Only One Leg of the Stool in Performance Rights Bills

On Tuesday and with little fanfare, identical bipartisan bills were introduced both in the Senate and the House that would require terrestrial radio stations to pay the same performance royalties to record labels and artists as satellite and Internet radio services. In the House, the lead sponsor of the bill was Rep. Howard Berman (D-CA), who was joined by Darryl Issa (R-CA), John Conyers (D-MI), John Shadegg (R-AZ), Jane Harman (D-CA) and Marsha Blackburn (R-TN). In the Senate, lead sponsor Senator Patrick Leahy (D-VT) was joined by Senators Orrin Hatch (R-UT), and Dianne Feinstein (D-CA).

PK has been qualifiedly supportive of the effort to level the playing field with respect to performance fees, but we are not supportive of simply giving the recording industry another revenue stream in the absence of a guarantee that the money will be used for more than simply lining the industry’s coffers. Our caveats are two: 1) the new fees must be accompanied by relief for webcasters, and particularly small webcasters, from the onerous fees imposed upon them this year by the Copyright Royalty Board and 2) any legislation imposing a performance fee on radio broadcasters must be accompanied by a requirement that artists’ 50% share of the fees cannot be taken by the recording industry to “recoup” advance payments or other funding companies typically give to artists. The record companies claim to have an oral agreement with the artists' union on this point, but if I was a union member, I would want that agreement set in stone.

Unfortunately, the legislation includes only one leg of the stool – it imposes the fees on radio broadcasters without helping webcasters or artists. To add insult to injury, the bill provides "special treatment for small, noncommercial, educational and religious stations," but does nothing to address the needs of small webcasters. In other words, the bill primarily enriches the recording industry, and allows broadcasters to make statements like this gem from National Association of Broadcaster flack Dennis Wharton, accusing the record labels of "Ebenezer Scrooge-like exploitation" of artists, and they are now "singing a new holiday jingle to offset their failing business model."

By the way, if you haven’t seen Talking Heads’ frontman David Byrne’s analysis of the past, present and future of the music business, don’t wait another second.

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