over the air performance royalty

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Last week, the Senate Judiciary Committee held a hearing on the American Music Fairness Act bill which proposes to adopt a new music royalty to be paid by over-the-air radio stations.  The royalty would be payable to SoundExchange for the public performance of sound recordings.  This means that the money collected would be paid to performing artists and record labels for the use of their recording of a song.  This new royalty would be in addition to the royalties paid by radio stations to composers and publishing companies through ASCAP, BMI, SESAC and GMR, which are paid for the performance of the musical composition – the words and music to a song. This legislation is very similar to a bill introduced in the last Congress (see our article here), and is another in a string of similar bills proposing to establish a broadcast performance royalty that have been introduced in Congress over the last decade.  See, for instance, our articles here, here, here and here on previous attempts to impose such a royalty.

This past week’s hearing featured three witnesses.  A broadcast station owner from eastern North Carolina, Henry Hinton, spoke on behalf of broadcasters warning of the impact that such a royalty would have on the economics of broadcasting and the public service that broadcast radio stations provide.  His written statement is here, and a podcast where he further explained his testimony is here.  Michael Huppe, the CEO of SoundExchange, testified in support of the royalty arguing, among other things, that the US was an outlier in not imposing this royalty on broadcasters, and that the broadcast industry should not be able to make its tens of billions of dollars off of artist’s work without compensating them (that revenue figure must have been meant as a historical one, as even he admitted that total revenue for the radio industry was only $14 billion – and some of that comes from talk radio that presumably would not be affected by this royalty).  His statement is here.  Also testifying was Gene Simmons, the frontman of the legendary band Kiss, who argued that this legislation was needed to compensate the next generation of artists so that they get paid for radio play.  His statement is here.  The hearing was contentious at times as most of the committee members in attendance were supporters of the royalty (though at least 25 Senators and close to a majority of the House have signed on to an NAB resolution opposing the royalty).  The entire hearing can be viewed on the Committee’s webpage here.Continue Reading Congressional Hearing on American Music Fairness Act Proposing New Music Royalty on Radio Stations – What is Being Considered

On Wednesday, the House Judiciary Committee will be holding a “mark-up session” (see this notice of the session) where they will be considering the American Music Fairness Act which proposes to impose a sound recording performance royalty on over-the-air broadcasting.  This would be a royalty paid to SoundExchange to benefit the recording artist and copyright holder (usually the record company) and would be in addition to the royalties already paid to composers and publishing companies through royalties paid to ASCAP, BMI, SESAC and GMR.  A mark-up session considers amendments to the bill and could lead to the committee’s approval of the bill.  If approved by the Committee, the bill would still need to be approved by the full House of Representatives and the Senate (and signed by the President) before it became law.  With the current session of Congress coming to a close at the end of the month, the proposed legislation would need to start over in the Congress.  Thus, unless the bill is tacked on to some must-pass legislation in this “lame duck” session of Congress, any action this week by the committee will likely simply be a marker for action in the new year.

The NAB has already issued a statement about the session, pointing out that a majority of the House members have signed on to the Local Radio Freedom Act stating that they will not vote for this legislation.  The statement also reiterates the NAB’s interest in working on a “mutually beneficial solution” to the issue of the broadcast performance royalty (an interest in a possible solution we wrote about here).  Nevertheless, with this issue back on the table, even if only in a symbolic way, we thought that we should re-post our summary of the American Music Fairness Act and the issues that it raises that we wrote last year, when the legislation was first introduced.
Continue Reading House of Representatives Judiciary Committee to Consider American Music Fairness Act Proposing Sound Recording Performance Royalty on Over-the-Air Broadcasting

Here are some of the regulatory developments of significance to broadcasters from the last week, with links to where you can go to find more information as to how these actions may affect your operations.

  • FCC Chairwoman Jessica Rosenworcel announced several leadership changes at the FCC. The changes include a new head of the Media

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