Performance Royalties for Performers on the Radio

Congressman Proposes New Rules for Music Royalties [pdf]

On Monday, Representative Melvin L. Watt, a Democrat from North Carolina, introduced the Free Market Royalty Act, a bill that would let record companies and performing artists collect royalties when their songs are played on the radio. It would also change the licensing process for both broadcast radio and online services that approximate radio, like Pandora, establishing a market for these services to negotiate rates with the rights holders.

Broadcasters in the United States pay only songwriters and music publishers; for nearly a century, they have argued that the promotional value an artist receives from having a song played on the radio is remuneration enough. Repeated efforts by the music industry have failed to establish such a royalty on the radio, and while laws in the 1990s created it online, Web services complain that they have been burdened with a cost not shared by terrestrial radio.

Mr. Watt’s bill would establish a performance right for AM and FM radio. In an ambitious move, it would also eliminate the compulsory licensing process that lets services like Pandora and Sirius XM circumvent labels by paying a rate set by federal statute. Instead, under the system proposed by Mr. Watt’s bill, radio and online outlets alike would have to negotiate for rights through a market administered by SoundExchange, a nonprofit agency, giving labels and artists the right of refusal.

[...] The National Association of Broadcasters, the radio industry’s lobbying outlet, reiterated its longstanding opposition, calling the royalty a “performance tax” and saying that 183 members of Congress had supported its preferred bill, the Local Radio Freedom Act [H.CON.RES.16], a nonbinding resolution against “any new performance fee, tax, royalty or other charge” on radio stations.

Of course, this is more important than a continuing resolution, but it’s always interesting to see when these things turn up. I’d give the Thomas link to the text of the bill, but I doubt it’ll be posted before the government shuts down tonight at 12:01.