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The Guardian - UK
The Guardian - UK
Business
Owen Gibson

Radio Festival 2008: industry heading for tough music rights collection negotiation

Ask anyone in the industry who is to blame for the malais facing commercial radio and there are several stock answers one might expect to hear. Those executives who failed to invest in creativity and talent during the salad days of the early 1990s perhaps? The programme directors who overly relied on jukebox formats? Or aggressive BBC station controllers?

But according to some executives at the Radio Festival in Glasgow a new enemy has hoved into view: call centre operatives wielding the Yellow Pages.

During a session on how music licensing will change in the digital age Jay Crawford, programme director for GMG Radio Scotland - part of the group that also publishes MediaGuardian.co.uk - stood up to berate Peter Leathem from the PPL, which collects money on behalf of performers and record labels, and Andrew Shaw from the MCPS-PRS Alliance, which collects money for composers and publishers.

Crawford said radio listening figures in some towns were plummeting and declared, addressing Leathem and Shaw: "I lay the blame firmly at your door."

He added that the collection societies had employed call centres to go through the Yellow Pages and target hairdressers, cafés and shops to ensure they had the necessary licence to broadcast radio stations. In some cases, their tone was threatening and even misleading, Crawford claimed.

"I've had so many calls, emails and complaints from people. Isn't ironic that after 34 years in the radio industry and continually hearing so much about the death of radio, what's causing the death of radio? The performing rights societies," he said.

Jeremy Vine, compere for the day, said he had also had a deluge of calls to his BBC Radio 2 show about the issue.

Shaw said his organisation did employ call centres to ensure that all premises were licensed. But he added that calls were recorded and there had only been a "handful" of cases where undue pressure had been applied.

Licences started from £66 a year, Shaw said, and he cast doubt on figures cited by Crawford.

Behind all this is a looming negotiation that will be vital to the future health of both industries.

The performing rights societies are looking to negotiate new deals with radio stations to take into account the changing media environment. Meanwhile, record labels are looking for new revenue models to compensate for plummeting CD sales - leading some radio stations to suspect that they have them in their sights.

Leathem said that within the next few months, the PPL would open negotiations on new contracts that might be based on a "per use" model rather than the existing revenue share agreement that was negotiated back in 1993 when the media landscape looked very different.

With so many niche radio stations allowing listeners to precisely target their listening and services like Last.fm and MySpace offering the equivalent of a global jukebox, the music rights collection bodies argue that it is becoming hard to tell where buying a track stops and listening to the radio starts.

New licensing deals are also required for podcasts - an interim agreement has been reached for 30 second clips but negotiations are due to begin on whether full tracks can be used.

Radio stations, for their part, argue that their role in promoting new music and bringing it to a wider audience is undervalued by record labels and performing rights societies.

Leathem and Shaw said it was in the interests of both sides to strike a mutually beneficial deal.

But Nick Piggott, head of creative technology at GCap Media, claimed the collection bodies tended to be "a little harsher" behind closed doors.

Many in and around the record industry cite the simplification and clarification of the licensing issues around music as one of the biggest, and most important challenges, they face.

But with so much at stake, and so many competing interests, it's unlikely to be a harmonious negotiation. Yet, for both commercial radio and the music industry, the clock is ticking.

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