Broadcasters, Music Copyright Holders Debate Potential Royalty Structure
Congress should require radio stations pay artists for broadcasting their music, SoundExchange and music performance rights holders told the Senate Intellectual Property Subcommittee Wednesday. Such a drastic change would upend the free radio broadcast model, said NAB and National Religious Broadcasters.
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Artists in the U.K., Canada, Germany, France, Mexico and Japan are paid for radio’s use of performances, noted Recording Academy CEO Harvey Mason. There’s a “glaring and inexcusable exception,” he continued: “Radio is the only business in America that can use someone else’s intellectual property without permission or compensation.” Mason urged support for the Ask Musicians for Music Act from Sen. Marsha Blackburn, R-Tenn., and House Judiciary Committee Chairman Jerry Nadler, D-N.Y. It would require radio services pay fair market value for music.
“The imposition of a new performance royalty is simply economically untenable for local radio broadcasters,” said NAB Chief Operating Officer Curtis LeGeyt. Congress focused major copyright revisions on new technologies not ones that have existed for nearly a century, allowing entire industries to be built, he argued: “Any performance royalty unilaterally imposed on local radio stations is not justified as a matter of copyright policy and will further stress the economics of the current" radio model.
No changes should be made to the sound recording royalty structure for over-the-air radio transmissions, said National Religious Broadcasters Executive Director Scott Hunter: “It would inject damaging uncertainty into the delicate music licensing ecosystem.” He listed impacts such as the ability to grant access to sound recording databases, how consent decrees apply to the industry and the licensing of new technologies.
The Blackburn and Nadler bill “exempts truly small broadcasters, noncommercial radio stations and college radio stations,” said American Association of Independent Music CEO Richard Burgess. “It’s time for this unfair and exploitative practice to end, and for artists to be paid when radio plays their music, just as satellite radio, internet radio and streaming services do.”
For nearly a century, Congress has failed to “address the unusual gap in our copyright law that forces artists to allow a multibillion-dollar industry to profit from a business model that is based upon music creators’ work,” said SoundExchange Chief Legal Officer Colin Rushing. He noted his organization administers royalties paid by some 3,100 digital music services, collecting and distributing royalties to over 200,000 registered accounts.
The Copyright Office’s report on Digital Millennium Copyright Act Section 512 (see 2005210057) demonstrated Congress can help the music community, and one way is to include the bill in the next COVID-19 relief package, Mason said.
The subcommittee is examining potential updates to the DMCA, with a hearing on the act's notice and takedown system set for 2:30 p.m. Tuesday in G50 Dirksen. The notice and takedown process is a game of whack a mole, which doesn’t work for small individual creators who don’t have teams of people working for them to monitor the internet, said Copyright Alliance CEO Keith Kupferschmid. He hopes for a voluntary agreement with the tech industry but said legislative fixes or changes to business models might be necessary if not. It doesn’t necessarily mean a change to Section 512 is necessary, but the two sides should come to some kind of voluntary conclusion, he said.
The DMCA is working as intended, said Computer and Communications Industry Association President Matt Schruers. In an ideal world, it could be better, but it’s working to facilitate digital communications and digital commerce, he said. Schruers cited existing voluntary arrangements between digital services and rights holders, which is what Congress contemplated in the DMCA.