Friday, May 16, 2008

Who's Wrong on the Performance Right

FMC has spent a goodly amount of time supporting the creation of a public performance right for sound recordings, which would require terrestrial radio broadcasters to pay performers and labels for the recordings they play. It's been a while since we addressed the issue, so allow us to recap.

Currently, when you hear a song on over-the-air broadcast radio in the US, the composer/songwriter/publisher are compensated for that "public performance" via ASCAP/BMI/SESAC, but the performer and record label are not. Meaning, if you hear SinĂ©ad O’Connor’s version of "Nothing Compares 2 U" on the radio, only the songwriter (Prince) and the publisher receive payment; Sinead (and her label) are left out.

However, if you hear the same song played on satellite radio, a webcast, or on a cable music station, the songwriter and publisher get their royalties from ASCAP/BMI/SESAC, and the performer and record label are compensated via SoundExchange. (This is also true for a terrestrial broadcaster's internet stream.) Read our public performance right fact sheet for more info.

In December 2007, the Performance Rights Act of 2007 was introduced in the House and Senate, which would remove the performance right exemption for over-the-air broadcasters. Click here to read Senator Patrick Leahy's (D-VT) statement on the Performance Rights Act.

The National Association of Broadcasters strongly opposes the bill, as they have all attempts to get performance rights legislation passed by Congress. They pushed hard for opposing legislation, which took the form of the Local Radio Freedom Act that was introduced in the House of Representatives at the end of 2007.

On Monday, May 12, Senators Blanche Lincoln (D-AR) and Roger Wicker (R-MS) introduced Senate Concurrent Resolution 82, a companion piece to the Local Radio Freedom Act. It's filled with much of the same misleading language as its predecessor.

The NAB-supported resolution states that "many thousands of local radio stations will suffer severe economic hardship if any new performance fee is imposed, as will many other small businesses that play music including bars, restaurants, retail establishments, sports and other entertainment venues, shopping centers, and transportation facilities."

Actually, the Performance Rights Act doesn't apply to retail establishments, bars or otherwise. The bill is specifically written to only address the exemption that over-the-air broadcasters currently enjoy. It also recognizes that not all radio stations have the same ability to pay. If a station makes less than $1.25 million in revenues in a year, it will pay a maximum fee of $ 5,000. And any public broadcasting entity, religious broadcaster or noncom educational station would pay a maximum of $1,000 per year.

FMC champions compensation for songwriters and performers, which is why we think that the public performance right is a good idea. We also think license parity is essential. If webcasters — many of whom have far less funding than their terrestrial counterparts — pay a performance royalty to both songwriters and performers, why shouldn't regular radio? Why should performers who are heavily associated with certain songs be left out of the compensation loop? These questions deserve to be answered in the fairest way possible.

Word on K Street is that there may be one more hearing about this issue before Congress goes out for summer recess (then gets swept up by election fever). We’ll keep you posted.

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