Music News

Published on April 12th, 2017 | by Amber Healy


Welcome Back, Fair Play Fair Pay Act!

Once again, the US Congress is considering the Fair Play, Fair Pay Act, a bill that sets out to fix the way musicians earn money from their work.

When you stream, download or purchase a song, the artist receives payment for it. Makes sense, right?

When you hear a song on the radio, the artist doesn’t receive any royalties.

Radio stations pay a licensing fee, a flat rate to cover all the music in their respective libraries, and therefore are not required to pay a portion of a cent (like streaming music services) or any other amount to the performer, rights holder, publisher, etc.

The Fair Play, Fair Pay Act wants to change that and require radio stations to chip in to the coffers as much as satellite radio, streaming services and other outlets do.

Keep in mind: In other countries – just about all of them, in fact – radio stations pay royalties for songs they broadcast. Supporters of the Fair Play, Fair Pay Act simply want the US to follow the practices of the rest of the world in support of their musicians and artists.

As Complete Music Update points out, “there is no general performing right associated with the sound recording copyright under US-wide federal law, though there is a digital performing right, meaning online and satellite broadcasters do pay royalties.” In the US, terrestrial radio pays royalties only to the song’s owner, but nothing to the person or company that owns a song’s recording copyrights.

The Fair Play, Fair Pay Act was introduced recently for at least the third time. A group, led by Reps. Jerrold Nadler (D-NY), Marsha Blackburn (R-TN), John Conyers (D-MI), Darrell Issa (R-CA), Ted Deutch (D-FL) and Tom Rooney (R-FL), brought the bill back to the floor for consideration.

“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,” the bipartisan group says. “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.”

The bill would put a limit on royalties paid by stations so as to not bankrupt broadcasters or price them out of business: If a station earns less than $1 million in annual revenue, they’d pay $500 per year; non-commercial stations would have a $100 fee to pay.

Issa and Deutch are taking it a step further: They’ve introduced a separate bill, the Performance Royalty Owners of Music Opportunity to Earn Act of 2017, or the PERFORM Act, which would make it the “exclusive right of an owner of copyright to prohibit the broadcast transmission of a copyrighted sound recording by a terrestrial radio station” unless that copyright owner is paid for such broadcast.

Issa says the bill “calls the bluff on both sides of the debate over performance rights. The terrestrial stations playing these works without compensating the artist argue that airtime provides exposure and promotional value, while the artists argue the status-quo allow radio stations to profit on artists’ performances without providing any due compensation…This is a win-win that helps solve this decades’ long problem in a way that’s fair to both parties.”

In the joint statement released by Issa’s office, Deutch adds: “It should be the artist’s choice whether to offer their music for free in exchange for promotional play, or to instead opt out of the unpaid use of their music. I am proud to join my colleague Rep. Issa in introducing the PROMOTE Act to give recording artists more control over their work.”

As Inside Radio reports, “broadcasters have successfully sidelined a series of efforts to adopt a performance royalty over the past decade by enlisting members of Congress to go on record opposing such a fee. That strategy is again being used this year with more lawmakers signing at a quicker pace than in the past,” with at least 165 members of the House of Representatives and 21 Senators already speaking out in opposition to a radio fee. To block the passage of the Fair Play, Fair Pay Act, a total of 216 votes would be needed in the House. The bill is also opposed by the National Association of Broadcasters, which applauds the members of both houses of Congress for their support and appreciation for radio’s “indispensable role” in introducing new artists to listeners via free radio broadcasts.


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One Response to Welcome Back, Fair Play Fair Pay Act!

  1. Matthew W. I Dunn says:

    Very interesting account! Thanks for it!

    There are some inaccuracies above, though, I think: For example, the licensing fee paid by radio stations includes both the work’s publisher and its songwriter. You seem to say above that it does not include the publisher.

    Also, a minor point point of clarification: It is not as if perfomring artists are not being compensated AT ALL. If the performing artist were the one to have actually composed the song (i. e., to be the songwriter), then presumably he or she would also be getting something via the radio station’s payment of the licensing fee. The “loophole” — if it be one — really affects, I think, those performers who do not generally create their own music; rather, they just perform someone else’s composition.

    ( . . . which raises an issue: Does someone who merely performs a work deserve to be placed on the same level in the case of royalties as someone who has created it and/or published it and/or performed it?)

    Furthermore, regarding the royalty structure involved in streaming, downloading, and satellite: I am not sure the comparison is apt.

    Unlike radio, all of the former have the capability of recording in detail: which songs were played, when, how many times, and so forth. Radio, however, is literally as ephemeral as trying to catch the breeze: It is in the air. Unless the broadcast has been recorded on something, it is gone. How, then, would you prove that a D. J. played a particular’s artist’s work, say, three times that day?

    Granted, this is a matter of enforcement. It does not absolve a radio station from failing to justly compensate an artist for his or work. My point: Radio is not the same as streaming off of the Internet; and, perhaps, therefore, the latter model does not fit.

    To say that “in other countries – just about all of them, in fact – radio stations pay royalties for songs they broadcast” is a little bit contentious, for two reasons:

    (1) I am a little bit dubious that you have actually checked the “broadcasting law” for each and every one of the 195 countries on our little planet. But, maybe, you have . . . and, I apologize for the rash assumption.

    (2) “Pay royalties” — hmm, that’s an ambiguous phrase. By already paying a licensing fee to the recording industry, one might argue that the radio stations are ALREADY paying a kind of “royalty” for use of the music which they play.

    I wonder, though, about the principle: Let us say a museum had an artist’s work in its collection. Would that artist be due a royalty each and every time the museum decided to display it?

    What about clubs with D. J.’s? Should the venue pay a royalty to everybody involved each and every time the D. J. were to sample someone else’s work? (My understanding is that these venues, just like radio stations, pay a flat fee to the industry (e. g., B. M. I. or A. S. C. A. P.).

    Why would the music industry not just add performing artists to the compensation structure offered by the already-existent licensing fee paid by radio stations? Just divvy up the existing licensing fee which radio stations have dutifully paid, so that performers are compensated! That way, everybody would be covered. Fairness and equity should start at home, should they not?

    But, this scenario presents two issues:

    (1) keep the licansing fee the same which, if now it were to include the performers, would mean less money for each party; or,

    (2) raise the fee, which would result inevitably in a sort of war with the radio industry.

    So, I guess, the music industry has decided to let Congress fight its battle by getting it to pass legislation which would force radio stations to pay more.

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