The current system for getting royalty payments to musicians in the United States is seriously hampering the introduction of new, innovative music distribution models, and that problem is not going to get any better in the era of the digital download, leading music experts said Thursday.
As consumers abandon CDs for Internet-based downloads, the industry is filling the gap with new licensing models, but many of the most innovative models are being done internationally, like ISPs abroad bundling unlimited music downloads in with Internet service, Cary Sherman, chairman and CEO of the Recording Industry Association of America (RIAA), said during a panel at the American Bar Association's annual meeting.
“That will expand, but it's hard to do here because we don't have a system of royalty rates" that supports it, Sherman said. The U.S. needs to embrace a percentage rate structure rather than cents-based system, he said.
Distribution of music is not going away, said Bob Kohn, chairman and chief executive of RoyaltyShare, which offers Web-based royalty processing and reporting solutions for the entertainment industry. “It's now becoming a data management problem."
One organization that handles the data is SoundExchange, which governs the music industry's royalty rates. Sherman slammed SoundExchange for delaying payment and using a reporting system that is inaccurate and turns over data in an untimely fashion.
The collection of that information is “getting better every year" but it has a long way to go, Sherman said.
As consumers abandon CDs for Internet-based downloads, the industry is filling the gap with new licensing models, but many of the most innovative models are being done internationally, like ISPs abroad bundling unlimited music downloads in with Internet service, Cary Sherman, chairman and CEO of the Recording Industry Association of America (RIAA), said during a panel at the American Bar Association's annual meeting.
“That will expand, but it's hard to do here because we don't have a system of royalty rates" that supports it, Sherman said. The U.S. needs to embrace a percentage rate structure rather than cents-based system, he said.
Distribution of music is not going away, said Bob Kohn, chairman and chief executive of RoyaltyShare, which offers Web-based royalty processing and reporting solutions for the entertainment industry. “It's now becoming a data management problem."
One organization that handles the data is SoundExchange, which governs the music industry's royalty rates. Sherman slammed SoundExchange for delaying payment and using a reporting system that is inaccurate and turns over data in an untimely fashion.
The collection of that information is “getting better every year" but it has a long way to go, Sherman said.
