Monday, May 18, 2009

The Performance Rights Act: A Big Win for Artists or A Record Label Bailout?

Last Wednesday the House Judiciary Committee passed the Performance Rights Act (H.R. 848), which would require radio stations to pay royalties to artists for playing their music, similar to how other platforms like satellite, cable, and Internet radio stations already do. Under current law, musicians receive zero income when their music is played on AM / FM radio.  


Essentially, this Act would close the exemption that the radio industry has enjoyed since the 1920's in which radio stations have not had to pay royalties to artists for their work.  Instead, radio stations have historically paid an agreed upon annual amount to copyright holders, leaving the performers in the dust while profiting off the airplay. 


This legislation could represent an important victory for artists if indeed the money being paid by radio stations ends up in their hands.  Rep. John Conyers (D-Mich.), who introduced the legislation, stated to the Detroit News

"The time is finally ripe for establishing some form of equity for recording artists, allowing them to be paid fair compensation for their creativity."  - Rep. John Conyers


While the premise of this legislation is a rather logical one - artists should be paid for their creativity and their work - questions still remain and opposition will certainly follow. Modifications have already been made to the bill to minimize the impact it will have on small broadcasters.  As of right now, stations with an annual gross revenue of less than $100,000 would pay $500 each year.  Those with revenues between $100,000 and $500,000 would pay $2,500.  Finally, those fortunate enough to have revenues between $500,000 and $1.25 million would pay a fee of $5,000 per year. Conyers has also requested the Government Accountability Office to conduct a study of the bill's potential overall impact on radio stations.  


It is also not clear how much artists will actually benefit if the bill comes to fruition. Will the artist receive compensation or will the money simply go to the record label? This obstacle, along with the potential impact facing radio stations will surely be debated in the coming weeks, however, this bill is likely to keep moving along as it appears that bi-partisan support is strong.  Recently, Rep. Marsha Blackburn (R-Tenn.) expressed her support on Air America and reminded listeners that the United States is one of the few industrialized countries that does not compensate artists and performers for airplay.  


While the full impact of this bill is yet to be seen, it may have already served the purpose of opening the eyes of many people that a glaring problem exists in our current radio format ... artists are not being paid ... at all.  The relationship between artists and radio stations may have been a mutually beneficial one in the past when radio stations could profit off of the airplay and artists could profit off of the exposure through record sales, however, that is the old formula.  Now, the evolving music industry must look at every possible avenue to find profitability, even if that means confronting your once closest friend. 


2 comments:

  1. Great post. Thanks for the information.

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  2. Is the fee paid according to revenue the total payment by commercial concerns? For example is that a fee per radio station. If I owned three stations with gross revenue over $500, would I pay a $15K annual fee?

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