US coalition led by SoundExchange asks for 'national treatment' for American performers and owners of sound recordings

By Emmanuel Legrand

A coalition of US organisations representing labels and performers, led by Washington, DC-based neighbouring rights society SoundExchange, has launched the "Fair Trade of Music" campaign, asking for "national treatment" and "fair and equal treatment of music creators when their music is played in markets around the world."

  "Many countries currently discriminate against some non-native music creators by denying them royalties for the use of their work, despite royalties being otherwise paid to creators who are nationals of those countries for the exact same use," wrote the coalition in a statement.

  As part of the campaign, the coalition sent a joint letter to US Trade Representative Robert E. Lighthizer, urging him "to make full national treatment for sound recordings a priority in future trade agreements, particularly in the ongoing US-UK negotiations." In this letter, the music industry groups pledged to work with Ambassador Lighthizer "to achieve full national treatment for American music creators in all future trade agreements."

Losing $330m in royalties

  "Without national treatment provisions to ensure fair treatment, US music creators are losing millions of dollars in royalties," wrote the coalition. SoundExchange estimates that US music creators lose more than $330 million in royalties each year "without universal national treatment protection."

  This situation is rooted in the fact that many countries around the world, which have neighbouring rights provisions in their copyright law, i.e. equitable remuneration for the use of recordings by media and in public spaces, do not pay royalties to American rights holders (performers and record labels) on the basis that such rights are not recognised in the USA, as terrestrial radio stations to not remunerate for the use of recordings.

  In addition, since the US has not ratified the World Intellectual Property Organisation's Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organisations of 1961, many neighbouring rights societies are using the situation to decline royalties payments to US performers and labels for the use of recordings in their respective countries.

Call for equality

  The US system only recognises performance rights for recordings when music is played on non-interactive platforms such as iHeartRadio, Pandora or satellite-delivered service SiriusXM. These royalties are collected by SoundExchange and distributed to rights holders, including international rights owners.

  A source at SoundExchange acknowledged that the US do not have the full range of neighbouring rights, but noted that the US has a radio right which is digital and "generates much more money than terrestrial radio does in European countries."

  The source argued that the lack of rights' payment from terrestrial radio penalises first and foremost US performers and labels, who are as eager as anyone to see such rights exist in the US. "Nobody's getting these rights and SoundExchange has been arguing for the recognition of those rights," said the source. "These are two different issues. Europeans are not denied access to the rights collected in the US, but access to equitable remuneration in UK and other countries is denied to US artists. It is more about equality rather than the scope of rights."

End discrimination

  In February, SoundExchange filed comments with the US Trade Representative (USTR) asking for action to be taken against countries such as the UK, France, Japan, Germany, that refuse to give American recording artists and labels full national treatment. In March, Canada's Government implemented the US-Mexico-Canada Agreement, which granted national treatment protection to US music creators in Canada. As a result, US performers and labels will from now on be able to collect neighbouring rights monies from Canada.

   "Equal treatment is fundamental to international law, and this principle should extend to all music creators, no matter where they are from, who deserve to be paid fairly for their work," said SoundExchange President and CEO Michael Huppe. "Our goal is to end discrimination in the global trade of music. That should be a priority for our entire industry, including recording artists and labels on both sides of the Atlantic and around the world. The ongoing negotiations between the US and UK present an opportunity to make significant progress toward that goal."

  The coalition includes the American Association of Independent Music (A2IM), American Federation of Musicians, Future of Music Coalition, Gospel Music Association, Music Artists Coalition, Music Managers Forum-US, Recording Academy, musician's union SAG-AFTRA, and artists' advocacy group musicFIRST.

 The Fair Trade of Music website can be accessed here: https://www.fairtradeofmusic.com.