Another bill in Washington, DC, is making its way through Congress that would pay artists and record labels for works on terrestrial radio. If that proposal sounds familiar, that's because the issue has been on Capitol Hill for some time without ever winning a presidential signature.
In 1988, Frank Sinatra sent a letter to Paul McCartney, Stevie Wonder, Ella Fitzgerald, Bruce Springsteen and about 20 other musical notables about a decades-old inconsistency in music copyright law. There is no reason why the writer and publisher should be compensated for radio plays but not the performer, he argued. Sinatra predicted a swift end to his activism. “We are optimistic that with a united effort, we will be able to achieve successful results in a reasonable period of time,” he wrote. But 36 years and many legislative efforts later, other artists are still working on the project.
The latest artist to pick up the baton is country icon Randy Travis, who appeared before a House Judiciary subcommittee hearing on Wednesday (June 26) to support the latest legislation to address the issue, the American Music Fairness Act . Artists helped build radio in the U.S. and should be properly compensated, Randy's wife said. Mary Travis (Randy has had difficulty speaking since he had a stroke in 2013). Passing AMFA, he told lawmakers, “would finally right a lot of old wrongs.”
The safest statement of the afternoon, however, went to Subcommittee chairman Rep. Darrell Issa, who admitted the hearing was “a repeat of some things we've seen before.” In recent memory, lawmakers have introduced the Performing Rights Act in 2007 and 2009; the Free Market Rights Act in 2013; Fair Play, Fair Pay in 2015 and 2017; the Ask Musicians for Music (AM-FM) Act in 2019; and now AMFA in 2022 and 2023.
AMFA is similar to its predecessors in many ways: It provides accommodation to small broadcasters that reduce their rights obligations. It protects royalties paid to songwriters and music publishers for the performance of musical works on terrestrial radio. Most importantly, the bill codifies a proper attribution for sound recordings.
But is it any different for AMFA? “The language of the bill has not changed since then [the Performance Rights Act in 2009,” says Linda Bloss-Baum, associate director of American University’s business and entertainment program. “And I’d say kind of the appetite on both sides to have a meaningful negotiation hasn’t really changed either.”
The radio industry’s opposition to a new performance right certainly hasn’t changed. “A new performance royalty could spell the end for many local stations,” Curtis LeGeyt, president/CEO of the National Association of Broadcasters, said during Wednesday’s hearing. After surviving an advertising slowdown from the COVID-19 pandemic and facing the rise of streaming platforms, radio stations are arguably in worse financial shape than in years past. “Local broadcasters across this country are operating on extremely tight margins right now,” LeGeyt added.
The AMFA attempts to go easy on small broadcasters while holding regional and national conglomerates to a higher standard. Mike Huppe, president/CEO of SoundExchange, believes bill makes better accommodations for small broadcasters than its predecessors. Under the AMFA, stations that earn less than $1.5 million in annual revenue (and whose parent companies make less than $10 million in annual revenue) would pay $500 annually. Small, non-commercial stations with annual revenue of less than $100,000 would pay as little as $10 per year. “In that sense,” says Huppe, “this is the best bill for small broadcasters that there’s ever been.”
Unlike previous bills, the AMFA also includes language that says the Copyright Royalty Board, which would set royalty rates payable by stations, could take the promotional value of radio play, and the fact that stations currently pay sound recording royalties for streaming on their digital platforms, when setting rates. But that’s unnecessary, says David Oxenford, partner at Wilkinson Barker Knauer. “The section of the Copyright Act that deals with royalties that are payable to SoundExchange already has this part of the consideration” in determining how royalty rates are set, he says.
The main differences between the AMFA and its predecessors might not be found in the actual language of the bill. Market conditions have changed. At Wednesday’s hearing, lawmakers seemed more impatient and fed up than in years past.
In his closing remarks, Issa used his bully pulpit to warn broadcasters that Congressional intervention would be more painful than a negotiated deal with record labels. “I will tell you that at least this chair and the ranking member of the full committee, we stand ready to negotiate fairly small amounts to change a principle to get this behind us,” Issa said to LeGeyt. “And if you don’t take that, [then] honestly you have to live with the consequences.”
Issa's tone suggests that the climate in Washington, DC, has changed. Huppe believes that streaming and artificial intelligence have made people more aware of the “inequities” that creators face. Issa is among the members of the subcommittee who have sponsored legislation to protect intellectual property from the threat of generative artificial intelligence. Rep. Adam Schiffanother member of the subcommittee, was one of three lawmakers who wrote to the Secretary of the US Copyright Office out of concern that Spotify's decision to receive a reduced engineering royalty rate for its music-audiobook bundle was not in the spirit of the Act for the modernization of music.
In addition, radio could get a big boost from the AM Radio in Every Vehicle Act, which would require all cars built in the US to have an AM radio. The bill would mandate technology that benefits broadcasters. FM stations will also apparently be included in the in-dash stereo. Logically, at least, this could strengthen the case of artists and labels.
“We're not necessarily against him [AM Radio in Every Vehicle Act],” says Huppe, “but we'd say, how can you do that and not fix it [the performance right] At the same time;”
