NEW
YORK (Priddis Music) - When karaoke first appeared in the U.S., some
believed it was nothing more than a passing fad. Twenty years later,
it's still going strong, but finds itself battling an unlikely foe. The
karaoke industry is under attack from the big music publishers and many
legitimate karaoke labels may not be able to survive the onslaught.
"Under
the guise of fighting piracy and copyright infringement, music
publishers are strong-arming unfair fees from licensed and
royalty-paying karaoke companies to the tune of millions of dollars,"
said Rick Priddis, president of Priddis Music, Inc. "I've been in the
karaoke business for more than 20 years, and all of a sudden I am
looking at the prospect of losing my company because of the publishers'
overly aggressive practices � and I'm not alone."
Unlike
Napster, companies such as Priddis
Music have been paying royalties
under existing copyright laws. Although the music publishers have
accepted those payments for years, Priddis
Music and other karaoke
companies are now finding themselves under the Napster-esque label of
"willful infringers."
When Priddis started his business, he used
cassettes with the song lyrics printed on paper. Mechanical or
compulsory licenses were acquired for the recordings and reprint
licenses for the lyrics. Priddis
Music based its entire business tenure
on the terms of the Compulsory License Act and similar mechanical
licensing through the publishers' agent, the Harry Fox Agency. When
technology changed from cassette to CD, Priddis and other karaoke
producers changed the lyrics from paper to a TV screen, with no
background images or movies, to display the lyrics.
"The
copyright law provides for compulsory licensing of sound recordings,"
said Priddis. "The publishers don't seem to like the Compulsory License
Act because it limits their control and regulates what they can charge.
With new technology for distributing music, the publishers have found a
loophole in the outdated compulsory statutes and are using it like a
sword. They are evading the 'pay-as-you-go' terms of compulsory
licensing and are demanding synchronization fees because they claim the
lyrics on the TV screen are "synched up" with the music. Now we are
being told that we have to re-license all of our songs under
synchronization licenses � with one-time up-front fees of up to $1,000
a song � or face litigation. In our business, we have to keep as many
songs as possible in our catalogues, whether or not they sell well.
With the prospect of re-licensing thousands of songs at a cost of
millions of dollars, I don't know too many legitimate karaoke companies
who can pay that kind of money and keep their doors open."
Priddis
pointed out that the publishers are not above using force. He had been
doing business with Hal Leonard Publishing, Warner Brothers
Publications and the Harry Fox Agency since Priddis
Music began. Under
intense pressure from the publishers forcing the synchronization
license issue, these companies simultaneously shut Priddis
Music off
from further reprint and mechanical licensing.
He noted that
karaoke licensing is very different in the United Kingdom, where MCPS
(the UK Harry Fox equivalent) is karaoke-friendly, not only offering
fairly-priced mechanical licenses that include on-screen lyrics, but
discounted pricing in order to encourage the karaoke market there.
While U.S. publishers have agreed to the UK terms for UK karaoke
companies, they are preventing hard-pressed U.S. karaoke companies from
taking advantage of that program. U.S. agents require import licenses
in order to stop anyone that has not paid their exorbitant fees.
"When
I started my business," Priddis said, "I thought the Compulsory License
Act was there to protect companies like mine that wanted to
legitimately compete in the music marketplace, without coercion from
publishers who try to squeeze out the 'little guys.' Now I've learned
that the publishers will stop at nothing to make an extra buck.
Remember, these are the people who went after the Girl Scouts some
years ago for "singing around the campfire" and gave the world
unhappybirthday.com, where you are asked to turn in people who sing
Happy Birthday without paying fees.
"The great irony in all of
this is that the publishers, while claiming their actions are trying to
root out pirates and willful infringers, are making sure that only the
pirates will survive," Priddis said. "The true infringers have never
paid fees and never will. If this continues, those of us who have paid
fees and royalties all along will be forced out of business, and then
everybody loses."
