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Obama administration endorses performance royalties

The Commerce Department sent a "views" letter Thursday to the Senate Judiciary Committee that expressed the administration's "strong support" for the record labels' No. 1 priority: legislation (S 379 in the Senate, HR 848 in the House) that would require radio stations to pay royalties to recording artists. It's not a huge surprise, yet it's still a win for the Recording Industry Assn. of America and performers in their pitched battle with the National Assn. of Broadcasters. (Download the letter here)

At issue is whether sound recordings should carry the same performance rights as musical compositions. Today, sound recordings have performance rights online and on satellite radio, enabling labels and recording artists to collect royalties from webcasters and Sirius XM. But those rights do not extend to over-the-air broadcasts, so local radio stations pay royalties only to songwriters. Opponents of the legislation call it a tax that could crush many stations. They also contend that the promotion artists receive from stations that play their music is compensation enough.

In Thursday's letter, the Commerce Department's general counsel, Cameron F. Kerry, noted that the department had urged lawmakers several times since the 1970s to create a public-performance right for sound recordings. Such a right would be "a matter of fundamental fairness," Kerry wrote, and would bring the U.S. into compliance with the rest of the world. Because radio stations here don't pay performance royalties to foreign artists, foreign stations withhold royalties they would otherwise be paying U.S. artists. In addition, Kerry wrote, extending the performance right for sound recordings "would provide a level playing field for all broadcasters to compete in the current environment of rapid technological change, including the Internet, satellite and terrestrial broadcasters."

The NAB responded, as usual, by blasting the RIAA. Said Executive Vice President Dennis Wharton:

We're disappointed the Commerce Department would embrace legislation that would kill jobs in the U.S. and send hundreds of millions of dollars to foreign record labels that have historically exploited artists whose careers were nurtured by American radio stations. The good news is that 260 members of the House of Representatives and 27 U.S. Senators are standing with hometown radio stations and against the RIAA.

Last year the judiciary committees in the House and Senate approved HR 848 and S 379, respectively, but neither bill has advanced further. They both enjoy bipartisan backing, which is unusual for this Congress. But then, the opponents are bipartisan as well. Stay tuned.

-- Jon Healey

 

Comments () | Archives (10)

The comments to this entry are closed.

LiberalReason

As always, Americans want something for nothing. It doesn't work like that anymore! RIAA is not even the only player today - anyone can self-publish these days, and if it's good enough to listen, it's good enough to pay for.

That guys dumb

Your a flat out idiot. Smaller music groups and labels rely on radio to push there new bands and songs if a station now has to pay to play a band, say goodbye to local music and ever hearing anything new.

LiberalReason

Yeah, say goodbye to music you don't want to pay for. But, if you insist, you can sign a fee waiver and get your music played for free anyway.

ME

If the radio station's are going to have to pay to play music we can say good bye to alot of radio station's cause i sure dont want to hear talk radio and that is what alot of the radio station's will be forced to go to talk radio. Radio station's have not paid to play music before they should not be forced to pay now . I feel that to make this change would do alot more hurt in the music world cause if the radio station's are forced to go to talk radio instead of playing music how will we know if the artist's have new music out and if we like it before we purchase a cd. If a radio station is going to have to pay then why not make them just purchase a cd like we have too not pay everytime they play a song it would make alot more sense and alot cheaper so we can keep our radio stations the way they are.

Rob-O

First of all radio stations make a whole lot of money playing music that people want to hear. They make this money two ways, 1: by companies wanting to advertise on their station because they play a certain type of music, 2: by companies that are hired to pay the station to play a bands music. In order for a band's music to even be considered for airplay they must have thousands of dollars to pay the station first. a radio promotions company is hired by the band or label to get the band airplay, the more money that the promo company pays the station the more times they play a song. Now why can't the radio station pay a small fee every time they play a song. I play in a band, we are signed to an indie label and we can't afford to have our music played on commercial radio. Now if we were paid a small amount, say $10 a play, over time we would be able to afford to go on bigger tours, buy more merch, buy more ads and thus strengthening a part of the music industry. Radio is not going to turn into talk radio all over the country, it wouldn't be profitable.

bondservant

If a grocery chain and Frito Lay can't come to some sort of mutual agreement on placing potato chips in the store, would we expect government to get involved? No - Frito Lay would accept the grocery store's offer, or take their business elsewhere. This is the free market at work.

The debate between RIAA and radio is similar. The two have a business agreement, and if they are not able to work out a new arrangment, RIAA is free to "take their ball" and go home. But there's nowhere else for RIAA to go. Both industries need each other.

What RIAA is doing is asking government for preferential treatment, forcing one side to pay for something they do not want to pay for - and should not be forced to. There's no fraud, no laws being broken. Government has no business being involved.

Which won't stop them.

Mezonic Records

Do you guys know how much commercial radio makes? Why is it ok to pay songwriters but not the artist? Do you know how many artists out there that could really benefit from this? I am talking about artists that we all used to love. Some of these people are currently doing odd jobs just because they don't receive royalties from their work. The music business is crazy. They use people and spit them out. It's almost like saying, you get laid-off from work but you can't receive unemployment. Now just think, is that right? It's wrong and you all know that! If you think radio doesn't make money, i dare you to call up your local station tomorrow and ask how much is a radio ad spot? They might tell you $50 for one minute or more... People, please go and do some research before leaving comments.

Jon Healey

@Bondservant -- That would be a fine approach if radio stations didn't have a compulsory license to play every track ever recorded. To have a true negotiation, you'd have to do away with that grant. Otherwise, you're just compelling labels and recording artists to donate something to terrestrial stations that they sell to webcasters and satellite broadcasters.

bondservant

Mezonic Records - whether it's a good idea for the singer to get paid is to ignore the way a free market is supposed to work. Nobody is owed or guaranteed anything.

Your label has no guarantee of success - it should stand solely on the product you provide, and if people want to pay what you're asking. If they don't - bye bye Mezonic. The same is true with radio - if advertisers won't pay x-dollars for a spot, they either lower the price, lay people off, or go out of business.

What RIAA is attempting to do is the same as if radio asked the government to pass a law making clients pay them what they wanted. How absurd!

Congress should have thrown this out long ago, and told RIAA and radio to work out their own problems. Government should never make one business pay another business for something they don't want to pay for. This is a form of fascism - govt and select businesses working together, at the expense of other businesses. And unfortunately, it happens all the time.

RIAA can't get what they want according to the rules of a free-market. So they are asking for preferential treatment. And by doing this, they are pitting themselves against radio - and they both need each other to survive.

LiberalReason

Radio is not a free market. The available spectrum is limited and the government has been regulating it from the start. That radio stations make profits thanks to the music they play while the artists don't get paid is just wrong.


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