Watt Previews Terrestrial Performance Royalty Bill at IP Subcommittee Hearing

CCI is “thinking through many elements” of the Copyright Alert System and “considering whether and when to expand the scope of the system in the future,” said CCI Executive Director Jill Lesser. She responded in an email to us Thursday night about the suggestion that CAS be broader in scope made during testimony earlier in the day at a hearing of the House Intellectual Property Subcommittee.

"The Copyright Alert System was launched only five months ago in late February,” and CCI is “still in the initial stages of assessment,” Lesser said. “It is our hope that the system’s impact over time will be to generally discourage peer-to-peer infringement of copyright-protected content.” Copyright Alliance Executive Director Sandra Aistars expressed disappointment with CAS and recent White House-backed best practices on ad networks that support websites profiting from piracy, at the hearing. CAS only applies to video and musical works, she said. “I would love to see it expanded to address other types of creative works,” including photographs and books, she said. “There is still work to be done.” Aistars suggested that lawmakers “invite stakeholders who have begun to take these measures in to share with you how these are working” and whether they are “having the effect that was intended."

Public Knowledge doesn’t think “fair use creep” is a problem, Sherwin Siy, vice president-legal affairs, told us. That’s whether the term refers to public misconceptions about fair use or cases where “courts have found fair use cases in places rightsholders didn’t expect,” said Siy, who didn’t testify. Congress would be creating “enormous uncertainty” by changing fair use, he said. “I'd like to see a little more about what they consider to be ‘fair use creep.'” Fair use creep “is a major concern for copyright holders, testified John Lapham, Getty Images senior vice president. Eugene Mopsik, executive director of the American Society of Media Photographers, also said he was concerned about “the expansion of fair use.”

Watt said he'll introduce “a bill that simply recognizes a performance right in sound recordings.” The hearing included testimony from rightsholders and their representatives, encouraging Judiciary Committee and IP Subcommittee members to protect content creators through a strong copyright regime. Broadcaster groups opposed the bill Watt said he would introduce, while backers of a performance royalty supported it. A bill that establishes performance royalties for sound recordings over the radio is “just a fair thing to do,” Watt said. Holding up his iPod, Watt said, “I love this iPod, but it’s just a piece of metal unless it has some content on it.” Devices and services that allow users to listen to music depend on the creative content, he said. “We need to get on with recognizing the performance right, and I think it will have some real impact for American musical artists.” Legislation would also aid discussions regarding royalties among market participants, Watt said. “This will incentivize the parties to negotiate in good faith."

Artists should be compensated when their musical works get played, Tor Hansen, co-owner of Yep Roc Records and a member of the American Association of Independent Music’s board, said during the hearing. “We still don’t have a performance right that would ensure music creators get paid when their sound recordings are broadcast on over-the-air radio, the only major country in the world without this right,” he said in written testimony. “Our royalties [that] sit overseas remain captive to the fact that, unlike other industrialized nations, we don’t compensate performers for terrestrial airplay so without this legal reciprocity right those royalties are not available to U.S. based independent creators,” he said. “The exemption enjoyed by U.S. broadcasters leaves untold millions of dollars on the table from overseas plays that represent a diverse array of American musical expression,” said Future of Music Coalition Interim Executive Director Casey Rae, who didn’t testify, to us by email. “Representative Watt’s bill will hopefully inspire other members to do the right thing for our cultural ambassadors and close this loophole once and for all.”

Artists derive “great value” from their music being played on terrestrial and Internet radio, said Rep. Jason Chaffetz, R-Utah. He wrote the Internet Radio Fairness Act, which would instruct the Copyright Royalty Board to lower performance royalty rates for Internet radio services (CD Sept 24 p1). “It would be fair to say, there’s a value for being on the radio?” he asked Hansen. Hansen agreed, saying musicians find new fans and promote their content “across the board,” including through services like YouTube.

The RIAA supports Watt’s efforts, said a spokesman for the association via email. Watt has “rightly articulated that all those involved in creating the music fans love deserve to be paid fair market value for their work, regardless of the platform on which their work is used,” the spokesman said. Ted Kalo, executive director of artists’ advocacy group musicFIRST, also applauded Watt for his efforts “to end the decades long injustice that denies performers’ compensation when their work is played on AM/FM radio.”

NAB “strongly opposes a new performance tax that would kill jobs at America’s hometown radio stations while diverting millions of dollars to offshore record labels,” said a spokesman in a statement. “We continue to support private, company-by-company negotiations that are driven by the free market, as is reflected by recent deals between broadcast radio stations and independent music labels.” National Religious Broadcasters CEO Frank Wright said he would “suggest to Rep. Watt that such legislation is fundamentally flawed as it rests on the faulty premise that all the value in radio airplay of music flows to broadcasters -- an assumption refuted by reason and experience.”