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US record industry puts spotlight back on AM/FM royalties debate

By | Published on Thursday 10 October 2019

Car radio

Today is the one year anniversary of America’s Music Modernization Act being signed into law. With that in mind the boss of US collecting society SoundExchange has teamed up with Common to pen an op-ed piece arguing that music copyright laws in the country are actually yet to be truly modernised. Why? Because the big AM/FM radio get out remains.

The MMA brought together a number of different reforms of US music copyright law. It included an overhaul of the way the mechanical rights in songs are licensed and managed, removed a quirk that meant recordings released before 1972 often weren’t getting royalties from online radio, and revamped the rate courts that oversee the licences issue by song right collecting societies BMI and ASCAP.

However, what it didn’t address is the fact that, in the US, unlike most other countries, AM/FM radio stations are not obliged to get a licence from or pay royalties to the record industry. This is because, under American copyright law, the sound recording copyright has fewer ‘controls’ attached to it than the song copyright. So while online stations must pay royalties to artists and labels, as well as songwriters and publishers, terrestrial radio stations do not.

The record industry has been trying to get this changed for decades, in more recent years via proposed legislation called the Fair Play Fair Pay Act. However, the radio industry is a powerful lobby in Washington. So much so, the music industry sensibly decided to keep this albeit important reform out of the MMA, because had it been in there, the whole act would likely have failed, preventing the other reforms from taking place.

That doesn’t mean artists and labels have given up on the campaign to get AM/FM radio royalties though. Which is why SoundExchange boss Michael Huppe has teamed up with the artist Common to write a piece for Variety setting out, once again, the arguments for forcing traditional radio stations to pay.

They write: “The biggest and most profitable music platform in America – FM radio – with 200+ million listeners and $17 billion in annual revenue, pays nothing to the people who record the music that is the lifeblood of their business. Never have. Not a penny”.

Noting that in the past members of US Congress have suggested that the record industry try to reach a deal with the radio sector, the op-ed goes on: “You can imagine how long a negotiation lasts when radio broadcasters can walk away from the table and continue to pay nothing for their staple input. With no actual property right granted to creators, they have very little leverage to bargain over”.

“We can right this wrong with the simple act of giving music creators a property right in their own work”, they add. “No one can call our copyright laws ‘modernized’ until FM radio is held to the same standard as the music services it competes with on the dashboard and in American homes – the ones who pay artists. This is the longest standing inequity in our copyright laws, and it’s time to get real about solving it”.

The article notes the radio industry’s usual comeback when presented with this debate, ie that radio airplay is promo for labels and artists and they should be happy with that. “Maybe this was the quid pro quo of years gone by”, they write. “But when was the last time you heard a song on AM/FM radio and went to a record store to buy the album?”

“In today’s digital economy, 75% of US recording revenue derives from streaming. The law, the marketplace and simple morality demand that digital platforms must share some of that value with creators. Why should radio be any different? It is, after all, the music that draws their audience”.

In a rallying call, the article concludes: “Now is the time to take action. We must come together and call upon Congress to right these wrongs. That’s how we’ll protect this generation of artists, and the next”.

You can read the full article here.