Tag: radio

Senate Resolution asks Congress to Promise it will Keep Ignoring Musical Artists

musical artist

A little-known Senate resolution called the Local Radio Freedom Act (LRFA) is a clever move by whoever thought of it. It has no force of law but instead asks Congress to sign a pledge to enshrine an unfair and unfounded policy whereby terrestrial radio broadcasters shall never pay royalties to musical artists. Why? Because that’s how it’s always been.

In copyright law, music generally entails two separately protectable works—the underlying composition and the sound recording. Sound recordings are created by performing artists, and many compositions are naturally recorded by different artists at different times. Quintessential examples include Whitney Houston’s “I Will Always Love You,” and Jeff Buckley’s “Hallelujah,” originally written and performed by Dolly Parton and Leonard Cohen respectively. But if you ever turned up the radio when one of these cover songs came on, you might not know that although Parton and Cohen received royalties, Houston and Buckley did not.

This omission in the royalty scheme has come before Congress many times over many decades, and most Members know the status quo doesn’t make sense. Public performances of musical sound recordings pay artists royalties in every other commercial context, and in every democratic nation in the world, except for American terrestrial broadcast radio. But what is music radio without music?

The answer from the National Association of Broadcasters (NAB), and which is parroted in the LRFA, is that radio “promotes music,” and it does. But that’s only half the story. The other half is that music draws listeners to radio networks, which sell billions of dollars in advertising. Members of Congress know this is the only equitable consideration, yet to watch the last hearing on the issue, one might get the idea that the IP Subcommittee is still at the investigative stage of the decades’ old problem. If Congress seeks an equitable arrangement, it’s in the text of the American Music Fairness Act (AMFA), which was introduced in 2021.

For smaller stations (under $1.5 million/year), the AMFA caps royalties between $10/year to $500/year depending on revenue and status as either a public or private station. For larger stations and networks, rates would be set, as they for the rest of the performance licensing market, by the Copyright Royalty Board (CRB). Under the provisions of AMFA, the CRB must consider station size and revenue when setting rates and must also consider the station’s promotional value to recording artists. It’s hard to imagine how the deal gets more fair than that.

In addition to the half-true “promotion” argument, LRFA also echoes NAB talking points about the many free services radio stations provide to communities—from local news and emergency information to community outreach and charity. The implication is that these services would be curtailed or lost if they had to pay performer royalties, but this claim is neither supported nor well-reasoned. The stations’ good works continue while they pay talk show performers and news reporters—and no doubt, buy coffee and electricity, too.

Notably, when witness Eddie Harrell, Jr., representing the conglomerate Urban One, was asked at the hearing about the CRB, he did not seem to know what it is. This is not to mock Mr. Harrell, but instead to observe that if he was there to claim that his company cannot afford royalties but does not know about the rate-setting court, how does he know what he can’t afford? I think the answer is not that Mr. Harrell is careless or unable to do the homework, but that he anticipates not needing to present those numbers because the NAB has told him to expect that Congress will once again default to the tautological absurdity of “because that’s how it’s always been.”

Members of Congress know it is the large networks and conglomerates lobbying against AMFA and that they are not saying anything new in defense of the status quo. Because this issue has been on and off the table for about eighty years, any reference to further negotiation or study at this point is either a stall tactic or a pocket vote against AMFA. Meanwhile, signing onto LRFA is an explicit statement that, once again, the artists will be ignored right after their representatives tell them how much they are a treasured and respected part of the American tapestry.

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Has the Moment Finally Arrived for Fairness to Music Performers?

Unlike the rest of the developed world, American radio broadcasters are unique in that they pay nothing in performers’ royalties when they play music on their stations. Although this has been true since radio began in the U.S., many Americans are surprised to learn that this is the case and, according to polling, believe it’s unfair. That’s because it is unfair.

Songwriters receive royalties for terrestrial radio play but not recording artists and their labels, which also excludes producers, engineers, and studio musicians. Almost since the day the National Association of Broadcasters (NAB) was formed in 1922, the station owners have successfully lobbied against a public performance right in sound recordings via broadcast by arguing that the promotional value radio play provides to the recording industry overwhelms the rationale for paying to license the music.

“But that was never a legitimate excuse,” said Congressman Ted Deutch in front of the Capitol yesterday afternoon when he introduced the American Music Fairness Act, co-sponsored by Congressman Darrell Issa. “The broadcasters have become experts in muddying the waters,” Deutch continued as a group of musicians in the background, including Dionne Warwick, Sam Moore, Ken Casey of the Dropkick Murphys, and Blake Morgan, all nodded in recognition that this has been a decades-long fight for basic fairness. As Rep. Issa noted in response to one reporter’s question, Congress will not be negotiating the terms to establish equity with the major broadcasters—this will be done under the auspices of the Copyright Office—but he emphasized that the longstanding rule of “not one penny” is a bad faith arrangement that needs to be made right.

Six major media conglomerates own more than 2,000 terrestrial radio stations in the United States, and the revenues from radio advertising totals in the hundreds of billions of dollars. And nobody is confused about the fact that without music to play, most of those stations would not have the audiences needed to attract those advertisers. If American radio stations ever did provide enough promotional value to justify not paying for public performances of the recordings—and the relationship between radio and record sales is both questionable and scattershot at best—that argument is even weaker in the 21st century market, when the prospect of selling copies or downloads is less likely than in prior decades.

At this point, while the pundits and the gurus keep spinning theories about “music discovery” (i.e. exposure) as an excuse to avoid paying creative people in many fields, the only clear observation we can make in this instance is that terrestrial radio is just one of several means by which we still listen to music. And the music is the ONLY reason we hear the advertisements that generate all the money in that industry. Surely, there can be no rationale for allowing entities like iHeartRadio, Cumulus, et al to keep paying nothing to the performers on whom they so profoundly depend.

Moreover, Rep. Issa explained that not only does America’s uniqueness in this regard deny royalties to both American and foreign artists in the American radio market, but it also denies royalties from foreign radio stations to American artists due to reciprocity. Because our radio stations don’t pay their artists, their radio stations don’t pay ours, which is rather extraordinary when we consider the amount of music the United States exports worldwide.

The AMFA is narrowly tailored to avoid imposing undue burdens on small, independent, and public radio stations through fixed, statutory rates for entities earning less than $1.5 million. For instance, a station earning $100,000 pays $10/year. Upon adoption of the bill, the larger entities will negotiate royalty arrangements with labels and other artist-representing stakeholders. But probably not without a fight by the broadcasters over passage of the bill itself.

The broadcasters have enjoyed a free ride for a very long time, and perhaps they will once again throw more money than the average musician ever earns at an effort to maintain the status quo. But on the other hand, maybe they’ll see the writing on the wall this time. Because at least when it comes to artists’ rights, many Members of Congress seem to have more finely tuned their bullshit detectors in recent years. And one upside of the of the fact that the broadcasters have successfully squashed the performers’ rights for so many years, is that every argument they can present, has already been made hundreds of times.

… no one would argue with the fact that the promotion which records receive from broadcast exposure boosts record sales and attendance at performers’ concerts. This promotion is more than adequate compensation for the broadcast performance. The undeniable truth is that many recording companies and artists would be forced out of business overnight if broadcasters stopped playing their records over the air.

That was in a letter submitted on behalf of the North Carolina Broadcasters to the Copyright Office in 1978. And what little purchase on reality the argument had then has long since eroded as a foothold in the contemporary market. Time to play fair and give the musicians a little cut of the revenue their work generates. Because without the music, nearly all the radio stations would be forced out of business overnight.

Photo by hurricanehank