Good morning, ladies and gentlemen, the subcommittee on the property of the internet will come to order. Recess of the subcommittee at any time. We welcome all our witnesses today. Let me begin by adjusting my chair. Thank you. Good morning, welcome to the second of two hearing this, two weeks ago this subcommittee heard from your, Music Industry representatives about their concerns with the state of music licensing, the right was. Looking around the room, we can conclude you have more than a passing casual interest in this issue and welcome all of you here today. At the earlier meeting on mentioned my fondness for oldtime bluegrass and country. I dont know if that fostered the popularity across the country, probably hasnt but i will continue to try to do that and i will make my Opening Statement very brief because we have a long day ahead of us but witnesses in this panel may not agree on everything but they agree music and rich as the world in which we live. Since this is part ii of the music licensing hearing i wont repeat the music issues that Congress Needs to address. I hope the effort to improve the music licensing system we dont lose sight of the fact creators need to be paid for their work like everyone else in this room. Creative industries are the envy of the worlds but im not sure the music licensing system is. It may be time for a change. That will be exposed today as we go through this arduous journey of productive the journey. I yield back the balance of my time in welcoming back the gentleman for his Opening Statement. Thank you for holding the second hearing the music licensing under title 17. At the first hearing two weeks ago we heard from a Diverse Panel on performance songwriters and publishers, television licensees and Digital Music delivery service. There are varying points of view, it was widespread agreement in the of comprehensive reform. The current licensing system is rife with inconsistent rules and inequity that make no rational sense. No one could write the law the way it stands today. The Internet Radio compete against each other and different rules for compensating songwriters performances exhuming theyre paid for their work. And in the music echoes system with us today, they provide critical programming including news, weather and emergency alerts and strong Public Service partnerships in the communities they serve. Also represent Digital Radio such as serious sex them siriusxm and pandora providing using new innovative ways. We have differing views about how to present these issues but i presented discussion how to come together to improve the music licensing system. It is so haphazard, in large part they would develop at different times in response to different innovations of the music and technology industry. Rather than continuing to adjust the system in piecemeal fashion i believe we should take a comprehensive approach. At this years grammys on the hills event, the president and ceo close to the industry to coalesce behind a single bill, was later echoed by House Majority leader nancy pelosi who agreed to the time had come for congress to address these issues in one package. That is why it places the first hearing in music licensing to develop a comprehensive omnibus bill which some people the music bug copyright law that congress could get out of the business and create a level Playing Field. The lawsuit should be platform neutral and all music created should receive fair market compensation for their work. Theres a growing consensus the system is in need of reform. In addition to this committees ongoing copyright review the office is conducting music licensing study. This week concluded series of round tables around a country, in los angeles and new york. The Commerce Department of stating copyright including music licensing for the digital age. The department of justice is conducting a much needed review of the Consent Decrees that govern the bmi. Two Performance Rights organizations distributing royalties. I hope the deal is a worthy will be completed quickly as time is of the essence for all parties involved. Todays hearing is an important step in the review to update the music licensing system. We will hear from todays witnesses about specific issues they believe should be addressed about how to best enact meaningful comprehensive reform. I have no doubt the days discussion will be just as informative a useful as the discussion at the first hearing. Thank you, i yield back the balance of my time. I thank the gentleman. The chair recognizes the chairman from virginia, mr. G d goodlat goodlatte. Thank you for the impressive array of hearings we have held on copyright issues. I can see we have another full house so good morning to you all. Welcome to the Second Committee licensing hearing. I see the size of the witness panel, two weeks ago and number of licensing system that exists in reviewing the in testimony written in advance of this hearing they does seem to be agreement that a more robust copyright ownership database is needed. There also seems to be an interest by many in simplifying the divers licensing and ratemaking systems but disagreement remains on whether all those who use music should pay for it and what specific rate standards should be used among other regions. I mentioned two weeks ago as we consider challenges and potential solutions to the copyright laws related to music we should keep in mind ideas that incorporate more freemarket principles. We should be mindful of the tremendous role Digital MusicDelivery Services play in the music ecosystem for consumers and creators of like a. I have long said the content community and the Technology Community needs each other. It is my hope we can identify improvements to our copyright laws that benefit both groups as well as consumers by maintaining strong protections for copyright works and strong incentives for further innovation. Thank you and appreciate you all making time to be here this morning and i yield back, mr. Chairman. The distinguished gentleman from michigan, the Ranking Members recognized for an Opening Statement. Thank you, good morning to our distinguished panel. I see faces i worked with before. We welcome all the supporters of the subject matter that i hear in the judiciary hearing room this morning. Since i agree with everything that has been said by my predecessors, the gentleman from new york and the chairman himself, i will put my statement in the record. It would be largely repetitive. Many of you know where i stand. I have supported music as an important and vital source in our national interest. It is in that spirit that i welcome you all to the Judiciary Committee this morning. I ask unanimous consent to put my statement in the record and yield back the balance of my time. I think the gentleman and the statement will be made a part of the record. Without objection. Let me introduce our panel of witnesses as we proceed with the business at hand. The first witness is roseanne cash, singer, songwriter, author and performer. She has relieved 15 albums and a grammy award, nominations for 12 putting the 11 signals, she completed a residency at the library of congress in december of 2013 and was given a Lifetime Achievement award in 2012. She has testified on behalf of the American Music association and as i mentioned earlier, also appeared before the subcommittee and we enjoy having him here as well. Good to have you here. Our second witness cant leave because of the impediment, i told you heartless for that. Chairman and chief executive officer of the Recording Industry of america and positioned, mr. Chairman, represents the interests of 7 billion u. S. Recording industry, received his bs from Cornell University and j. D. Degree from Harvard School of law. Our third witness, charles warfield, a 31 year veteran of the broadcasting industry and is here today on behalf of the National Association of broadcasters. He received his bs in accounting from hampton university. Good to have you with us, mr. Warfield. Our fourth witness is Darius Van Arman from family of america, independent reporting, in bloomington, ill. He has testified today on behalf of the American Association of independent music, a21m. He attended the university of virginia. Our fifth witness is mr. Ed christian, chairman of the Radio Music License Committee, rmlc. He teaches broadcast programming and radio operations at Central University of michigan. Central michigan university. You received his b. A. In excommunications and in management in Central Michigan university. Our sixth witness, Paul Williams, president and chairman of the board of the American Society of composers, authors and publishers, represent hundreds of thousands of music creators world wide. Mr. Williams is a golden club winning hall of fame composer and songwriter. Mr. Williams, you will be glad to know your friend mr. Gilmore from texas admonish 3 to be easy on you today. Looking at that from his state, will be careful to adhere to that request. Mr chris harrison, Vice President of business and assistant general counsel is also an adjunct professor teaching music lot at the university of texas school of law. And the university of North Carolina, i am pleased to say in Political Science from the university of North Carolina chapel hill. Good to have you in the room today. And mike huppe, in his position he is establishing longterm Strategic Plan and vision for the organization. He received his b. A. From the university of virginia and to j. D. From the Harvard School of law. I would like to follow mr. David prayer, chief executive officer of siriusxm, responsible for overseeing finance, itn Satellite Development operations, he received his m. B. A. From the university of michigan at ann arbor. Before we begin to hear from the witnesses i would like each of you to stand if you will land we will swear you in. To you testify the testimony you say is will be the truth, nothing but the truth so help you god . Let the record show all responded in the affirmative. We start with roseanne cash. If you can, comply with a 5 minute rule. When the topic light on your table goes from green to ambers that is your warnings that you have five minutes to go to reach the five minute pinnacle. You will not be severely punished if you dont comply but if you can stay with that, we try to comply with a 5 minute rule as well. The good news is i dont think there is going to be a vote until after noon so we wont be interrupted by 4 votes. Roseanne cash is recognized for five minutes. Thank you. Ranking members conyers and n v navv navver. Thank you for the opportunity to testify on behalf of the americanday music association. I want to address a few obstacles to making a living as a songwriter and recording artists today. Everything i say is guided by one principle. All creative people are entitled to fair market compensation when their work is used by others regardless of the platform. I have been both a professional musician and songwriter for 35 years. I grew up in the Music Industry in the age of major record levels and for tens more records stores. I have been signed to major labels since 1978 and currently on the esteemed blue note label. The climate among musicians at the moment is dispirited. We feel marginalized and devalued although our passion for our work remains unchanged. Every artist i know says regarding their work that they have no choice. We dont create out of lindsay, narcissism lack of ambition for more financially dependable professions. We are fuelled by an artistic sensibility that can be ruthless in its demand for discipline and in some ways we are in a service industry. We are here to help people feel to inspire, to reveal the secrets of the heart, to entertain and provide sustenance for the sole. Creating music is a collaborative effort and the creation of recorded music, co writers, producers, fellow musicians, recording engineers, background singers and various support people come together with the single purpose, to create one work. Among the problems facing us are one, the lack of a Public Performance right for terrestrial radio playbook for recording artists. The United States is one of a few countries including china, north korea and iran that lack a radio performance right for artists. The failure to recognize this right means that performers cannot collect royalties for their work even when it is broadcast in countries where the right exists, because the treaties the u. S. Has signed are reciprocal. Two, issues concerning how rates are set for licenses that songwriters offer for their work. Currently, the law prevents courts from considering all the evidence that might be useful in setting the fairest rates for licenses performing rights organizations offer, and royalty rates are not set on a fair market basis. This makes no sense. The songwriter equity act, introduced by congressmen collins and jeffreys, would address these issues, and i thank them for that. Three, the lack of federal copyright protection for pre72 sound recordings. There is a gap in copyright protection for sound recordings created before 1972 which Digital Services use as an excuse to refuse to pay legacy artists. I thank Ranking Member conyers and congressman holding for introducing the respect act to treat the work of legacy musicians fairly. For example, if my father were alive today, he would receive no payment for digital performances of his song i walk the line, written and recorded in 1956. But anyone who rerecorded that song today would receive a royalty. The injustice defies description. These are a few of the many challenges we face as performers and songwriters, and i understand Ranking Member nadler is considering legislation to comprehensively address these and additional concerns. Thank you, congressman nadler. Bottom line, copyright law should not discriminate among individual music creators. Each should be fairly compensated for their role in the creation and delivery of music to audiences. I see Young Musicians give up their dreams every single day because they cannot make a living doing the thing they most love, the thing they just might be on the planet to do. They deserve our encouragement t and respect. Musicians and artists of all kinds should be valued members of American Society, compensated fairly for honest, hard work. I believe we can find solutions so that artists and musicians can succeed together with both new and existing Music Services. And i thank you for this time. I thank you, ms. Cash. Mr. Sherman, lets start with you. Youre recognized for your statement. Chairman goodlatte and cobell and Ranking Members conyers and adler, my name is kerri sherman, im representing such iconic labels as columbia, motown, capital, atlantic to name a few. Our members have worked hard over the past two decades to build a viable, diverse and consumerfriendly Digital Music marketplace. Millions of music lovers can find whatever they want, whenever and wherever they want it. Digital models already account for more than twothirds of our revenue, and that number is growing. But before the music marketplace can realize its full potential, there remain serious, systemic issues to address. Records are the economic engine that drives the entire Music Industry. Its the recording invested in, marketed and promoted by record labels that produces real revenue for the songwriter, for the artist, for broadcasters, for Digital Music services. Record labels invest not just their financial capital, but their human capital, years of experience and expertise from the likes of clive davis, moe austin who work with artists to bring out their very best, resulting in music that not only captivates fabs, but also fans, but also drives benefits for everyone in the music value chain. Yesterday we released a report on the investments in music made by major Record Companies. In embracing digital distribution, record labels have revolutionized the business and streamlined their operations, all while revenues have plummeted. Even in tough times, however, as a percentage of u. S. Net Sales Revenue over the last decade, major label payments for artist royalties have increased by 36 , the mechanical royalties for songwriting have increased by 44 . Impediments to licensing impact the ability of record labels to sustain the investment that benefits the entire music ecosystem. Todays antiquated, complex and timeconsuming licensing regime undermines that system. And thats why we believe music licensing must be fixed, be