THE TRUTH ABOUT PERFORMANCE RIGHTS
What is a Performance Right?
Every time you stop the dial to listen to an artist's distinctive voice, radio stations make money by selling advertising around it. However, AM/FM (or “terrestrial”) corporate radio doesn't pay a cent to the musicians, vocalists, and recording artists or labels who make the sound that brings in listeners – and money.
A “performance right” would require AM/FM radio stations to compensate recording artists and copyright owners when they use music, comedy, spoken word, or other recordings to make money, just like they compensate songwriters. For the first time, recording artists would get a piece of the massive profits made on the backs of their creative work.
The better question is how this loophole, which lets AM and FM radio stations exploit musicians, has survived for so long. There has been a push to change this law for more than 40 years, but the AM/FM corporate radio conglomerates have not been willing to give up their free gravy train without a fight. Now, more than ever, with music coming from all kinds of new sources, radio should be held to the same standard as its competitors. It is time for AM and FM radio to pay artists and copyright owners fairly.
Who Pays Now?
AM/FM radio's competitors – Internet, satellite, and cable – all pay a performance right when they use the creative property of artists and rights owners. In addition, every industrialized country, except the United States, has a performance right. Consequently, when American-made music is played overseas, other countries collect royalties for the music, but do not pay American artists because we do not collect for their artists here. AM/FM radio has long been required to pay songwriters, but has so far succeeded in stiffing the artists who bring recordings to life. The Fair Play Fair Pay Act would change that – bringing real fairness to radio for the first time.
Performance royalties would mean a better life for artists, who often struggle to make ends meet while others get rich from their creative property. A performance right would ensure that artists are justly paid and finally put the stereotype of the 'starving artist' in the past, where it belongs.
What About Small Broadcasters, College Radio, and Public Radio?
The Fair Play Fair Pay Act includes historic protections for small broadcasters as well as education or noncommercial radio broadcasters. Broadcasters with less than $1 million a year in revenues would have their royalties capped at $500 annually while college and public radio stations would pay only $100 annually. Corporate radio giants like Clear Channel have hidden their greed behind a fictional threat to local radio for far too long – this bill is no threat to small broadcasters, talk radio, educational radio, or public radio. Everyone in the music community understands the unique value and importance of these smaller stations and is committed to a solution on performance rights that works for the entire music community, including these cherished broadcast outlets.
What About Bars and Restaurants?
The Fair Play Fair Pay Act exempts bars and restaurants from any new royalty payments and makes no changes to current law that would impact bars and restaurants in any way.
No! Corporate radio has wrongly labeled performance royalties a "tax." No money is going to the government here, but to the creators of sound recordings – the lifeblood of any radio station. No other business in the world claims they should make a profit without paying for the raw materials they use – bakers pay for flour, designers pay for cloth, and corporate radio should pay for music. Ending this loophole would mean an even playing field for all broadcasters and a well overdue end to unpaid exploitation of artists.
What is the Local Radio Freedom Act?
Year after year, the NAB and its allies offer a non-binding “Sense of Congress” resolution called the “Supporting the Local Radio Freedom Act.” The NAB then points to support for this resolution as “proof” that Members of Congress oppose a performance right. This is intentionally misleading.
Why is it intentionally misleading? Let’s start with the title. If the resolution “supports” the “Local Radio Freedom Act,” there must be a “Local Radio Freedom Act,” right? Except there isn’t – no such bill or law exists. And if this resolution is supposed to be an indicator on where members stand, it must commit them to an actual, concrete legislative position, but it doesn’t. It is a 100% substance-free “Sense of Congress” resolution that would have no legal effect if passed. To put it in context, this is the same construct Congress uses to praise sports teams. It has as much legislative impact as a resolution passed at Model U.N.
The list of flaws goes on: the resolution purports to oppose a performance “tax,” but a performance royalty is no such thing, as the most ardent anti-tax experts, like Grover Norquist of Americans for Tax Reform, acknowledge. And it warns of danger to local radio, but small stations would be completely protected under a performance right – proposals to date would have them pay as little as $500 per year.
When presented with actual legislative proposals that protect those small stations, we are confident many cosponsors of this resolution will decide to stand with music creators.