In 2015, countless new technologies bring us music and entertainment, yet we have no uniform licensing system in place to ensure that digital, satellite and AM/FM radio play by the same rules. The United States is behind the times, and we are long overdue for an update that will see performing artists fairly compensated for their work.
Due to special-interest exemptions, short-term reactions to changing technologies and congressional gridlock, the law that governs royalty payments is inconsistent and unfair. New technologies are put at a disadvantage by the current licensing system: Internet broadcasters like Pandora pay royalty rates comparable to those that would have been negotiated in the free market, while cable and satellite providers pay a below-market rate under a “grandfathered” provision that predates the development of Internet radio.
Meanwhile, terrestrial radio pays nothing to performing artists and musicians. Some of the biggest and most successful digital services have argued that the law does not require them to pay for music recorded before Feb. 15, 1972, cutting off payments to older artists (although there are ongoing litigation and settlement negotiations with Pandora).
To bring the music marketplace in line with the times, creating a system that is technology neutral and that fairly compensates all performing artists, we have introduced the Fair Play Fair Pay Act of 2015. Supported by a broad left-right coalition, the legislation will provide a needed balance to America’s music-licensing system. The act would:
- Establish a terrestrial performance right so that AM/FM stations pay performance royalties under a fair market value for the music they use.
- Protect small, local and public broadcasters by capping terrestrial royalties at affordable rates. Stations with less than $1 million in annual revenue would pay $500 per year; noncommercial public radio would pay $100; religious and incidental uses of music would pay no royalties.
- Create platform parity to level the playing field among terrestrial, satellite, cable and Internet radio so that all forms of radio pay fair market value for music performances.
- Require the payment of royalties for sound recordings made before Feb. 15, 1972.
- Protect songwriters and publishers by clearly stating that nothing in this bill can be used to lower songwriting royalties.
- Streamline the allocation of royalty payments to music producers by codifying industry practices, ensuring artists receive their fair share from direct licensing of all eligible performances.
Artists of all genres and eras have backed the legislation, including Elton John, Chuck D, R.E.M., Annie Lennox and Rosanne Cash. The bill has the backing of many organizations, including AFL-CIO, American Federation of Musicians, MusicFirst Coalition, The Recording Academy, RIAA, SAG-AFTRA and SoundExchange.
Performing artists have been unfairly treated by the law for many years. We must update it so that music creators can prosper in the years ahead.