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Second bill in US Congress seeks to address radio royalties issue

By | Published on Thursday 6 April 2017

US Congress

Another proposal has been unveiled in US Congress to tackle the anomaly in American copyright law that means AM/FM radio stations pay no royalties to artists and labels for the recordings that they air.

As previously reported, whereas in most countries broadcasters must pay royalties to the owners of both the song and the recording copyrights, in the US traditional radio firms only pay money to the former. This is because there is no general performing right associated with the sound recording copyright under US-wide federal law, though there is a digital performing right meaning online and satellite broadcasters do pay royalties.

The record industry has long been lobbying for this anomaly to be removed, so to bring US copyright law in line with that of most other countries. In recent years the key bit of proposed legislation in Washington that would do just that has been the Fair Play Fair Pay Act, which was reintroduced into Congress last month.

The American radio industry always opposes such proposals, usually arguing that when stations play a record it’s basically free promo, and therefore the artist and label should be happy with that. To that end, a new proposal has been put forward in Congress that says that – if radio stations are offering artists promotion rather than payment – said artists should have the right to decline the promo and ask that their records not be played.

That proposal comes from Congress members Darrell Issa and Ted Deutch and their legislation is called the PROMOTE Act, which has been somewhat tortuously bacronymed to the Performance Royalty Owners of Music Opportunity To Earn Act.

Says Issa: “The terrestrial stations playing these works without compensating the artists argue that airtime provides exposure and promotional value, while the artists argue the status quo allows radio stations to profit on artists’ performances without providing any due compensation. Our bill puts forward a workable solution that would allow those who would otherwise be paid a performance right to opt out of allowing broadcasters to play their music if they feel they’re not being appropriately compensated. This is a win-win that helps solve this decades long problem in a way that’s fair to both parties”.

It seems unlikely that the radio industry will see the PROMOTE Act as any more of a win-win than the Fair Play Fair Pay Act, though the legislation does call the broadcasters’ bluff. The proposals have been, unsurprisingly, welcomed by the US music community.

Speaking for lobbying group musicFIRST, Chris Israel said: “The US is the only developed country where music creators have no say when it comes to traditional AM/FM radio stations playing and profiting from their hard work, but without receiving a dime. Congressman Issa’s PROMOTE Act addresses this glaring inequity by empowering music creators to seek fair compensation when their works are played on terrestrial radio. The musicFIRST coalition thanks Congressman Issa for his vision and support”.