The latest bid for recording artists to earn royalty payments for songs played on AM-FM radio is likely to stay bottled up in Congress.
Any chance of this bill succeeding where similar efforts have failed over the past 35 years apparently ended last week, when the prime sponsor, Rep. Mel Watt, D-N.C., was confirmed by the Senate as director of the Federal Housing Finance Agency. Even if Watt had stayed in Congress, though, the odds for enactment in 2014 were long.
Songwriters and publishers receive royalties for airplay by terrestrial and digital radio, but the bands that record the songs get paid only when their work is played on digital radio. The decision to exempt radio stations from paying performers was made decades before digital airwaves were created, based on the concept that radio play amounted to free advertising for bands that would result in selling more albums, singles and concert tickets.
The United States is one of the few major nations not paying radio royalties to performers, an angle that Watt focused on when he introduced the legislation at the end of September. He also played up the fact that stations make money off of the music.
“AM/FM stations profit from advertising revenue,” he said in a statement. “Why do advertisers pay? Because people listen. Why do people listen? To hear the songs. For many stations, take away the music and you take away the audience.”
The National Association of Broadcasters, which represents radio stations, opposes the Free Market Royalty Act and contends that its passage could result in less music being aired. “This legislation would impose new costs on broadcasters that jeopardize the future of our free over-the-air services,” the group said.
Instead, the NAB is lobbying for the Local Radio Freedom Act, which would prevent Congress from applying new royalties or fees to broadcast services.
Performer royalties have been debated on Capitol Hill at least since 1978, when a report by the U.S. Copyright Office suggested a payment schedule should be established.
The current legislation, which is bottled up in committee, would not set a royalty rate but would instead allow royalty negotiations between broadcasters, artists and record labels.