a performance right for the U.S.


There was a fairly recent congressional hearing about a new bill (HR 4789/S 2500, the Performance Rights Act) that will entitle the performers of music to royalties when their songs are played on the internet.

I didn’t know this, and it took a long time to figure it out, because our royalty structure in the U.S. is very complex, but apparently, when a song is played on the radio, royalties accrue to the songwriter/composer, but not to the performer. For example, when a Britney Spears song is played on the radio, no money is paid to her (sorry everyone, Britney does not write her own songs, as nuanced as they are). But what’s really bizarre is that only terrestrial broadcasters don’t have to pay. XM, Sirius, and even streamed radio does have to pay these royalties.

Here’s a concise summary of how things work:

Consider this. When you hear John Coltrane’s recording of ‘My Favorite Things’ on the radio in the US, the estates of Richard Rodgers and Oscar Hammerstein — the composers of ‘My Favorite Things’ — are compensated through ASCAP. But the estate of John Coltrane receives nothing for this performance.

However, if you hear the same performance on XM or Sirius, or via a webcast, or on a cable music station — even on that terrestrial radio station’s webcast — both Rodgers and Hammerstein’s estates AND John Coltrane’s estate are compensated.

Why the difference? US terrestrial broadcasters are exempt from paying a public performance right for sound recordings.

Now of course, radio broadcasters oppose this bill because they will have to pay more, and those who represent artists argue loftily that they should be “paid for their labor.” Sheila E. a grammy award winning artist, testifies:

All right, so let’s talk about radio. Artists love their records to be played on the radio. That’s a given. But that’s not the point. Artists love to get bookings for live gigs, but we get paid for those live gigs. Artists love to get songs placed in movies and TV shows and we get paid for those uses. Artists love to sell records and we get paid for those sales.

Radio is the only part of the music business where our work is used without permission or compensation. So when the National Association of Broadcasters tells us that they are a true friend of artists, we respond by saying friends don’t let friends work without compensation.

Which is pretty convincing for me, but then there are these arguments about this bill being necessary for competition, because radio is getting a free pass on these royalties, whereas other media must pay them:

First, I want to thank you, Chairman Leahy and Senator Feinstein, for championing royalty parity and fair competition, both of which will foster innovation and provide greater benefits to music fans and recording artists alike. Parity would mean that royalties for cable, satellite, Internet and even broadcast radio would be established for the first time by using a single uniform standard. Parity would establish royalties that do not discriminate against or favor competing technologies or business models. Parity would also have Congress provide small webcasters similar discounted royalty caps that the Performance Rights Act provides small broadcasters.

But it seems like we subsidize things all the time on the backs of other people. For example, many farmers can continue to farm because of my taxes (yes, I do pay taxes now). So yes, we are subsidizing terrestrial radio on the backs of performers, but it’s not like radio is unfairly taking over our music media markets because of this exemption. In fact, radio is in dire straits, and so obviously, the issue isn’t really competitivenss. Other media is plenty competitive enough even with paying these royalties.

Also, there is one nuanced argument on the side of radio, which is that they help promote the careers of artists. Notice how this might be able to explain why songwriters make money with radio plays but performers do not. I have no idea who any songwriters are; I only know artists. So, when a radio plays a song, they are not building a songwriter’s career in the sense that fans will clamor for more songs written by Rodgers and Hammerstein. I don’t hear a song and say “man that songwriter is good, I better find out what other songs they have written.” So, radio does not really promote their careers in that sense, thus, they pay them.

However, radios do build the fame of the performers. People here a new band on the radio, and they hear the band name. This is exactly radio’s argument, and their point is that they provide free advertising that can launch careers.

In the end, I think I’m probably for performer’s rights, but it doesn’t seem like a terrible injustice that radio is exempt.


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