The Performance Rights Act - Part Two. Fact Sheet.

Something to think about:

From : www.futureofmusic.org

Consider this. When you hear John Coltrane's recording of 'My Favorite Things' on the radio in the US, the estates of Richard Rodgers and Oscar Hammerstein - the composers of 'My Favorite Things' - are compensated through ASCAP. But the estate of John Coltrane receives nothing for this performance.
However, if you hear the same performance on XM or Sirius, or via a webcast, or on a cable music station - even on that terrestrial radio station's webcast - both Rodgers and Hammerstein's estates AND John Coltrane's estate are compensated.
Why the difference? US terrestrial broadcasters are exempt from paying a public performance right for sound recordings.

Royalties for Songwriters and Composers in US
Royalties are generated when a copyrighted song is performed publicly - whether on a radio station, at a sports event, or on a jukebox. In the US, these royalties are collected by ASCAP, BMI and SESAC and distributed to the member songwriters and publishers. As an indication of the significance of this revenue stream, ASCAP reported distributing over $680 million to its members in 2006..

No Royalties to Performers for Terrestrial Radio Play
Although royalties are distributed to songwriters and publishers for public performances for terrestrial radio play, this right does not extend to the performers or the sound recording copyright owner (usually the record label). So, when you hear Patsy Cline singing "Crazy" on the radio, songwriter Willie Nelson and his publisher are compensated through BMI, but the estate of Patsy Cline receives no pay for the performance. Neither do the studio musicians, backing vocalists, or the record label.
This arrangement is the result of a long-standing argument made by terrestrial broadcasters that performers and labels benefit from the free promotion received through radio play. Broadcasters contend that airplay increases album sales, which leads to compensation for performers and record labels. As a result, broadcasters have, for decades, convinced Congress that they should be exempt from paying the public performance royalty for sound recordings. But the broadcasters' argument is steadily losing relevance, and their exempt status becomes more questionable when compared to other countries' broad requirements for performance royalties.

Exemption in US Leaves Artists' Money on the Table
The US is one of the few industrialized countries - if not the only one - that does not have a terrestrial broadcast performance right for sound recordings. At least 75 nations, including most European Union member states, do have a performance right. This means that foreign broadcasters flow royalties to songwriters/composers and performers. But since there is no reciprocal right in the US, foreign performance rights societies cannot distribute these royalties to American performers. This leaves tens of millions of dollars of royalties on the table annually rather than in the pockets of American artists.


Digital Performances Mean Broader Compensation
Terrestrial radio's unfair exemption is even more obvious when viewed alongside new media platforms. Broadcasters of digital performances - webcasters, satellite radio, cable subscriber channels - obtain licenses from ASCAP, BMI and SESAC which compensate the songwriters and publishers of the music they play. But because of the Digital Performance in Sound Recording Act of 1995 (DPRA), they also pay royalties to the performers. SoundExchange - the performance rights organization established by the DPRA - distributes the royalty payments directly to performers (45%) and to the sound recording copyright owner, which is usually the record label (50%). Non-featured performers receive 5% of the royalties, via a royalty pool managed by AFM and AFTRA. This means that terrestrial radio is the only medium that broadcasts music but does not compensate artists or labels for the performance.

Time for Harmonization
There are two clear reasons why it's important for artists and advocates to support the expansion of the public performance royalty. First, as the consumption of music moves further away from the purchase of CDs and towards "listens" via digital streaming, satellite radio and webcasting, the likelihood of performers being compensated based on traditional/retail sales continues to decline, while revenue from performances continues to increase. Second, the US exemption penalizes US stakeholders in the international arena and results in losses of as much as $100 million annually for US musicians and labels. This also hurts the US economy and limits our ability to exploit one of our few industries that has a positive balance of trade. As the music marketplace goes global, the need for a broad-based performance royalty is more important than ever.



Legislative Action in 110th Congress
Recording artist groups including FMC, AFTRA, AFM, Recording Artists' Coalition and the Recording Academy have continuously advocated for the public performance royalty for sound recordings. In 2007, the campaign ramped up considerably with the creation of the MusicFIRST Coalition, as well as repeated congressional attention on digital music services, webcasting rates, radio, media ownership and copyright. In December 2007, Rep. Berman and Sen. Leahy introduced HR 4789/S 2500, the Performance Rights Act, which would remove the performance royalty exemption for terrestrial broadcasters.
FMC urges Congress to update the Copyright Act to extend the public performance right for sound recordings to terrestrial and HD radio. Unless Congress acts, incumbent broadcasters will continue to exploit their exempt status that sets them apart from other media providers

The Performance Rights Act Part One.

I can't say that the current state of terrestrial commercial radio leaves me with any level of enthusiasm. I often hear: "Girl I miss hearing your music? We miss good music. I stopped listening to radio", and so on. Of course there are countless artists who have been forced off the mainstream radar. It's a steep mountain.

It's not that the music variety is gone or that certain artists (especially those of us over 30 or 40's even) aren't making good music. We're here, it's radio which has abandoned us - quality music, balance and diversity in programming.

We've all seen the decline year by year. Hip-Hop and gangsta rap dominated and while delighting millions, also alienated millions - never to return. These days, it's common to hear the complaints of the 'adult' listener, who have been abandoned by the system. Apparently, they think the 'adult' listener should be relegated to either oldies or 'smooth' jazz. We can't handle anything progressive, diverse or appreciate quality lyrics judging by what's in heavy rotation.

Business reports constantly signal sagging ratings. People are continuing to tune out. We have options and iPods. We have the internet, online streaming, satellite radio, and so on. You can go directly to artist websites and social networks to hear music now.

With the deregulation of radio in the late 80's courtesy of the Reagan Administration, the downturn has been slow and steady. Privately owned stations were bought by corporations, who could now own unlimited stations and control the content. The Clear Channel Era was born. Local flavor began to disappear, as fast as the Mom and Pop family stations were bought out. In recent years syndicated radio has continued the dilution of local flavor. Advertising became the name of the game - generating millions of dollars. Pay For Play, legal payola, shrinking playlists, etc. Remember this when you ask an artist why their music is no longer on the radio, it's not up to us. If you are an independent the window shrinks a bit more.
Conglomorates like Clear Channel also own billboard, concert venues, etc. What we now have are a monopoly of radio, TV and "news" run by a few giant entities.

I can remember how special it was to travel from coast to coast, north and south - and hear something new and unique to the region. There was a time when there were truly black owned stations. Systems were manual, not automated. Disc jockeys could play what they wanted, even if that meant album cuts, double plays or as was the case when I first heard Stevie Wonders 'Songs In The Key of Life' - the entire album. I can remember being transfixed by the music I heard and couldn't wait to run and buy it.
The days when music represented value, and the though of trying to get something so special for 'free' didn't exist. I can remember when news was news and not gossip or entertainment being promoted as such.

Syndicated radio continues to put people out of work in local cities, just flip a nationwide switch and then voila - radio for the masses. There was a time when artists, if if they weren't in rotation on any given station, at least had a shot to go in to your local privately owned radio station to get some interview airtime to promote your music, concert, or charity event. Now they want to know how many ad dollars will you be generating to the station.
Local disc jockeys don't stand a chance. This syndicated practice would seem less healthy for the future growth of radio, but that's another subject.

Currently, the controversial Performance Rights Act is making it's rounds through Congress. The timing couldn't be worse for terrestrial radio and artists to a degree. Businesses are grasping at straws, and fighting the changing times. Old rules just can't apply now. Major corporations are closing down, filing for bankruptcy or tring to restructure franticly - because they waited too long to adapt to shifting paradigms.

This bill isn't about putting stations out of business, it's not a black issue, it's not a greed issue. The bill impacts all artists from popular, R&B, jazz artists, classical and so on. In Europe they have been paying artists for years through sources like PRS (Perfoming Rights Society).

Radio = advertising revenue. On air personalities promoting themselves and their events, books, causes, websites, replace music more and more it seems. As it is radio is becoming less a vehicle for promotion for the vast majority of artists using the old model.

New media has caused a call to action for revision and further compensation for those who work in the film industry, which has seen a similar fight. We aren't talking about the mega superstars here - we are talking the majority of people who are simply working in the arts to make a living, because it is their passion.


Some say if this bill is passed it will be the end of terrestrial/commercial radio as we know it. Is that good or bad? It hasn't been the radio I know in over a decade. Has it to you?

From my point of view fear based tactics always seem extreme. When a similar bill passed for web radio, it was said that it would force small online broadcasters off the air - it didn't happen. Some are saying that if this bill passes there will be more talk radio, less music because radio will just choose to stop playing music because of the cost. It even costs to get a pillow on an airline now - times change.

What is clear is that as the music and radio industry plods along, everyone will have to make new adjustments and settle for smaller pieces of a once rather large pie.