Reps. Ted Deutch and Darrell Issa introduce the American Music Fairness Act to make US radio stations pay for the use of sound recordings

By Emmanuel Legrand

The US music industry has rallied to, once again, try to convince Congress to pass a legislation that would finally introduce a performance right for sound recordings when they are played by AM and FM radio stations in the country. And this time, there is the belief that there is a window of opportunity to make it happen.

 The American Music Fairness Act was introduced in the House by Reps. Ted Deutch  (D-FL) and Darrell Issa (R-CA) to ensure that performers would receive compensation when recordings are played by US radio. The bill includes broad exemptions and low annual flat fees for smaller stations and public, college, and non-commercial broadcasters. 

  “Under the AMFA for the first time, artists will see a small piece of the massive profits made on the backs of their creative works. It is time for Congress finally to tell musicians that we will end this unfair deal that has been forced upon them,” said Rep. Deutch during an event in Washington, DC's Capitol, where he and Issa were surrounded by such artists as R&B legends Dionne Warwick and Sam Moore as well as more contemporary artists such as Ken Casey, lead singer of Dropkick Murphys, and Blake Morgan, the founder of the #IRespectMusic campaign.

Fairness and justice

  The event was also attended by executives such as Michael Huppe, CEO of neighbouring rights society SoundExchange, Daryl Friedman, Chief Advocacy Officer at The Recording Academy  and former Congressman Joe Crowley, Chairman of musicFIRST, the music industry coalition supporting performance rights for recordings.

Dionne Warwick with Rep. Ted Deutch (right)
and musicFIRST's Joe Crowley (left) on Capitol Hill.

  Warwick said it was Frank Sinatra who first alerted her to this issue, and she's been advocating for this right  for the past 28 years. "That's how long I have been active," she said. 

  She went on: “It’s been a pleasure to tell those that didn’t know that we don’t get paid for recordings that are played on the radio. I’ve been asked that question and when I say ‘No, we don’t,’ they’d look at me like I had two heads. But they do know now what is the truth: that we are not paid.” She said it would "wonderful" to be paid by radio stations that have been playing her music since 1962. "We want to be compensated," she said.

Going to the next step

  Sam Moore, of Sam & Dave fame, said it was an issue of "fairness and justice." He explained: "You’re talking about radio that says, ‘Well, they should be appreciative that we play them.’ Well, then you remaster our music and put it on the air you don't give us any money? But you got people you have to pay like the bathroom attendant, the garbage man, food people, but you don’t wanna pay Dionne Warwick, Sam Moore and the rest of my peers? That's not fair.”

  He added: “You're gonna tell us you can't pay us? That they're going to go out of business when they make billions? That's not fair. The introduction [of the AMFA] is wonderful. I’m very happy about it. But we gotta keep going to the next step. Radio: Come on, guys. Be nice. Be nice and be fair, because this isn't right what you’re doing.”

Protecting songwriters' revenues

  The American Music Fairness Act would require FM/AM radio stations to pay a performance right for playing recordings.

> The law would apply to stations whose gross annual revenue is greater than $1.5 million, or stations owned by parent companies whose annual revenue tops $10m.

> Stations whose gross annual revenue is lower than $1.5m, or stations owned by parent companies whose annual revenue does not exceed $10m will pay $500 annually.

> Under the provisions of the American Music Fairness Act, the annual fee that non-commercial broadcasters would pay for sound recording royalties for their over-the-air broadcast will be of $100 and is not expected to go up in the future. 

> Broadcasters with annual budgets under $100,000 will pay only ten dollars.

> The law will also protect songwriters by ensuring payment to artists do not come out of their share of royalties. 

Rectifying an injustice

  In a statement, musicFirst said the legislation "rectifies an injustice that has existed for decades: despite the hundreds of billions of dollars that massive media corporations like iHeartRadio and Cumulus have been paid by advertisers, they have never shared a penny of that money with artists."

  musicFirst also claimed that American Music Fairness Act "levels the playing field by ensuring all competing music platforms are treated the same." If passed, the legislation will put an end to the "archaic and unfair subsidy under which FM/AM stations pay nothing for recorded music while their digital competitors pay fair market value royalties."

  Other co-sponsors of the Bill include Rep.Jerrold Nadler (D-NY), Chair of the influential House Judiciary Committee, Rep. Tom McClintock (R-CA), Rep. Karen Bass (D-CA), Rep. Diana Harshbarger (R-TN) and Rep. Judy Chu (D-CA).

Discriminatory treatment

  Rep. Issa (R-CA) said passing the legislation would trigger much bigger flows of revenues to US rights holders than just the money collected in the in the US, as it would put an end to the discriminatory treatment faced by American artists who don't get paid when their music is played on radio around the world due to the lack of reciprocity in the US. He took the example of the Beach Boys who don't get paid when their music is played in the UK. "They are not getting money because we don't pay [British] artists," he said.

  Issa added: “We have said for years that one penny [for artists] unleashes vast amounts of money around the world that’s not coming to these artists because we pay nothing. The fact is, in almost every developed country they do pay, but they don't have to pay our artists because we don't pay their artists. Even if it is one penny, it would put all of these artists in a different situation.” 

  The legislation is likely to be strongly challenged by theNational Association of Broadcasters (NAB), which regroups the vast majority of commercial broadcasters  in the US. The NAB is pushing for a legislation named Local Radio Freedom Act that would ban once for all the all new tax and royalties applicable to radio stations. 

NAB strongly opposes the legislation

  Through its President/CEO Gordon Smith, the NAB said it "strongly opposes the American Music Fairness Act or any imposition of a performance royalty on America’s local radio stations. For decades, broadcast radio has enjoyed a mutually beneficial relationship with the music industry, launching and sustaining the careers of countless artists, promoting album sales and streams, and helping to foster a robust music-creation environment that is the envy of the world.”

  Meanwhile, several community and non-profit radio organisations – such as the Alliance for Community Media, Common Frequency, the National Federation of Community Broadcasters, Media Alliance, Prometheus Radio Project and REC Networks– have voiced their support for the legislation pushed by Reps Deutch and Issa.

  In a joint statement, they said the legislation would "ensure that performing musicians will be paid for their work when played on the radio, as is already the case in most of the world and that it contains "important provisions ensuring that small and non-commercial broadcasters will not be unduly burdened."

A mutually supportive relation with community radio

  They added: "Community broadcasters and independent media give voice to the experiences, concerns, and creativity of diverse communities. This is one reason why musicians have been strong supporters of expanded LPFM opportunities. We believe that the relationship between community broadcasters and musicians should continue to be mutually supportive, and we're proud to stand together today."

  The American Music Fairness Act is endorsed by: the American Association of Independent Music (A2IM), the American Federation of Musicians, The Recording Academy, The Recording Industry Association of America (RIAA), SAG-AFTRA and SoundExchange.


[Analysis: Now's the right time

Back to square one, for the umpteenth time in decades. The United States old scourge of performance rights on sound recordings that the music industry has tried to fix for years, without success so far, is back in the news.

  That the US do not recognise these rights, codified in the Treaty of Rome, is a blatant anomaly. It hampers the ability from US labels and performers to collect what is due to them when their music is played outside the US, because there is no reciprocity in the US. 

  Paying royalties for playing music should be a no brainer. Stations pay songwriters and publishers, but not labels or performers. What's the logic? Imagine a grocery shop not paying its main suppliers on the grounds that they should be grateful for the promotion they are receiving from being displayed in the shop!

  That's the fallacy that broadcasters have been able to sell to policy-makers for decades. In his reaction to the new Bill, NAB President/CEO Gordon Smith highlighted the "robust music-creation environment that is the envy of the world."

  But in the UK, France, Germany, and many others countries, there is an equally robust relationship between radio stations and the music industry, except that radio stations do pay performance rights; and to this day, not one single radio station has gone bankrupt because it has to pay performers and record labels.

  So what makes this new initiative likely to be more successful today than it was yesterday? Well, nothing and everything. Nothing in that radio broadcasters will fight tooth and nail to prevent anything from happening on Capitol Hill.

 
  Everything in that the landscape has changed beyond recognition. The status of radio stations as the natural partners of record labels and artists to expose and promote music has been seriously downgraded, as streaming services and social networks such as TikTok or Snapchat now act as discovery tools and accelerators of success. So the "radio's the best way to promote music" narrative has gone, and it will be hard for broadcasters to claim the opposite.

  But what has also structurally changed is that most broadcasters, or at least those that do not want to be left behind as they are transitioning to digital, are webcasting their programmes. And guess what's happening when they webcast music? They do pay performance rights on sound recordings as per the provisions of the DMCA. iHeartRadio, the biggest broadcaster in the US, is also among the top clients of SoundExchange.

  So it is going to be an interesting exercise to see how the National Association of Broadcasters will be able to explain that it is OK to pay for recordings when you webcast a programme, but not when that same programme is beamed through an over-the-air network.

  What has also changed is the legislative agenda. A few years ago, for the greater good of the eco-system, labels and performers agreed to leave aside the issue of performance rights on sound recordings to ensure the passage of theMusic Modernisation Act. That's done, and there is no other pressing issue for the industry so it can go all in on this issue, without risking to break China in other parts of the shop.

  The NAB has its own legislation pending, and supported by many on the Hill. But all it will do is prevent any change to the status quo, and not answer a structural unfairness, so maybe it is time for NAB to cease the moment and do the right thing by voluntarily come to the table and negotiate a good deal (i.e. one that makes both parties unsatisfied) with radio station accepting to pay a fee for the use of recordings in exchange for better rates, before it is forced upon them.  

  When this happens, it will finally fix an anomaly and the world will applaud. And money from overseas will start flowing back to the US, to the benefit of everyone. 

  For the moment, it is sill wishful thinking, but it is not unattainable. As Dionne Warwick said when she paid a visit to the Hill, time has come for artists to be compensated by US radio stations when they use recorded music. Yes, it's about time.

Emmanuel Legrand]