hollywood billionaire

Chapter 224 The man behind Capitol Hill
"This is a... huge question."

The sound quality of satellite calls between heaven and earth will not be particularly good, and there will always be a steady white noise in the background.But even so, Han Yi could also hear Jordan Bromley sighing on the other end of the phone.

“The Recording Academy, RIAA, NMPA, NSAI, ASCAP, BMI, Universal, Sony, Warner... Ever since Sony-Bono and the DMCA Act in 1998, our industry has been trying to launch a new solution that adapts to the digital age. But all the chairs, vice-chairmen, presidents, and vice-presidents, including dozens of lawyers like me, have been working hard for two or three years, and yet no draft has been put on the conference table on Capitol Hill."

"why?"

Han Yi asked.He understood the content and structure of the final form of the Music Modernization Act, but little about the lobbying process behind the scenes.This is the case in American politics. They make every process that can be put on the table public, creating an illusion of transparency and openness, but the games that can really influence decision-making and the current situation are hidden in every government lunch in Washington, and the so-called The "out-of-court settlement" was completed quietly while protecting privacy and not disclosing the specific contents to the public.

"Where are you stuck?"

"Stuck at every step, or stuck at the first step that hasn't started yet." Jordan Bromley's response was specious. "To answer this question accurately, we have to start from the beginning."

"Please don't save me the cost of satellite calls." Han Yi joked, "This is included for free."

"Then I can finally rest assured. Let me sort out the timeline... Okay, here's the thing. First of all, there are still many rights and interests that are not protected by the current music copyright law in the United States. The Sony-Bono Act and the Digital Millennium The bill is an outdated thing from the last century. From then to now, the music industry has completely changed. iTunes, SiriusXM, Spotify, the way musicians obtain income has undergone drastic changes, and the rights and interests they need to protect have naturally emerged. There have been earth-shaking changes.”

"For example, if you have studied this, Yi, you should still remember that in the Copyright Act of 1976, which intellectual property rights are not eligible for performance royalties, right?"

"Can I get extra credit by answering this question?" Han Yi chuckled as he thought about two or three years... No, it should be nearly ten years ago, when he stayed up late memorizing the key points of music copyright law. "Recording work, 1976 In the bill, sound recordings do not meet the requirements for obtaining performance royalties. However, in 1995, Congress created something called digital performance rights for sound recordings. From that time on, the copyright owners of sound recordings and recording artists can Received performance royalties from works distributed through the Internet.”

"For a very detailed answer, I am willing to give you ten more points directly."

Jordan Bromley applauded on the other end of the phone.

"The example I just gave illustrates the essence of music copyright issues in the new era. Digital music downloads can be understood as online music purchases. Record companies just moved their products from physical stores to the iTunes music store. That’s it, consumers are still paying for singles or albums, and what they are purchasing is the permanent right to use the sound recordings, whether in the form of CDs or MP3s.”

"Online paid purchases, then, should only involve mechanical licenses and mechanical royalties for the reproduction of copyrighted works in digital and physical formats. Performance royalties are non-existent with digital music purchases and downloads. , because this behavior itself has nothing to do with performance. Both record companies and copyright distribution companies can accept this explanation, because iTunes’ business model is so simple and retro. Therefore, when Apple launched this software in 2001 , and it did not cause any institutional waves in the industry.”

"But a year later, Sirius FM went online, and subsequently merged into Sirius XM in 2008, becoming the world's largest digital radio operator. In the same year, Clear Channel Communications also entered the digital radio field by acquiring iHeartRadio. In the 2010s, this Online listening is booming. As of last year, nearly [-] million Americans were using the services of the four major digital radio giants, Sirius XM, iHeartRadio, Audacy or TuneIn. The best thing is that Billboard magazine will also include digital radio coverage into the calculation formula, which means that even into the Internet era, traditional radio can, at least within the United States, maintain a strong influence on the music industry."

"But at the same time, the emergence of digital radio has also created an irreconcilable benefit distribution problem. Traditional FM radio has a small coverage area and can only provide information dissemination services for local residents within a limited geographical area, such as a city. But the signal of the digital station is transmitted through the network instead of the FM transmitter, which means that as long as you log in to the iHeartRadio mobile app, even a countryman in Iceland can instantly listen to the billboard hits broadcast by KIIS FM in Los Angeles.”

"Do copyright owners want radio stations to obtain such broad broadcast rights? You know, in order to ensure the exposure of their copyright libraries on commercial radio stations, record companies previously gave away a large part of their interests."

"You mean mechanical royalties, right?" Han Yi thought for a moment and asked, "Because radio is considered a promotional tool rather than a performance medium, they don't have to pay mechanical royalties."

"Yes, although record companies can still get performance royalties through PRO, but since copyright distribution companies can get both mechanical licensing and performance royalties through music copyright, why can't they, who own the master copyright? Income distribution, forever It is a more serious and imbalanced problem than income growth."

Jordan Bromley cleared his throat and used the most concise language possible to explain the "man-made disaster" facing the Music Modernization Bill.

"This is the first obstacle to the introduction of the bill. Record companies owned by the three major music groups, as well as companies like HFA and MRI that help copyright owners collect mechanical royalties, want to add this clause to the draft of the Music Modernization Act. inside."

"What terms?" Han Yi frowned, "Let the radio station give up the so-called immunity of publicity channels and pay mechanical royalties to the record company?"

"uh-huh."

"Do they think this kind of clause can be passed?" Han Yi laughed dumbly, "As long as people still regard Billboard as the yardstick for the commercial value of musicians, and as long as Billboard still uses radio station data as the ranking criterion, commercial radio stations and the people behind them will Media groups don’t need to increase their investment to maintain their status as major funders on Capitol Hill, and music groups will never be able to take out another penny from the pockets of radio stations.”

In 2016, the organization that invested the most in political lobbying was the U.S. Chamber of Commerce, the largest lobbying organization in the United States, with a total expenditure of US$1.03 million. It represents 300 million U.S. companies, 2800 state and regional chambers of commerce, 100 overseas chambers of commerce, and 830 businesses. The trade association’s voice on Capitol Hill.Basically to the right of the political spectrum, but often supporting some liberal policies that are less popular with Republicans, or more accurately, Republican populists.

No. 2, the National Association of Realtors, spent $6486 million on lobbying. They can be said to be one of the culprits hidden behind the curtain for the proliferation of subprime mortgages and the occurrence of the 2008 world financial crisis.

Next, Blue Cross Blue Shield, the health insurance partner of Han Music employees, ranked third with $2520.6 million.The national hegemon in the health insurance industry naturally favors the Democratic Party, which advocates big government. No. 4, $2268.3 million American Hospital Association, they do everything they can to win federal government Medicaid and special funding.The Pharmaceutical Research and Manufacturers of America, which has the same appeal, and the American Medical Association followed closely with donations of US$1973 million and US$1941 million.

The reason why medical expenses in the United States remain so high is entirely due to these well-dressed medical representatives who sit in K Street offices and suck out the bones and marrow.

In a place where the parliament can directly and profoundly change the national economy and people's livelihood at the legislative level, these lobbyists are found behind every social phenomenon.Radio has not completely died out yet, and it’s not just because the United States is a country on wheels.There are many other countries in the world where it is difficult to survive without cars, such as Australia, but the radio power of that country in the southern hemisphere is far less powerful.

Founded in 1923, it represents 8300 commercial radio and television stations. This year, it ranks second to Boeing with $1640 million in lobbying expenditures. The National Alliance of Broadcasters, which ranks eighth, is the key to ensuring the long-term influence of American radio. .

For nearly 100 years, this lobbying group has been steadily exporting political donations to Washington. It has never been the largest donor, but it has never fallen out of the top ten.It is no exaggeration to say that many of the members of the House of Representatives sitting on Capitol Hill now have grandfathers and even great-grandfathers who have worked closely with NAB for decades.

In contrast to the recording industry, the largest lobbying force, the Recording Industry Association of America, spent only $439 million this year.Vivendi and Sony spent 181 million and 134 million US dollars, and further down, SoundExchange, ASCAP, and the National Association of Music Copyright Publishers are not even seven figures.If you want to wrestle with the radio station, you can raise your finger to ensure that those poor "music reforms" will never reach the voting stage.

"I feel like this is just like the gun qualification review that Democrats are clamoring for every day, and the illegal immigration control that Republicans are looking forward to every night. They all know that it cannot be done or completed, but for the sake of political correctness in their respective camps, they still have to emphasize it repeatedly."

"If only they really thought so." Jordan Bromley laughed, "This time, the Big Three really want the radio station to bleed. The world's market share is 72%, and the business is booming." At this point, the industry has nothing to occupy and can only seek new growth points. And as long as there are cars in the United States, radio stations will always exist. If the power of radio stations on Capitol Hill is weaker, Universal, Sony and Warner may still I won’t try to trick them. It’s because the big tree of the radio station has grown too lush that some people want to shake some apples down.”

"Greedy, smart, and often insane. The Big Three, HFA, and MRI are individually sending Congress through Rep. Jerry Nadler of New York to change the standards for radio royalty payments."

"Jerry...isn't Jerry related to you?" This familiar name evoked Han Yi's memory, "Are you responsible for the advancement of this matter?"

"We have to make money." Jordan Bromley said bluntly, "And, although the hope is slim, if it passes, it will be a good thing for the entire industry."

“But there’s also the risk that the music industry will lose the support of radio and even television forever.”

"Yes, this is an issue that all stakeholders are covering their eyes and ears, and are unwilling to think about it... Pass this bill first, and solve the flaws later. If there are more conflicts, everyone will get more money. earn."

Jordan breathed a long sigh of relief before continuing.

"Don't think this is all there is to worry about. The conflicts of interest involved in this bill can simply trigger a world war in the music industry. Jerry Nadler in New York is pushing for radio stations to pay, and Virginia's Bob Goodlatte wants to change the way streaming platforms pay music licensing and royalties."

"How to change?"

“Establishing a non-profit governing body to establish a complete database of mechanical license holders of musical works.”

"NMPA's idea, right?"

Han Yi nodded thoughtfully. "It's easy to get the mechanical license for the master tape. Generally speaking, the ownership of the master tape is in the hands of the record company. You can just talk to one person about the price. For music copyright, there are many creators, often more than ten composers, each of whom has a hundred percent share. Everyone has the right to veto, and it is troublesome to get them together and package it. The platform is too lazy to waste time and energy, so it directly submits a notice of intention to pay to the Copyright Office. During the process of identifying the copyright owner, if If the owner dies or has not registered with the Copyright Office, the money cannot be traced, resulting in a copyright black box situation. Every year, seven or eight figures of royalties are saved by the platform in this way.”

"So, the copyright issuer wants to build a database so that the platform can't find an excuse not to pay... Moreover, if I'm not wrong, they want to ask the platform to directly pay a package of deposits to this new organization, right? No matter what Whether you use it or not, we’ll decide after giving you the money.”

"Topics in the industry are only interesting when you talk to professionals." Jordan Bromley sighed, "Yes, this is a crucial part of Goodlatte's draft."

"Since we are going to create a new organization, why not bring in record companies?" Han Yi folded his arms and muttered, "Is it because... we have already contacted record companies, but the benefits they have received from the streaming media platform have already been Enough that you don’t want to make changes anytime soon?”

"Yi, has anyone else told you about this?"

"No." Han Yi replied sincerely, "This is the first time I have heard of the Goodlatte draft."

"Then I still have the same point of view. In terms of the music industry, you are a genius." Jordan Bromley has never concealed his appreciation for Han Yi's industry insights. "At present, the overall attitude of the record companies It is rejected, but some labels, as far as I know, are also trying to persuade the group to endorse this draft. HFA and MRI have basically agreed to join."

"Did you help them solve a pain point?"

"A big pain point."

Jordan Bromley responded in the affirmative without any hesitation.

“Non-profit royalty organizations, such as BMI and ASCAP, manage millions of music copyrights. Because they are too large, all their actions are subject to federal supervision. One of them is that they cannot use the The music licensees said no.”

“This also means that the bargaining power of these large institutions is severely limited. Although prices can still be negotiated, if there is any dispute over the price, the authorized party can directly apply to the court for mediation, and the federal court will determine the final licensing fee. "

"Yi, do you know how they currently mediate?"

"I can't remember it clearly." This trivial knowledge of copyright law can easily become blurred if it is not used for too long. "It seems... there is a special circuit court to deal with this matter."

"It's almost the same, but it's not a specialized circuit court." Jordan responded. "The government is more strict than this. They assign a special judge to each agency."

"I understand." Han Yi suddenly realized, "Assigning a special supervisor will make the judge feel that his task is to restrict these non-profit institutions to prevent them from forming a trust. Whether the job is done well or not depends on how many authorized parties there are. Satisfied... So, it often happens that judges are too friendly to authorized parties, resulting in judgment prices that are too low, and the interests of BMI, ASCAP and their agents will be harmed. Is this right?"

"Yes." Jordan did not praise Han Yi again this time, because the latter's super analytical ability was far beyond the normal level, and even made him feel a little afraid.

It's not that Jordan has any ambitions, but that human beings, especially men, always have some unconscious vigilance towards rising stars with too dazzling abilities.

No alpha wolf or lion wants to be replaced.

The presidents and vice presidents of the three major music groups probably view Han Yi, Han Music and "Cold Water" in the same way.

"Goodlath's plan is to change the way the courts handle these licensing disputes. From assigning dedicated judges to randomly selecting judges, the judge must consider the licensing price and market price of similar works and uses when making a ruling. The environment is taken into consideration.”

"In this way, the collar around the neck will be much looser. Although I can't completely get rid of it, I have to plan step by step." Han Yi took a sip of Arizona ice tea, and the cool and refreshing liquid went into his throat, stimulating his thinking to become more active. Reminds him of an agency Jordan Bromley just left out.

"HFA and MRI are both joining, so why doesn't SoundExchange join? There are three other major players, so what are they hesitating about?"

"They also have ... two other completely different drafts they're endorsing."

At this point, Jordan himself felt a bit outrageous. With one bill, so many different directions of operation were going on at the same time.

"The Big Three have the strongest influence here in California, so they found local Representative Darrell Issa and are running something called the CLASSICS draft. This draft is actually very simple. According to the Copyright Act, 1972 In the past, sound recordings were not protected by federal laws. There were only miscellaneous state-level laws with some contradictory provisions, which caused great harm to master copyright owners. Therefore, Universal, Sony and Warner want to Solve this problem once and for all, so that copyright ownership and royalty claims will not become more troublesome after the death of legends such as the Beatles and Rolling Stones."

"And SoundExchange is fully supporting a draft called the Music Producer Income Distribution Act. Another congressman from New York, Joseph Crowley's team is writing the draft. The main content, in short, is Ask SoundExchange, the nonprofit organization created by Congress to distribute recording royalties, to withhold a portion and distribute it to producers, mixers, and post-production engineers who have worked on the music."

"What good will this do to SoundExchange?" Han Yi was a little confused, "The money they get will not be much more."

"They don't care about this either." Jordan Bromley laughed. "Managers of non-profit organizations under the government are ambitious to continue to climb up. Leading the passage of a bill can increase their influence. And if you can get a good reputation in the music industry and get full support from a specific group, why not do it? The votes of disadvantaged groups are also votes, and they are the best votes to win."

"Okay, let me think about it..." Han Yi rubbed his temples, closed his eyes and meditated, "That is to say, before this bill is formed, there are already four groups of people doing four different things ?”

"Correct."

"Then...if someone can integrate the four forces, his reputation in the music industry should reach a peak, right?"

"You heard it too, Yi. The plans of record companies, HFA and MRI will anger radio stations, the plans of NMPA, streaming platforms, and even Google and Amazon will try their best to obstruct them. The plans of BMI and ASCAP may be used by movie companies and advertising companies. and media groups will get involved and vote against it, because it will increase the cost of using their music. SoundExchange is okay, but the influence is too low and the reform is too small, and it cannot be substantial for the goals you want to achieve. s help."

"Record companies, music copyright distribution companies, industry associations, mechanical royalty organizations, performance royalty organizations, streaming media platforms, radio stations, members of Congress, and some external forces that can influence the music industry want to promote an epoch-making A meaningful copyright bill must at least win the support of at least two-thirds of the above-mentioned players. These people... may fight each other if they look at each other. If you want them to endorse the same bill, you will definitely have to pay huge sacrifices and concessions .”

"My suggestion is to join them first, observe the agenda from the inside, clarify the main interests, contradictions and conflicts, and then decide who to win over and whom to abandon based on how well they fit with you."

"good idea."

Han Yi recognized Jordan's prudent handling style.You can never be too careful when dealing with people, especially people like now, on Capitol Hill and on K Street.

"So do you have any suggestions, Jordan? If I want to join this game, where should I start?"

"I don't dare to suggest anything, Yi. I'm still learning about the bill."

Jordan's tone was quite humble.

"But if I were you, I would..."

"Make the following plan."

(End of this chapter)