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Creators Alliance announced at Grammy Awards, will “advise” on streaming

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The Recording Academy and an alliance of A-list musicians have formed the Creators Alliance, an advocacy group that hopes to influence U.S. music licensing regulations for streaming services. the venture was announced by Neil Portnow, President and CEO of The Recording Academy.

Apocalyptically evoking a bleak future, Portnow said “What if we’re watching the Grammys a few years from now, and there’s no Best New Artist award because there aren’t enough talented new artists and songwriters who are actually able to make a living from their craft?”

The Creators Alliance web page credits a group called Managers Think Tank as an advisor to the advocacy effort.

The self-appointed role of Creators Alliance is that of influencer, using a “powerful, amplified voice” to guide government policy in what is possibly a crucial year on the legal side of streaming. In 2015 stakeholders in the non-interactive (i.e. Internet radio) part of the industry are arguing for higher or lower statutory rates applied to Pandora and other radio-like services. (There is no mention of broadcast radio in the Creators Alliance marketing materials; over-the-air use of recordings is exempt from licensing royalties entirely.)

There is a general push-pull between content creators (performers, labels, songwriters, publishers) and content publishers (non-interactive and interactive streaming platforms). The tug-or-war is normal supply-vs.-demand argument, and also marks conflicting business philosophies and conceptions of the future. Content rights-holders have seen music product sales (CDs and file downloads) slide quickly to the downside in 2013 and 2014, as streaming use grows apace. They argue for higher licensing percentages to replace lost margins in album sales. Streaming services say that audience scale is the answer, and licensing policies should cultivate fast growth of streaming platforms. The argument there is for lower rates (whether statutory licensing of non-interactive services or negotiated rates for on-demand platforms) which might lure more users and create more revenue.

The U.S. Copyright Royalty Board (CRB) will conclude its rate-setting process in December of this year, setting new statutory rates for Internet radio that will apply during 2016-2020.

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Brad Hill

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