
One can obviously make claims that the agenda was to allow infringement to continue, but, in fairness, people who look at the same piece of legislation from a different perspective often read a different thing. We could look at the standard in SOPA and PIPA and say it was too high, because it was going to be very hard for us to be able to produce the evidence that was necessary for a court to make a decision that a particular site met that high standard; and a tech company could look at that same piece of legislation and think about how it might be abused by some malevolent copyright owner, or even a competitor, or somebody who wanted to abuse that provision and use it in some way that would unfairly shut down a site that really wasn’t rogue. They just read it differently. Whether that was with good intent or bad intent is not for me to say.
All I can say is that they came at it looking at it very differently, and it demonstrated to us that there had been an absence of sufficient communication to really understand each other’s perspective, because it should have never reached the point where there would be such a gulf in understanding that they wouldn’t sit down to work it out as we should.
Ok, well then let’s just talk about agendas. What would you say is Google’s agenda in terms of copyright, or do they have one?
Google is a big company. It really is, and that’s one of the challenges that we face in dealing with them. On the one hand, they are a partner in selling music and offering subscription services, in offering locker services, in making music readily available on the Android operating system so that people can enjoy it on their mobile phones and their tablets and everything else. They are also a company that makes a lot of money from advertising, and sometimes they are not sufficiently sensitive to exactly what it is that they are advertising or making money from.
I did just read that 97% of their income, given everything, 97% comes from advertising.
That could well be true. Advertising is by far the overwhelming source of their revenues. They’ve got a search department that believes very strongly in basically indexing the world’s information and making it available to everyone. And they all have different agendas; they have different business agendas, they have different philosophies. So, if you’re in the search department and you think that everything should be available to anyone, any restriction on that access is to them a form of censorship.
Well, I think that also goes to the difference, the perceived difference, between information, which you just mentioned, and expression, creative expression. And I think they lump it all together, so everybody should have access to anybody’s creations.
That’s true, they do, and they use the term censorship very broadly, as well, to refer to any restriction on access. You know, I have a much different definition of censorship than they do, but I don’t doubt their strongly held view that information should be available and there shouldn’t be any restrictions on it. And when you talk with them about it, they’ll talk about repressive regimes like Iran or China or North Korea, and they look at copyright as being a similar form of possible repression.
Hear Cary Sherman on The Cultural Divide
And patents?
Well, even patents. In fairness to Google, they have not been in favor of patents, as a matter of philosophy. They prefer — other than their secret algorithms, and they do protect their trade secrets very strongly — they never tried to get a lot of patents on their technological developments. It’s not where their heads were at. Now they’re much more focused on patents, because patents have been used against them and they’ve needed to defend themselves, but I must say that on intellectual property, generally, they’ve been pretty consistent. They don’t particularly like intellectual property, and they view it as a necessary evil when they claim patent protection themselves.
So, they have a certain culture which reflects the particular world in which they live and the environment in which they grew up, and it just is what it is; and we have to try and bridge that divide and begin to get across that people’s livelihoods depend on being able to protect their creativity, to have a property right in what they create, so that they can earn a living from it and go on creating it. And that’s something that has not been a part of their experience so much, and therefore it isn’t foremost in their minds. And we have to begin having dialogue about that, because we’re never going to solve this problem fighting with each other. We need to be solving this problem by working together.
What are the ways that music industries, or creative industries, and tech industries together are really accomplishing something; and similarly, in the other sense, what are the biggest challenges?
The biggest challenge is the cultural divide. It really is a cultural divide, and yet techies are among the biggest music fans in this country. They love music. They all listen to music. It’s part of their lives, and somehow we need to get across the notion that the creation of music is something that is worth protecting, as well as enjoying.
And what do you think it would take to change that public perception? I think it is getting more and more pervasive, because, well, it’s a more young culture, and logically speaking, it is the future.
I think a lot of these problems ultimately take care of themselves. There was a time when our business interests were very different from the ISPs, for example, and we were actually in litigation with ISPs. Ten years later, our business interests and their interests converged. They weren’t the same, but they were much more compatible. ISPs were now finding that pirates were using up their valuable bandwidth rather than expanding their market penetration. They had no interest in supporting piracy, but now they actually had an interest in helping prevent piracy. They didn’t want to do it in a heavy-handed way, or in a way that would make their customers dislike them; but they certainly wanted to educate their customers about piracy and minimize piracy and work with us to provide content to their customers, so that we would both benefit.
That was an example of how business interests which beginin a divergent way can become convergent; and I’m hopeful that over the long term, the interests of Google and other tech companies will converge with the creative industries, because let’s face it, music is a universally desired form of content. Everybody loves music, and we find it veryempowering to realize that Google wants to offer music services. And Amazon and Apple and Facebook and Twitter and Microsoft — the giants of the tech industry — all view music as important to their futures. They drive the use of social networks, they drive innovation. If it were not for music, the iPod would not have been the fabulous invention it was, because it would have been a beautiful box with no content.
So, music is an incredible force in terms of the tech industry. We’ve been collaborating, when you think about it, with the tech industry for a hundred years, music and tech. If you look at the display case that we’ve got in the lobby, of all the ways in which music has driven the implementation of new technologies, the acceptance of new technologies, the distribution of new technologies,and that starts with the wax cylinder that goes all the way up to the MP3 player and beyond. So, we have worked together, and we ought to be working together again, and I think that, ultimately, we will be.
Within the Music Industry: Terrestrial Performance Right in Sound Recordings, 114i, and Compulsory Licenses
Hear Cary Sherman on Collaborating with ISPs and Beyond
What about within the music industry itself? It seems that there are a lot of different agendas within the industry, and that they often have an equally hard time coming together on issues and, therefore, can’t move forward. That also, I think, has to do with legislative problems, where there’s no unified voice of the music industry. Do you agree with that?
Well, that certainly was a problem for many years, and certainly there are different elements within the industry that have different business interests which, therefore, drive us in different directions; but we have done a much better job over the last six, eight years than ever before in terms of speaking with a unified voice. We really have. There was a time when record companies and music publishers and performance rights organizations and musician’s unions would all take different, inconsistent, and conflicting positions on the same set of issues. We now try to work those things out in advance. We talk with each other and we try to find common ground rather than pursue objectives that basically wind up in nobody getting anything.
So, we’ve done a much better job. That doesn’t mean that we’ve been completely successful or that there isn’t a lot more work to do, but at least we are driving in the same direction.
One example that is happening now: I’m wondering where you stand on the efforts to achieve a terrestrial performance right in sound recordings.
That’s a very good example. For years, this was something that artists and labels were trying to do, and we had to try to do it without the support of songwriters, publishers, and PROs; but several years ago, we were able to come to an understanding, where they would be able to support our efforts, and we were more than willing to put in provisions that would ensure that their interests were protected. That is a model for how we ought to be functioning. It enabled them to take the high ground and for us to try and finally get the kind of economic justice to which artists and labels have been entitled forever but have not yet gotten, which is to be paid by terrestrial radio. So, that’s a model we should emulate to the extent we possibly can.
Many music creator groups have opted merely not to oppose, while some have openly asked why the elimination of controlled composition rates on mechanical royalties hasn’t been tied to the issue as in was in 1995 when you argued successfully for a digital performance right. Is that a compromise that you think could be reached?
Well, the issues are really totally unrelated. That question really goes to whether it’s appropriate for one group of copyright owners to be opportunistic about the needs of another copyright group, in terms of getting legislation passed. So, it is perfectly possible for somebody to say we will support your effort to get the same rights as we have, but only if you give us something that we want but haven’t otherwise been able to achieve. You can do that, but that doesn’t make it right.
So that’s just using leverage?
It’s using leverage, and that’s not unheard of, and, in fact, it’s been done before many times in legislation that we wanted. We gave away our right to controlled compositions in digital downloads only in order to get the support of the publishers for the right to be paid for digital downloads. It wasn’t as though we were asking for something that gave us a benefit over music publishers. It was an unrelated issue, really. We gave in to it. I don’t think that’s a model of good policymaking. I don’t think that anybody should be proud of it.
They did it and we went along. You know, the reality is that controlled compositions are no longer as important as they once were anyway.So it’s not a big economic issue any longer. In fact, when we’ve discussed this with the publishers, they said they really don’t care about the issue any more.
So you think there are better ways…
I think there are certainly better ways to treat fellow copyright owners, fellow creators, rather than looking for opportunities to be opportunistic about the other party’s needs.
Which is, I think, what you and David Israelite were saying at the annual NMPA meeting, right?
That’s certainly something I was trying to say. (Laughter)
(Laughter) Oh.
I think David agrees with it in principle, but what’s the expression? The devil is in the details. Right? So, we have to see how a particular legislative issue gets worked out.
But at least there seems to be the impetus to work together.
Absolutely, I’ve enjoyed very much working with David. I’ve had a very long relationship with the publishers. It’s always been an interesting relationship, and I think that the issues that we’re facing together are much more important than the issues that each of us has separately. I think we should be working together at every opportunity, because we are so much stronger when we work together.
What about 114iand the attempt to rework the language? Are there problems coming together with that?
Well, that’s something that’s going on right now. And we made very clear to the PROs, at the beginning, that the initial version of that legislation, as it was proposed, would create problems for us; and we were sure that they didn’t want to hurt the interests of artists or labels any more than we would want to hurt the interests of songwriters and publishers. And we proposed different ways of accomplishing the same objective that would not hurt us, but still benefit them. They have had different views, we have had different views, and we have been trying to reconcile those views.
Those discussions are ongoing right now and hopefully we will arrive at a consensus that we can all support, so that we throw our weight behind the legislation, because we certainly don’t want to be throwing our weight against the legislation. We want to be working with the other elements in the industry, and we hope they want to work with us.
Has the idea of a compulsory license for sound recordings been seriously considered by the recording industry, and what do you think would be the merits or not of that?
We’ve agreed to a compulsory license for sound recordings. That’s how Pandora is licensed. That’s how SiriusXM is licensed. We agreed to it in 1998 as part of the DMCA, when we recognized that in order to make lawful the thousands of internet radio stations that had already begun operating, that we, as a practical matter, were never going to be able to get the licenses they needed to operate lawfully, that putting them under a statutory license made more sense. It’s not something we wanted to do, but it was a concession to practicality and a way to move forward that drove us to accept that compulsory license.
I think all compulsory licenses, in the end, are concessions to practicality. It’s just a way of making sure that the system can operate efficiently — and we all prefer to operate in the marketplace — but when you have tens of millions of songs and recordings, and thousands upon thousands of copyright owners, and licensing becomes impractical — especially when people are trying to license ten million songs at one time — sometimes you need a mechanism like a compulsory license or some voluntary collective system — which we obviously prefer where possible — you need something. So it isn’t as though, because I would prefer a marketplace solution, that I’m going to oppose a compulsory license under any circumstance. We have to agree to it when transactional considerations warrant.
Internet Radio, Consent Decrees, and the Split of the Royalty Pie
Hear Cary Sherman on Whether There is Unity Within the Music Industry
What about certain internet radio situations, where the record labels and artists have a much bigger piece of the royalty pie than songwriters and publishers? Can you explain that to me?
The royalty rates that are enjoyed by songwriters and publishers on the one hand, and artists and labels on the other hand, are a product of many things. One is the happenstance of history, and the way that the laws evolved and the practices evolved. And the other is the different economics of those two markets. Inthe first instance, you’ve got composers and publishers who basically organized themselves into competing PROs, and the Justice Department felt that they had too much market power and, therefore, had to be put under a consent decree. That all happened back in the 1940s, which was a very long time ago, but it was occasioned by the antitrust laws as they existed and the particular collectives that were formed by composers andpublishers. So, they happen to operate under a consent decree. When we got the equivalent right, the first time in 1995 — the ability to license public performances, limited to digital — we operated under a statutory license. So, we were subject to government oversight, the same as the PROs were, but instead of operating under aconsent decree administered by a court, we operated under a tribunal, the Copyright Royalty Board, administered by the Library of Congress. They’re different because they technically have exclusive rights but they can’t really exercise them, and we don’t have exclusive rights but we’re operating under a compulsory license.
They’re similar but different. They wound up with very different rates. The songwriters and publishers enjoyed a public performance right against terrestrial broadcasters from the very beginning. So, they’ve been earning billions, billions of dollars over many years, while artists and labels got nothing at all. But they had agreed on a percentage of royalties from those broadcasters for years and years. It was in the range of 3 to 4%. So, with that history, they wound up applying those same percentage approaches to the new digital services. So, the benefit that they enjoyed over decades of being paid billions of dollars in royalties by broadcasters wound up determining the rate that they got for the new digital music services, which, because those digital music services haven’t monetized very well, wound up paying them very little.
We, on the other hand, didn’t get paid billions of dollars all those years, but we started with a completely clean slate, when it came to trying to figure out what royalty rates we should be paid by the digital music services. So, we wound up getting paid more, and the songwriters and publishers wound up getting paid less. It’s not anybody’s fault. It’s just a happenstance of the way that the two marketplaces evolved.
Then there’s a whole separate issue, which is the economics of those marketplaces. You know, what is the investment that is made bypublishers? What is the risk of the investment? What is the risk of that capital? What is the return on investment that they get? What kind of margin do they earn? Now do the same analysis with respect to record labels. How much money did they put at risk and how risky is it? And what kind of return on investment do they actually get? What’s their margin? The margin for publishers is much higher than for record labels. The amount invested by record labels is much greater than for publishers, and the risk is much greater. So, it’s not surprising that if you went before a copyright royalty board, they would come up with different royalty rates for the different types of works. So, it’s just the way it is, because of the economics of the marketplace, as well as the unique histories of each of those segments of the industry.
There’s a lot of talk now about trying to get rid of the consent decrees or adjust them away from 1940s thinking. How do you feel about that?
I think that they should be reopened. I think that the notion that the PROs are operating under consent decrees that were basically developed in 1948 — and I think they may have been tweaked or something in 2000 — The market, the world, is completely different than it was then. It’s absurd to think that they should be operating under that consent decree. It should be completely rewritten.
Hear Cary Sherman on the Split of the Internet Royalty Pie
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