Senate action coming 10/15/9: Performance Rights Act

Posted by Clyde Middleton on Oct 12 2009 Filed under Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

There’s a bill coming to the Senate floor this Thursday. It makes sense on many levels – as surprising as that is in the US Senate – but we still need to tell our senators how to vote.

Here’s the nudge I got in an e-mail from Pandora:

The radio royalty system as it stands today is fundamentally unfair both to Internet radio services like Pandora, which pay far higher royalties than other forms of radio and to performing musicians, who receive no compensation when their music is played on AM/FM radio. There is a very important vote in the Senate this coming Thursday, October 15th, on a piece of legislation that represents a potentially major step forward in correcting both of these issues – establishing both a more level playing field across all radio and ensuring that artists are fairly compensated.

From that brief statement, it seems that there needs to be parity so the free market can operate as designed – no one get’s either punished or treated differently than anyone else providing the same product or service in the same industry. Push aside your first thought (if it was the same as mine) – internet-based stations do not have a lock on broadcasting on the net. Plenty of ground-based stations have both local airwaves and streams. If anything, ground stations have a lock on the local scene, and share equally the internet.

What exactly is going on? Jennifer Bendall, executive director of musicFIRST, sums it up rather quickly:

It’s unfair, unjustified and un-American that artists and musicians are paid absolutely nothing when their recordings are played on AM and FM radio. Music is their work, their livelihood. They deserve fair pay for air play.

The article goes on:

The Performance Rights Act will close an archaic provision of America’s copyright law that allows AM and FM radio stations to earn $16 billion a year in advertising revenue without compensating the artists and musicians who bring music to life and listeners’ ears to the radio dial.
…
AM and FM radio is the only music platform that does not pay a fair performance right to artists and musicians for the use of their work. Satellite, cable and internet radio compensate artists when they play their music. AM and FM radio however receives a free pass to broadcast the recordings of thousands of artists and musicians every day without paying them a penny.

Seems fair – everyone pays or no one pays. And since copyright law is actually written into the US Constitution, it would seem appropriate that it be honored – so all stations that play music, ergo profit off the creative work of someone else, should pay for the privilege.

Let’s look at the proposed law. The heart of it changed language to existing law. I’ve shown the changes by strikeout of deleted language and bold of new language

§ 106. Exclusive rights in copyrighted works

Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following: … (6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

§ 114. Scope of exclusive rights in sound recordings

(d) Limitations on Exclusive Right. — Notwithstanding the provisions of section 106(6) —

(1) Exempt transmissions and retransmissions. — The performance of a sound recording publicly by means of a digital an audio transmission, other than as a part of an interactive service, is not an infringement of section 106(6) if the performance is part of —

(A) a nonsubscription broadcast transmission;
…
(2) Statutory licensing of certain transmissions. —

The performance of a sound recording publicly by means of a subscription digital audio transmission not exempt under paragraph (1), an eligible nonsubscription transmission, or a transmission not exempt under paragraph (1) that is made by a preexisting satellite digital audio radio service shall be subject to statutory licensing, in accordance with subsection (f) if subsection (f) if, other than for a nonsubscription and noninteractive broadcast transmission, —

(A)(i) the transmission is not part of an interactive service;

OK, we could go on. They are red-lining out the “digital” concept. There is additional language for maximum fees for small broadcasters (less than $1.25 million in revenue) – they pay a fixed $5,000 a year.

By striking “digital,” it seems that the analog transmission of radio stations would now be included in the requirement to pay royalties. I am not qualified (nor do I want to be) to distinguish “digital” from “high definition” that I hear local stations claim that they broadcast.

Going back to the article cited in the opening, I find this statement compelling: “And because the U.S. doesn’t have a performance right, foreign stations do not have to pay American artists when their music is played on stations around the globe — an inequity that costs American artists tens of millions of dollars each year.”

There are two issues, it seems. First, some broadcasters are required to pay royalties – Pandora, for example – while other broadcasters of the same creative work for substantially the same purpose are not required to pay royalties. Second, artists are having their creative work used to profit 3d parties, and no portion of that profit is given to the artist.

I think this proposed law does what it should: Corrects both market anomolies.

Let your senator know how you feel before Thursday, October 15, 2009.

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