Latest effort to secure broadcasting royalty for US artists and labels launches in Congress

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By Chris Cooke | Posted on Friday, June 25, 2021

The US record industry and its supporters in Washington have launched their latest attempt to force the nation’s AM and FM radio stations to pay royalties to artists and record companies as well as songwriters and music publishers. The proposed American Music Fairness Act would seek to bring US copyright law into line with copyright rules in most other mature music markets.

US copyright law is unusual in that it does not provide copyright owners of sound recordings with full performance rights. This means that when music is broadcast on AM / FM frequencies or performed in public, no license is required from the part and no royalty is paid to the recording industry. Those who broadcast or play recorded music in public only need licenses covering separate song rights.

The recording industry has been trying to change this for decades, at least so that the country’s AM / FM radio stations pay royalties to artists and labels, as their counterparts in most other countries do. And to that end, there have been various proposals in Congress over the years, most recently the Ask Musicians For Music Act.

However, to date these attempts have been unsuccessful, with the radio industry being a powerful lobby in Washington. So much so that last year the National Association Of Broadcasters won the support of more than half of the members of the United States House of Representatives for something called the Local Radio Freedom Act, a bizarre law designed to, well, don’t change a thing.

It was essentially a preemptive strike by the radio industry to show that it had sufficient support in Congress to block any bills to introduce a performing right for recordings.

However, the record industry has its own supporters among US lawmakers on both sides of the political spectrum, including Democrat Ted Deutch and Republican Darrell Issa in the House of Representatives, who officially introduced the American Music Fairness yesterday. Act.

A statement from the two members of Congress said: “For decades, US terrestrial radio stations have not been required to pay performers when they play their music – making the United States one of the only developed countries in the world with these outdated laws. The American Music Fairness Act would fill this gap and force broadcasters to pay artists when they use their work ”.

Anxious to point out that the new royalty obligations introduced by the law would mainly affect the more commercial part of the radio sector, they added: “The legislation includes a specific exemption for small radio stations which earn less than 1.5 million. dollars a year, requiring them to pay only a nominal annual royalty to broadcast as much music from as many artists as they want, while the large corporate broadcasters would pay the full freight ”.

The proposals are supported, unsurprisingly, by musicFIRST, a lobby group that has campaigned on the issue for years and which recently appointed former congressman Joe Crowley as president.

He said yesterday that the new law proposed by Deutch and Issa “corrects an injustice that has existed for decades: Despite the hundreds of billions of dollars that media companies like iHeartRadio and Cumulus have been paid by advertisers, they have not. never shared a dime of that money. with artists. Across the country, thousands of artists and music makers are working to build careers supporting their families by playing the music they love – but the rules are against them ”.

There is a digital performance right under US copyright law, which means satellite and online radio services require licenses from the record industry, which are usually secured through the company. SoundExchange management. This obviously gives AM / FM radio stations a competitive advantage over satellite and online services, another issue the US Music Fairness Act would address, musicFIRST argued.

“The American Music Fairness Act also level the playing field,” he continued, “by ensuring that all competing music platforms are treated the same and ending the archaic and unfair subsidy by whereby AM / FM stations pay nothing for recorded music while their digital competitors pay royalties at fair market value. Music services should compete on the merits, not on the legal loopholes that distort the market and hurt the creators of music ”.

The aforementioned Crowley added: “The rules have been rigged in favor of a few massive multi-billion dollar media companies for far too long. I am grateful that my former colleagues are getting involved in this cause. The introduction of the American Music Fairness Act is a critical step in the fight for musical fairness, and I will do everything in my power to help ensure that it gets passed. It’s time to balance the scales and make sure hard-working artists across the country are paid fairly for everything they do to make the music we love ”.

Needless to say, the National Association Of Broadcasters has already criticized the proposals. Throughout the decades that the recording industry has tried to get a broadcast royalty in the United States, the NAB has used pretty much the same argument against such a thing.

Basically this radio broadcast is a free promotion for artists and labels – who always hire pluggers to get their music played on air – and so these artists and labels should be thankful for the exposure and shut up. paid.

“The NAB strongly opposes the American Music Fairness Act or any imposition of a royalty on the performance of local American radio stations,” said CEO of the business group, Gordon Smith yesterday. “For decades, broadcast radio has maintained a mutually beneficial relationship with the music industry, launching and sustaining the careers of countless artists, promoting album sales and streams, and helping foster an environment of solid musical creation that is the envy of the world “.

Smith then cited the good old local radio freedom law, which currently does not have as strong support in Congress as it did last year, since the arrival of scores of new Representatives and Senators in January. But he still has a lot of support.

“We thank the 138 representatives and eighteen senators who currently co-sponsor the Local Radio Freedom Act,” the NAB chief continued, “who recognizes the long-standing connection between radio and the radio industry. music as well as the tremendous service that local radio provides to local communities every day ”.

“Broadcasters remain open to working with record companies to achieve a comprehensive and reasonable solution to this problem which reflects the incredible value local radio provides to musicians, record labels and our millions of live listeners and online, “he concluded. “It is unfortunate that the recording industry refuses to have these discussions.”

The NAB’s ‘you get-free-promo-so-fuck-off’ argument has never been more compelling, especially when you factor in all the Golden Oldie and nostalgia resorts that were never likely to lead to so much. of record sales. While when radio broadcasting was the top marketing priority for most new release campaigns in the recording industry, the fact that labels constantly gossiped (and sometimes even bribed) stations to get their tracks playlisted. has undoubtedly tipped the scales in favor of broadcasters on this debate. .

But, of course, while radio broadcasting still has a role in music marketing – especially for certain genres and fanbases – it becomes much less important over the years as Instagram advertising, TikTok influencers, and the Spotify algorithm become. the key tools to launch artistic careers and generate paid flows. This means that the position of the NAB has weakened over the years. While this trend is sufficient to gain majority support for this particular copyright reform in Congress remains to be seen.

It could still be that US copyright law only catches up with the rest of the world when most radio-style listening is done online anyway, and the revenues of the AM / FM radio industry are. already in sharp decline. But we will see.



MORE ABOUT: American Music Fairness Act | musicFirst | National Association of Broadcasters | American congress



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