Legislators Re-Introduce Bill to Make Radio Stations Pay For Music
(By Marc Schneider | Published on March 31, 2017 for Billboard.com)
The Fair Play, Fair Pay Act, originally introduced in 2015, is back on the table.
A bipartisan group of legislators led by Reps. Jerry Nadler (D-NY) and Marsha Blackburn (R-TN) have reintroduced the Fair Play Fair Pay Act, a bill that would establish a public performance right for sound recordings on terrestrial radio, forcing stations to pay labels and artists.
Joining Nadler and Blackburn in reviving the bill, originally introduced in 2015, were Reps. John Conyers, Jr. (D-MI), Darrell Issa (R-CA), Ted Deutch (D-FL) and Tom Rooney (R-FL).
If the bill passes, and is signed into law by President Trump, it would put AM/FM radio on equal footing with webcasters like Pandora and iHeartRadio, which pay statutory royalties for their online radio platforms (explained here). (Both companies have entered the on-demand streaming business as well.) Members of Congress say the bill will not be used to lower royalties that radio stations now pay to publishers and songwriters, which stations have always paid for the use of their songs.
The legislators also say the bill will "make a clear statement that pre-1972 recordings have value and those who are profiting from them must pay appropriate royalties for their use," a reference to the ongoing web of litigation involving recordings made when copyright was still a matter of state law. As previously reported, sound recordings made after 1972 are covered under federal copyright law.
The bill is being reintroduced at a time when Congress is starting to work on a range of copyright reforms.
"Our current music licensing laws are antiquated and unfair, which is why we need a system that ensures all radio services play by the same rules and all artists are fairly compensated," Representatives Nadler, Blackburn, Conyers, Issa, Deutch and Rooney said in a joint statement. "Our laws should reward innovation, spur economic diversity and uphold the constitutional rights of creators. That is what the Fair Play Fair Pay Act sets out to accomplish: fixing a system that for too long has disadvantaged music creators and pitted technologies against each other by allowing certain services to get away with paying little or nothing to artists."
One of Nadler's core arguments in favor of the bill is that it would help local and public broadcasters by capping rates. Co-sponsors note that stations with less than $1 million in revenue would pay $500 every year, while public/community radio stations would pay $100. Stations that use music for religious and incidental purposes would pay nothing.
A range of music organizations have already applauded the re-introduction of the bill. "Radio is the only business in America that can use another’s property without permission or compensation," Daryl Friedman, the Recording Academy's chief industry, government and member relations officer, said in a statement. "The bill protects small stations and only asks corporate radio to do what internet and satellite radio already do: compensate the creators who record the music that drives their business."
Industry coalition musicFirst, a music business advocacy group that includes the RIAA, SoundExchange and the American Association of Independent Music (A2IM), among many others, said the bill's passage would be an important step in fixing a flawed system. "This bipartisan legislation, together with recent developments that demonstrate strong support for the performance rights of artists, shows clear momentum for reaching a solution to copyright reform that establishes free market pay for all music creators and technology-neutral rules for music services," said executive director Chris Israel in a statement. "The musicFIRST coalition looks forward to engaging with Congress in support of this legislation and on other efforts to level the playing field for artists across music platforms."
The National Association of Broadcasters (NAB), the radio industry's leading trade group, vehemently opposed the original bill -- and its position hasn't changed. The bill "would impose a job-killing performance royalty on America's hometown radio stations," said president and CEO Gordon Smith in his own statement following the bill's re-introduction. "NAB remains committed to working with Congress on balanced music licensing proposals that help grow the entire music ecosystem, promote innovation, and recognize the benefit of our free locally-focused platform to both artists and listeners."
The NAB instead supports a separate piece of legislation, the Local Radio Freedom Act, which opposes "any new performance fee, tax, royalty, or other charge" on local broadcast radio stations. That bill currently has 165 cosponsors in the House and 21 in the Senate.
Artist-led group the Content Creators Coalition (c3) aired its support, saying in a statement from president Melvin Gibbs and executive director Jeffrey Boxer that "for decades, artists have been forced to let their music generate billions of dollars of advertising profit to the corporate investors of radio companies while not being paid one cent for their art. It is past time for Congress to right this wrong."
In a statement, SoundExchange president and CEO Michael Huppe said the bill aligns with the royalty administrator's "guiding principle: all creators should receive fair pay, on all platforms and technologies, whenever their music is used. Too often, U.S law forces American artists and rights holders to work for free or accept below market rates for the use of their work. No other group of American workers is forced by Congress to give their work away for free. The Fair Play Fair Pay Act corrects these injustices."
A2IM CEO Richard James Burgess said it was time to "right this egregious wrong" and pass the Fair Play Fair Pay Act. Most other countries pay this royalty but for nearly 100 years, the $17bn U.S. radio industry has refused to compensate artists, musicians, singers, and labels for the use of their work upon which radio's revenues are dependent. This is an unconscionable way to treat the creative community, and we hope that this bill corrects the problem."
UPDATE 3/31: This article has been updated with additional industry reactions to the bill's re-introduction.