Wednesday, March 18, 2009

The Public Performance Right--Which Side Are You On?

We don’t know about you, but last weeks House Judiciary Committee hearing on the Public Performance Right for Sound Recording is still very fresh on our minds. With support and opposition coming from all sides, the issue is very much at the forefront of music-biz discussions. Radio Ink recently published a roundtable Q&A with industry professionals who voiced their opinions about the public performance right for terrestrial radio – which would compensate performing artists and sound copyright owners (usually the label) for over-the-air plays of recorded music. FMC’s Ann Chaitovitz was a part of the conversation and offered some clear and valid reasons as to why the performance right is fair and should be supported:

Performing artists breathe life into the songs that we all love and want to hear, and they should be compensated when corporate radio uses their work to attract listeners to sell advertising. Just about every other country in the world pays the performance right.

The lack of a reciprocal right leaves millions on the table for American artists. The fact that satellite radio and webcasters already pay the rights but traditional radio doesn't gives an unfair advantage to terrestrial broadcasters. Music is popular, and will no doubt remain so. Right now, radio does pay when it broadcasts talk, sports, and syndicated programming — it is only sound recordings that are at a disadvantage.

The debate over a performance right for terrestrial broadcasting has been going on practically since the dawn of radio. Currently performance royalties are paid only to songwriters and composers through ASCAP, BMI and SESAC. But what about performing artists, whose signature talents help to attract listeners and advertising dollars? Consider that not paying a performance right puts us in the company of Iran, China and North Korea — countries not exactly known for their fair treatment of artists.

Broadcasters claim they will not be able to afford to pay a performance right, but the proposed legislation actually includes a rate cap. This means that small commercial and non-commercial stations shouldn’t be adversely affected. 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 — many would be exempt from paying anything.

Opponents of a performance right also argue that performing artists and record labels benefit from the “free promotion” of having their songs played on the air. But broadcasters pay talk talent, who use their radio shows to boost book sales and television viewership — should Sean Hannity not be paid because his radio program is likewise “promotional?”

Often, the big broadcasters try to make it seem like a performance right is just a ploy by the major labels to eke out more revenue for themselves. Well, a performance right for terrestrial radio would pay the performing artist 45 percent of the royalty directly — it wouldn’t go through the label at all. 50 percent would go to the owner of the sound copyright (which could be a major label, indie or even the artist themselves), and the remaining five percent would be split among the supporting players.

Some suggest that if a performance right were enacted, broadcasters would stop spinning tunes completely. As Ann counters in the Radio Ink piece, “As long as great artists that listeners want to hear create great sound recordings, broadcasters will keep programming music.” We just think they should pay something for the privilege.

We’ll continue to keep you posted on developments; in the meantime, you can check out our public performance right fact sheet for more info.

1 comment:

rebelcontent said...

"Well, a performance right for terrestrial radio would pay the performing artist 45 percent of the royalty directly — it wouldn’t go through the label at all."

But it will go through SoundExchange. Has there been improvement in the payout situation for long tail artists? Is SoundExchange being true to its charter as a non-profit?