US Congressional Panel Mulls Royalty Right For Songs On Radio

By Dugie Standeford for Intellectual Property Watch
Well-loved American performers, members of Congress and the US Register of Copyrights squared off Tuesday against the country’s powerful broadcast lobby in a bid to change US copyright law to reward artists for songs played on terrestrial radio stations.

The House Judiciary Subcommittee on Courts, the Internet and Intellectual Property is examining whether performers whose songs are played on AM/FM radio should be entitled to the same sort of statutory royalties already received not only by songwriters but by performing artists on satellite, cable and Internet radio in the US and many other countries.

The National Association of Broadcasters (NAB) opposes such a move, saying the fee would amount to a “tax,” and that performers already receive ample benefits from the free promotion their songs receive on the radio.

Proponents for change rely on three major arguments, noted subcommittee Ranking Member Howard Coble (a Republican from North Carolina). They say that the exception was never justified by copyright law, the US Copyright Act requires satellite, Internet and cable broadcasters to compensate performers, and the US is alone is denying royalties to artists and performers.

Broadcasters are “on notice” that Congress intends to revisit the issue, Coble said. Congress must create a recognition that performing artists have a right to payment and that broadcasters must justify any offset of that right, he said.

This area of federal policy has needed a change for a very long time, said witness Paul Hodes, a Democratic Congressman from New Hampshire who is also a musician and songwriter. “The song does not come alive without the performance” of its recording, he said. Small, independent businesses are looking for fairness and to increase their revenue streams, he said.

US Register of Copyrights Marybeth Peters noted that despite strong efforts since 1976 to include the performance right in the Copyright Act, it was not done, a fact she attributed to the “effectiveness of the broadcast lobby.” As new technologies emerged, Congress in 1995 established a right for performances transmitted by subscription and interactive services, and later broadened it to include non-subscription services. Now, she said, the right should encompass all transmissions, especially terrestrial broadcasts.

Lawmakers agreed with Peters that any performance right created should not adversely affect existing statutory royalty rights or international treaty commitments.

Representative Ric Keller (R-Florida) said radio stations appear to be “a bit underappreciated here.” Peters may not think there is a mutually beneficial relationship between broadcasters and performers, but his local radio station told him record companies beg every day to have their music played on-air, he said.

Broadcasters Say No Change
The existing model works well and should not be changed at all, said witness Charles Warfield, president and chief operating officer of ICBC Broadcasting Holding, Inc. in New York City, who spoke on behalf of the NAB. Eighty-five percent of listeners say FM radio is their primary vehicle for identifying songs they want to buy, he said. Any suggestion that radio play does not boost sales is “counter to common sense,” Warfield said. Local radio gives free advertising to artists and record labels, and no one is pirating music from AM/FM stations, he noted.

A performance tax will restrict broadcasters, who are funded by advertising revenue, Warfield said. Many will be forced to try to raise advertising rates, switch to less-music, more-talk formats, cut the many public services they offer, or go out of business, he said.

The panel took aim at Warfield. Coble asked why radio broadcasters should not pay the same performance royalty as broadcasters on other platforms. Radio reaches 232 million listeners a week, Warfield said, adding that the US system is the largest and most successful in the world, so why change it? Moreover, broadcasters do not view royalty payments to songwriters as tax because, unlike performers, creators do not benefit from free airtime, Warfield said.

Grammy award-winning artists Judy Collins and Sam Moore testified that they are being harmed by their inability to collect performance royalties. The multi-billion dollar radio industry was built on performers’ creativity, passion and soul “which is part of every song aired on the radio,” Collins said.

All Moore and others want, he said, is what recording artists around the world already have. He pointed to world-famous performers such as Bo Diddley who were forced to continue performing through serious illnesses and old age because they were not paid for all the times their hit songs were played on the air.

Peters was asked how to structure a performance royalty system that does not harm terrestrial stations. Almost all countries have such a system in place, she noted. The US already has statutory royalty licenses for songwriters and others which are based on what a willing buyer and willing seller would do under similar circumstances, Peters said. It would not be difficult to achieve the correct balance, she said.

Warfield, however, said he could not endorse any change from the current system.

Rep. Darrell Issa (R-California) wondered what terrestrial broadcasters will do when high definition radio allows listeners to record tracks off their programs. The technology is “a nano-second away,” he said, and songwriters will also lose out on royalties.

UK Rejects Copyright Term Extension

While US lawmakers eye royalty rights for sound performances, the United Kingdom government recently slammed the door on music industry efforts to secure longer copyright protection terms for sound recordings. In a response to a parliamentary recommendation that the UK lobby the European Commission for a copyright term of at least 70 years, the Department for Culture, Media and Sport said most artists would not benefit from the longer terms because their record contracts require them to reimburse music companies for royalties received, and because consumers will not be happy about paying royalties for longer periods of time.

Dugie Standeford may be reached at info@ip-watch.ch.