Naxos responds to criticism of Pandora deal

The copyright law governing music airplay is fiendishly complex, all the more so as services that stream music over the Internet multiply.

Different but overlapping laws, procedures, and organizations are involved with play on terrestrial radio stations (like Classical MPR), "interactive" digital services that allow you to choose what music you hear and when (like Spotify), and "non-interactive" streaming services that work more like traditional radio, with song choice and order not determined by the listener (like Pandora). For an overview of this system, see The Current's Music Rights 101 infographic.

Never anything less than contentious among music writers, performers, labels, and licensees, these laws and policies have been the subject of special attention in recent weeks as the U.S. Copyright Office has suggested updates to the relevant laws; Congressional hearings regarding the proposed changes are ongoing.

As was widely reported last month, the classical music label Naxos struck a multiyear agreement with the music streaming service Pandora; both parties touted the agreement as a positive development that would make the label's entire catalog available to Pandora's large user base.

Few details about the agreement were made public, though, raising questions about how the agreement might affect artists' compensation for Pandora streams. The agreement — whatever it is — replaces the statutory compensation rates that would normally be paid.

Ray Hair, president of the American Federation of Musicians, recently published a statement wondering whether the Naxos-Pandora deal is fair to artists.

"Under the law," notes Hair, "50 percent of performance royalties are paid to featured artists, session musicians and background singers. The other 50 percent of the performance royalties are paid to the owner of the sound recording (i.e., the owner of the 'master'), which can be a record label or an artist who owns their own masters."

Hair goes on to ask, "Have Pandora and Naxos decided to dump the statutory license to hide the ball and cheat hardworking artists and musicians out of royalties they've rightfully earned?"

Jeff Van Driel, CEO for Naxos of America, has issued the following statement in response.

"Since its foundation more than 25 years ago the mission of Naxos has been to make classical music accessible and affordable. More than any other record company, Naxos has invested in music education and in recording a wider range of repertoire than any other company, major or independent. At the same time, Naxos has promoted many new and young artists and performing arts groups. Its catalogue of American classical music is second to none, built at substantial cost over time.

"It is both absurd and offensive for AFM President Ray Hair to insinuate in his recent Billboard op-ed that Naxos was motivated by greed and profiteering in its recent deal with Pandora. Writing these comments without any attempt to contact Naxos is irresponsible and reckless, and does not serve musicians well.

"Naxos remains committed to its artists and is committed to ensuring that all amounts owed for plays on Pandora are reported and paid to them in a timely and concise manner. This deal was done for the benefit of musicians worldwide.

"The current US statutory licensing system for non-interactive digital transmissions does not serve artists, especially classical artists, well. While it allows Sound Exchange to withhold 50% on behalf of artists and musicians, it does not oblige Sound Exchange to actively search for and identify artists entitled to receive payments. Nor does it oblige Sound Exchange to provide the artists with meaningful reports.

"Featured artist payments are accompanied by meaningless reports frequently omitting composer names and work titles. Here is what a Senior Customer Service Agent told a Naxos artist who complained about the absence of work titles and composer names: 'We don't actually pay royalties for composing, so that is nothing that gets reported to us. Sound Exchange is not set up in the way you are explaining. The composer is just not something that [our licensees] are required to report. It's just not something that Sound Exchange has control over.'

"Actually, Sound Exchange does frequently not even report work titles. Artists frequently receive reports specifying simply 'Allegro,' without the name of the work to which the Allegro belongs or the name of the composer. There are literally tens of thousands of 'Allegros' in classical music. Mistakes are not corrected. The same artist keeps receiving statements specifying: 'Allegro from String' (possibly referring to the Allegro from the Spring Concerto of Vivaldi's Four Seasons) or 'Allegro from Sprint,' even though the mistake was pointed out to the Senior Customer Service Agent.

"By concluding direct license agreements with partners such as Pandora, Naxos not only builds a stronger relationship with important discovery and promotional services, but it also ensures that the amounts owed to both Naxos and its artists are reported and actually paid accurately. Naxos will be able to identify and pay the hundreds of artists who have not been receiving any payments at all from Sound Exchange.

"Rest assured, Naxos is committed to growing the classical-listening community through promotion, support, education and continued investment in recordings and platforms. This is, and always has been a passion project for Klaus Heymann, founder and chairman of Naxos. Naxos relies on and is intent on supporting the artist community every way it can."

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