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A “Game-Changing” Moment in the Fight for Fair Pay for Music Creators

05 February 2015

Washington, D.C. – Today, the United States Copyright Office issued a new report calling for broad reform of music licensing to provide fair pay for music creators.

Ted Kalo, the Executive Director of the musicFIRST Coalition, issued the following statement:

“The Copyright Office is the nation’s preeminent authority on copyright issues – and they don’t have a dog in this fight other than coming up with the best and fairest policy we can. When they call for an AM/FM performance right for sound recordings and ‘licensing parity’ to level the playing field among music services and technologies, that’s a game-changing moment for this debate.

“The Copyright Office could not have been more clear that we need broad reform to make music licensing work better for everyone who loves and creates music. That includes artists, record companies, songwriters, music services, and above all fans looking for a sustainable, accessible music ecosystem.

“The Copyright Office was particularly emphatic about the need to end the decades-long loophole that allows Big Radio to use any music it wants without paying artists or record companies anything, saying their arguments for promotion ‘ring hollow’ and promotion by radio is ‘less apparent’ than ever in a world moving towards streaming and listening-based models. It also categorically rejected the idea that satellite radio should have its own special below-market rate standard, calling the SiriusXM grandfather a ‘legislative artifact.’”

Other key findings and observations:

“In the case of terrestrial radio, federal law exempts what is currently a 17 billion dollar industry from paying those who contribute the sound recordings that are responsible for its success. Apart from being inequitable to rights holders – including by curtailing the reciprocal flow of such royalties into the United States – the exemption of terrestrial radio from royalty obligations harms competing satellite and internet radio providers who must pay for the use of sound recordings” (p. 138).

In response to the NAB’s claims that promotional value justifies their decades-old performance rights loophole, the Copyright Office stated that Big Radio’s arguments “ring hollow” and the promotional value of radio is “less apparent” (p. 149). 

The Office called for an end to the “legislative artifact” (p. 49) of SiriusXM’s below market rate standard and for fair market pay for music creators on all platforms saying “[t]here is no longer a threatened piano roll monopoly, and satellite radio is a mature business…In the Office’s view, there is no policy justification to demand that music creators subsidize those who seek to profit from their works” (p. 144).

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