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SoundExchange reckons US performers are being treated unfairly with international ER payments

By | Published on Tuesday 11 February 2020


SoundExchange – the collecting society for American record labels and recording artists – last week made a submission to the office of the US Trade Representative airing grievances over the policies of six other countries regarding the payment of performing right royalties to the American music community whenever their recordings are broadcast or played. Those countries were the UK, Australia, Canada, France, Japan and the Netherlands.

Regarding the UK, SoundExchange stated: “American performers are denied full national treatment in the UK. They are only paid for certain digital streaming services but denied traditional broadcast and public performance royalties (eg uses in bars and restaurants), unless their recordings were made in the UK or other [qualifying] territories”.

The performing rights in sound recordings are commonly exploited by radio stations, TV channels and public spaces that play recorded music. In most countries, those users of music need to get a licence from the record industry, and pay royalties to all the relevant copyright owners and – usually – also to the performers who appear on the recordings. The issuing of said licences and the collection of those royalties is usually handled by a collecting society.

The record industry has separate collecting societies in each country, of course. Those societies generally only issue licences in their home markets. All the collecting societies around the world are then joined up through reciprocal agreements.

So if a label or performer only wants to directly join their local collecting society, they can still be part of all the other blanket licences issued by societies elsewhere in the world, earning royalties whenever their recordings are broadcast or played in other countries.

This set up means that rights and royalties constantly flow around the network of collecting societies across the globe. Except, there are some copyright law complications.

For example, in the US, there isn’t a general performing right as part of the sound recording copyright, only a digital performance right. Which means that SoundExchange – as the US collecting society – only collects money from online and satellite radio services, not AM/FM radio stations or the pubs, clubs, bars and cafes that play recorded music.

Therefore there is no general performing rights income in the US for non-American labels and performers to share in. So, should American labels and performers be able to share in the performing rights income that is generated under copyright law in other countries?

Quite how this all works depends on various global treaties and how individual countries have chosen to interpret them. The situation may also be different for the copyright owner (usually a label) and the performer, as it is regarding the use of American music in the UK.

SoundExchange’s letter explained: “[UK law] … provides producers of sound recordings [ie the copyright owner] with exclusive broadcast rights and a right of communication to the public (eg a right of public performance) for their sound recordings. The exclusive right applies to American producers as well, so they enjoy full national treatment, equivalent to their British producer counterparts. But, performers are treated differently”.

Basically, under UK copyright rules, whether non-British performers are due so called equitable remuneration when their recordings are broadcast and played in public over here depends on their nationality and where a recording was made. And whether their home country, or the county where the track was recorded, offers British performers equitable remuneration when their music is broadcast or played there.

This is often referred to as “reciprocity” or the “mirror test”. It means that, if a non-British performer comes from a country where performer ER is not paid – and the recording was likewise made in such a country – then there’s a high chance that non-British performer isn’t due payment when their tracks are broadcast or played here. So, even if they are fully plugged into the collective licensing system, they aren’t due payment, so they won’t see any money.

With American performers who appear on tracks recorded in America, the UK system would basically provide them equitable remuneration only in the scenarios where the US copyright system would pay monies back to British performers, ie from digital and satellite radio. This means that UK collecting society PPL – which has to work out and implement British rules – won’t pay equitable remuneration over to SoundExchange for American performers on American records when they are played on AM/FM radio or in public.

So that’s all rather complicated isn’t it? But, basically, SoundExchange reckons that the UK has set it all up wrong and is therefore not compliant with its international agreements.

It concludes: “American performers are not paid at all for broadcasts or other public performances, with the exception of payments for recordings first fixed in the UK or another [qualifying] country. UK performers and producers … are paid for these uses. The withholding of payments for traditional broadcast and public performances from most American performers is a denial of full national treatment”.

Of course, SoundExchange is also involved in the never-ending campaign to try to get US copyright law changed so that American AM/FM broadcasters would have to pay royalties to the record industry – ie labels and artists. If that campaign was ever successful, then that would unlock some new UK payments for American performers.

However, that campaign has mainly been focused on AM/FM radio, rather than pubs/clubs/bars/cafes, which means that – even if US Congress did put an AM/FM royalty into law for sound recordings – there would still be some limitations on what Performer ER American performers are due from their American recordings when played here in the UK.

You can read SoundExchange’s full letter and all its other grievances here.