D.C. Awash in Entertainment Cash

Capitol Hill is a place for people with deep pockets, and few have more money to spend than the moguls of the recording and motion picture industries. While this hasn’t excluded startups and individual artists, it has made getting involved that much tougher.

Capitol Hill is a place for people with deep pockets, and few have more money to spend than the moguls of the recording and motion picture industries. While this hasn’t excluded startups and individual artists, it has made getting involved that much tougher.

The entertainment industry is pumping millions of dollars into the war chests of both major political parties, vastly outspending both technology startups and individual artists. That could make it difficult for those “little guys” to get their messages across to legislators.

According to figures from the Center for Responsive Politics, the Democrats have collected $5.8 million from the television, movie, and music industries, ranking it fourth on the campaign donation list. That figure outpaces the Republicans by $2.1 million, which ranks the entertainment industry eleventh.

That leaves companies like Napster out in the cold when it comes to opening doors in Washington, D.C., where a checkbook accompanies a handshake.

Napster, with its $15 million in funding from Hummer Winblad, needs to direct nearly all of its assets towards sustaining its business and fighting its legal battles with the recording industry. Compare those resources to the $40 billion goliath Napster faces both in court and in the political arena.

“The recording industry and the entertainment industry have tremendous clout on Capitol Hill through their contributions, and an extensive network of lobbyists,” said Napster CEO Hank Barry. “That would be impossible for (startups with no revenue streams) like Napster to match. I’m not sure that — even if we had the inclination and the resources to do it — in the short time between now and the election, we could organize the Napster community to impact the outcome of races.”

Napster may not have the money to compete for legislators’ attention, but it has other resources.

After last month’s Senate hearings, Barry posted a note on the Napster site listing the email addresses of Sen. Orrin Hatch (R-Utah) and Sen. Patrick Leahy (D-Vermont). Hatch is the chairman of Senate Judiciary Committee, and Leahy is the committee’s ranking Democrat. Both Senators received more than 80,000 emails from Napster faithful, more than either received during the entire impeachment hearings.

“The fact is that Napster has over 25 million users now spanning a broad-age demographic,” said Barry, noting that over half are women. “And I don’t think politicians will be naturally inclined to alienate them.”

Entertainment industry foes believe that money alone won’t influence the legislative process.

“I don’t think that, ultimately, senators can be bought for a million dollars,” said Jonathan Potter, the executive director of the Digital Media Association, which currently opposes the recording industry over webcasting issues.

“Will they listen to you? Sure. But I don’t think that ultimately benefits you legislatively. I am very comfortable lobbying in this arena with the entertainment and technology industries. But at the same time, DiMA is putting together a PAC right now because that is part of the system.”

In the communications industry, entertainment political action committees rank second behind phone utilities PACs for doling out money, giving more than $2.1 million. Contributions are split nearly equally between Democrats and Republicans. Far and away the biggest contributors are the National Cable Television Association and the National Association of Broadcasters.

Behind those powerhouses comes a line of music and movie companies.

Time Warner leads the second tier, contributing more than $250,000. Walt Disney gave $170,000, and music licensing company ASCAP rounded out the top five entertainment PACs, with $136,000.

Universal and its parent company, Joseph Seagram’s and Sons, gave $191,000 collectively. They are followed by the Motion Picture Association of America, Sony Pictures, and the Recording Industry Association of America.

But giving money to parties is only a small part of business on Capitol Hill. With so many important issues coming up this year, the entertainment industry must continue to lobby to make sure its concerns are being dealt with as new legislation is drafted.

Nowhere was this more apparent than in last year’s 11th-hour wheeling and dealing by the recording industry over the issue of copyright legislation.

Copyright law allows creators the opportunity to reclaim their work 35 years after the original copyright is granted. Legislation in the 1976 Copyright Act does lay out certain exceptions, including the work-for-hire clause that lets employers retain the rights to work that they have contracted or paid for with salaries and benefits.

Sound recordings were not listed among the nine work-for-hire exceptions, which meant that musicians have always had the opportunity to retain their work.

Last year, the music labels successfully lobbied to get a clause inserted into unrelated legislation preventing copyrights from reverting to their authors.

By adding four words — “as a sound recording” — deep within the Satellite Home Viewer Improvement Act of 1999, Congress essentially changed the work-for-hire section of the copyright code.

The language adds sound recordings to the categories of artists’ work that is deemed work-for-hire, and therefore not subject to the stipulation that copyrights return to the artist after 35 years.

If the artists and technology did not already realize that they needed a lobbying presence in D.C., the RIAA’s hiring of Mitch Glazier was a wake-up call.

Glazier was the chief counsel to the Senate subcommittee which passed the legislation, just three months after the controversial clause was added.

Despite the public relations fiasco that followed the Glazier hiring, the entertainment industry has done an admirable job of maintaining a hold on its government relationships.

In the 1998 election cycle, communications and electronics industry lobbying was big business to the tune of $186 million. Of that, the entertainment industry, which dropped almost $30 million, ranked second on the list of spenders, behind only the telephone and computer services industry.

Four of the top 10 lobbying spending efforts came from the entertainment industry. Time Warner pumped in $3 million, while archrival Walt Disney ponied up $2.4 million. While those two titans continued their battle over content and distribution, the movie and recording industry trade organizations dropped $1.8 million collectively into lobbying Congress.

In that year, the entertainment industry campaigned to strengthen international copyright and anti-piracy laws. Congress also approved a related measure to grant a 20-year extension on all copyrighted works.

The current hot-button issues promise to have an even greater impact on the future.

Napster and DeCSS still loom over the movie and music industries. Issues surrounding the digital distribution of content in an America Online-Time Warner world are also of concern. The Digital Millennium Copyright Act is probably going to be revisited within a year.

“Somehow we were able to convince the recording industry to go back to square one, and that doesn’t happen very often,” said attorney Jay Cooper, the entertainment lawyer at Manatt, Phelps & Phillips who represented the Artists’ Coalition in the negotiations to remove the work-for-hire addition.

“Eventually, the recording industry came to terms with the fact that they are going to need the artists’ community to make a joint effort against Napster, so it might be better to have artists as their friends.”

Author: Brad King

News Service: Wired News

URL: http://www.wired.com/news/politics/0,1283,38407,00.html

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