Royalties paid for the use of music by broadcasters and digital media companies, and other issues about music rights, can be an incredibly dense subject, with nuances that can be overlooked. I participated in a CLE webinar earlier this week, sponsored by the Federal Communications Bar Association, where we tried to demystify some of the issues in music licensing (see description here). I moderated a panel on the Hot Topics in Music Licensing, talking about the broadcast performance royalty, the appeal of the webcasting royalty decision, issues about the proliferation of performing rights organizations seeking royalties for the public performance of musical compositions, and more theoretical issues about the entire process of clearing music for use by broadcasters and other businesses. To highlight some of the issues, and some of the tensions in the world of music royalties, I put together the attached article. Hopefully, it provides some context on the relationship between some of these hot topics, and gives some food for thought as to how these issues can be addressed.
As 2023 begins, our “Hot Topics” panel will look at some of the current legal and policy issues in music licensing that may be relevant to the communications industry. Most of the issues we will discuss are ones that have been debated, in one form or another, in copyright circles for decades. But, as copyright can be so complicated with many stakeholders with differing interests, the chances of any final resolution to any of these issues may well be small. This article is meant to put some of those debates in context, as many of the specific issues, in one way or another, are intertwined.
The issue that likely will be the most contentious this year (and has been for decades) is the continuing effort of the recording industry to establish a public performance right in sound recordings that would apply to non-digital performances. For over 25 years, recording artists and the record labels (which usually hold the copyrights to popular recordings) have had a right to a performance royalty for digital performances. Broadcasters who stream an online simulcast of their programming, along with webcasters and others who make non-interactive digital transmissions, must pay a performance royalty, generally to SoundExchange. The rates to be paid are set by the Copyright Royalty Board. But in the US, over-the-air broadcasters, restaurants, bars, clubs, retail establishments, and others who publicly perform music pay only for the performance of the musical compositions (the “musical work”), not for the performance of the song as recorded by a particular artist (the “sound recording”). That has been a point of contention for a century, almost from the moment when recorded music first appeared, but the issue has become particularly heated in the last two decades, once the sound recording public performance right was established after being mandated by copyright legislation in the late 1990s.