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Judiciary Committee in US House Of Representatives approves radio royalty proposals

By Chris Cooke | Published on Thursday 8 December 2022

The Judiciary Committee of the US House Of Representatives yesterday approved the American Music Fairness Act, which would introduce a radio royalty for artists and record labels in America for the first time. The approval has been widely welcomed by the music community.

US copyright law is unusual in not granting sound recordings full performing rights, which means AM/FM radio stations do not need a licence from or to pay royalties to artists and labels. The record industry has been campaigning to get a radio royalty for years, with the latest proposals set out in this American Music Fairness Act.

The radio industry is a powerful lobby in Washington and is very opposed to those proposed reforms to US copyright law. It even has its own rival proposed legislation called the Local Radio Freedom Act, which is basically a non-proposal, in that it largely seeks to maintain the current system. The idea is that when a member of US Congress formally supports the Local Radio Freedom Act, they are by definition opposing the American Music Fairness Act.

The National Association Of Broadcasters remains confident that if the American Music Fairness Act goes to a full vote in the House Of Representatives it would be defeated, plus the proposals would need to get through the US Senate as well. Meanwhile, the current session of Congress is in its final phase following the recent elections, and it seems unlikely the American Music Fairness Act will be fast-tracked by attaching it to some must-pass legislation.

Nevertheless, for the music community, winning the approval of the House’s Judiciary Committee is still seen as a significant win in the bigger picture, very-long-running bid to get a radio royalty.

The Committee’s Chair Jerrold Nadler – already a supporter of the American Music Fairness Act – stated yesterday: “Imagine a profession in which you put in countless hours to create a product that is appreciated by millions of people, but while major companies can generate significant profits distributing your product, those companies pay you absolutely nothing for your efforts”.

“This may seem unthinkable”, he added, “but it is the reality for American recording artists and musicians when their music is played on AM/FM radio”.

Noting the criticisms of the act from the radio sector, he said: “Large broadcast corporations have criticised this bill, arguing that they should not have to pay a public performance royalty because their airplay provides promotional value to the artists and musicians”.

“Although these arguments are dubious”, he continued, “[the proposed new law] specifies that, when determining the royalty rate, the Copyright Royalty Board must base its decision on economic, competitive and programming information presented by all the parties – including information relevant to whether the radio station’s service in broadcasting the sound recording enhances the copyright owners’ and artists’ other streams of revenue”.

“The Judiciary Committee has also heard the concerns of local and public radio”, he noted. “They argue that they would suffer – and perhaps would have to close their doors – if they had to pay these public performance royalties”.

“Of course, we recognise the unique and vital services local and public radio stations provide to so many of our communities throughout the United States. That is why this legislation protects these small radio stations by excluding them from paying what the large broadcasting corporations would be required to pay”.

He concluded: “I want to thank our former colleague, Representative Ted Deutch – who recently ended his service in Congress – for introducing this legislation along with Representative Darrell Issa, who has also been a leader on this issue. As a long-time advocate for closing this unfair loophole that harms American artists, I am proud to join them in this effort, and I urge all members to support this bill”.

Welcoming the approval of the American Music Fairness Act by the Judiciary Committee yesterday, the boss of the US Recording Academy, Harvey Mason Jr, said: “Today’s passage of the American Music Fairness Act through the House Judiciary Committee marks an important step for this critical piece of legislation, and I am grateful to Chairman Nadler, Rep Issa, and members of the committee for supporting the music community’s right to fair pay”.

“It is vital to the health of our industry that creators are compensated for the use of their intellectual property on terrestrial radio”, he went on, “and the Recording Academy will continue to advocate for AMFA until this bill is signed into law”.

Meanwhile, the CEO of US record industry collecting society SoundExchange, Michael Huppe, added: “House Judiciary Committee approval of the American Music Fairness Act may not be the last step in this fight, but it’s an important one. Tens of thousands of music creators – our family, friends and neighbours – are counting on Congress to do the right them and help them get paid for their work. We cannot let them down”.

Needless to say, the National Association Of Broadcasters responded differently. Its CEO Curtis LeGeyt said: “NAB thanks the members of the House Judiciary Committee who voted against the AMFA today, and the more than 250 members of Congress – including a majority of the House Of Representatives – that support a resolution opposing this new performance royalty on local radio”.

“These lawmakers understand that AMFA will harm local broadcasters and audiences around the country, undermine our ability to serve their communities and ultimately fail artists by leading to less music airplay”, he went on. “Broadcasters urge the recording industry to join us in serious discussions instead of using the few legislative days left in the calendar to pursue divisive legislation that faces broad congressional opposition”.