Artists And Performance Royalties: Time For A Solution

Congress_2Followers of the Future of Music Coalition know that they have long supported a public performance right for AM/FM radio that would pay artists when their music is played on over-the-air. This right already exists for digital radio platforms like Pandora and SiriusXM. Yet massive companies like iHeart MediaCumulus and Entercom are exempt due to a loophole in US law.


Guest Post by Casey Rae on Future of Music Coalition

Followers of our work already know that FMC has long supported a public performance right for AM/FM radio that would pay artists when their music is played on over-the-air.

Such a right already exists for digital radio platforms likePandoraSiriusXM and all manner of webcasters. In fact, when a terrestrial radio station simulcasts its regular broadcasts over the Internet, it pays a royalty to performers and sound copyright owners (usually the label, but sometimes the artist). Yet massive companies like iHeartMediaCumulus Media and Entercom are exempt due to a loophole in US law.

It’s time to close that loophole once and for all. That’s why FMC and other pro-artist organizations support the recently introduced Fair Play Fair Pay Act. Among other things, this bill would finally address the glaring disparity in royalty obligations between radio and radio-like services.

Another reason we have supported a performance right for AM/FM radio is that practically every other developed nation in the world pays performers. (Besides the US, other notable exceptions are Iran and North Korea). The lack of a “reciprocal right” means that not a single penny of royalties from American music broadcast internationally makes its way back to US artists. This doesn’t just affect superstars. Blues and jazz, for example, are beloved the world over. Yet the performers of this music can’t pay their medical bills on that appreciation. It’s time to remedy this.

The Fair Play Fair Pay Act would also establish a mechanism for older recordings—specifically those made before February 15, 1972—to generate royalties when “performed” on digital radio. It might seem crazy, but there is no federal copyright for so-called “pre-‘72s.” The reasons why are somewhat complicated, but the headline is this: when Congress enacted a copyright for sound recordings in 1972, they chose not to apply retroactive protections. SiriusXM, Pandora and other digital radio services do pay for post-’72 sound recordings; this money is collected and distributed by the nonprofit organization SoundExchange. The royalties are split fairly between artist and label (labels receive 50 percent; featured performers 45 percent; five percent goes to a union-managed fund for background singers and musicians). The recording artists’ portion is paid directly, meaning it isn’t held against an artist’s debt to their label.

We’d love to see Congress act on recommendations made by the US Copyright Office (and endorsed by FMC) to bring these older recordings under federal protection. Unfortunately, the major record labels oppose that for reasons we can’t quite fathom. (Though it may have to do with them actually accounting for the recordings they own.) There is currently active litigation in the courts to get SiriusXM and Pandora to pay on pre-‘72s, but we aren’t convinced that settlement money like that recently awarded in a label case against SiriusXM will make it back to artists. That’s why we prefer a policy solution whereby SoundExchange is able to collect and distribute royalties for pre-’72s and pay artists their share directly. Scorched earth litigation doesn’t serve artists. America’s cherished musicians must be paid properly and fairly. (Perhaps older artists should receive a greater percentage, because the big labels have had a long time to exploit these works and artist / major label contracts haven’t always been the most equitable.)

R30Lastly, the Fair Play Fair Pay Act makes it easier for recording artists to assign a portion of their performance royalties to producers and studio workers who have contributed to a recording’s excellence. This is something that the artist can choose to do—it’s not an automatic deduction. Since we’re producers and engineers ourselves, we think this is eminently endorsable.

Fundamentally, FMC supports a performance right because artists deserve to be paid when their music is used commercially. There are currently hot-button debates about “rate parity” between various music services, and those are important conversations. But we feel strongly that you can’t solve any of those issues without addressing the fundamental disparity that warps the market right out of the gate: a lack of a performance rights for AM/FM radio.

It’s time for a change. Let your representatives know that artists need to be paid for radio play.

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