Is Radio Boycotting Artists for Their Opinions?

Earlier this week, Billboard reported that MusicFIRST — a coalition of music industry and musician union groups pushing for a public performance right for terrestrial radio — has “asked the FCC to investigate whether radio stations have violated their public interest obligation by allegedly boycotting artists who support a performance royalty for terrestrial radio.”

Without naming stations or companies, the coalition, in a 17-page Request For Declaratory Ruling filed at the commission late June 9, accuses "some broadcasters" of using their broadcast licenses "to further their financial interest at the expense of the public interest" and to "distort an important matter of public debate."

That “important matter” is the Performance Rights Act – a bill that would compensate performing artists and sound copyright owners when their music is played on over-the-air broadcasts.

In case you’re new to this issue, here’s the quick scoop (more info is available in our handy PPR fact sheet): 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 Aretha Franklin’s classic version of "Respect" on the radio, the songwriter (in this case, Otis Redding's estate) and the publisher receive payment; the Queen of Soul (and her label) do not receive any performance royalties.

It’s important to note that when you hear the same song played on satellite radio, a webcast, or on a cable music station, Otis Redding’s estate and his publisher get their royalties from ASCAP/BMI/SESAC, and Aretha and record label are compensated via SoundExchange, the agency responsible for the collection and distribution of this digital royalty.

Although we’re not part of the MusicFIRST Coalition, FMC supports a Public Performance Right because it would directly compensate performers 45 percent of the royalties owed for the use of their music on over-the-air broadcasts. Additionally, the U.S. is one of the only industrialized nations without this right, which means American artists can't collect money owed to them for overseas spins of their music. This leaves millions on the table that would otherwise go to American performers.

Now, back to those boycott allegations. The MusicFIRST filing claims that some major broadcast group-owned stations notified a label that they were dropping a top-selling artist’s new single because that as-yet-unnamed artist had publicly voiced support of performance rights legislation. One station in Florida was singled out for allegedly telling a label it wouldn’t be adding any new music to rotation by an artist listed on the MusicFIRST website, and a Delaware station that dropped all artists associated with the coalition.

While we have no additional information regarding the veracity of these claims, we think that the FCC should take the filing seriously. Commercial broadcasters have a pretty big megaphone, and there are some examples in recent history showing that they can easily block otherwise popular artists from the airwaves. Remember when Cumulus and Cox Media instituted bans on playing Dixie Chicks’ songs on their stations after singer Natalie Maines made a statement about being “ashamed” that then-President Bush was from her home state of Texas? The First Amendment gives Maines the right to say that, and a private company (even one doing business on the public airwaves) has the right to not like it. But when this issue came up during a Senate Commerce hearing in 2003, Cumulus CEO Lew Dickey admitted that the decision to keep the Dixie Chicks off Cumulus' 50 country stations was made in the company's headquarters. The Dixie Chicks incident demonstrates that the massive consolidation in station ownership means that broadcasters can make national-level decisions about programming with potentially huge marketplace – or political – repercussions. And it can also have a chilling effect on speech.

The broadcasters’ heavy hand can also extend to musician compensation. Take, for example, the 2007 incident where Clear Channel attempted to force artists to waive their digital performance royalties (for the stations’ web streams of over-the-air content) as a consideration for airplay. FMC made a decent-sized fuss and ultimately — with the help of the American Association of Independent Music, who by the way, also support a performance right for terrestrial radio — Clear Channel ditched this onerous forced exemption.

Our point is that radio station group owners have demonstrated in the past that they the structural capacity to make programming decisions at the national level, so an artist-specific boycott is possible. We urge the FCC to follow up on these accusations and shed some light on the issue.

Public Performance Right Update

You may have already heard, but there's been some developments regarding the Public Performance Right for terrestrial radio. On May 11-12, a huge array of supporters of the Performance Right focused their attention on Congress. The goal: build up enough support in the House to pass HR 848, that would require broadcasters to compensate performing artists and sound copyright owners (usually the labels) for their work when played (or "performed") over-the-air.

The efforts appear to have had their intended effect: on May 13, the Performance Rights Act passed in the House Judiciary Committee. Last minute-tweaks to the legislation — presented by committee chair John Conyers (D-MI) and largely as a response to pressure from minority broadcasters — included delaying the bill's effective date, reducing the royalty payments due, and insuring that the needs of small, minority, religious and non-music broadcasters are taken into account.

While this is clearly good news for supporters of the Performance Right, there's a way to go before the royalty becomes a reality. The bill still needs to be voted on in the full House, and companion legislation must be passed in the Senate before it goes to President Obama for signature or veto (just like on "Schoolhouse Rock," remember?)

FMC supports a Public Performance Right for a number of reasons, mainly because it would directly compensate performers 45 percent of the royalties owed for the use of their music on over-the-air broadcasts. It's also important to note that the U.S. is one of the only industrialized nations without this right, which means American artists can't collect money owed to them for overseas spins of their music. If you need a refresher check out our Performance Right fact sheet.

And here's all the tagged posts on the issue from this very blog.

Performance Right Insights

If you're new to the whole concept of who gets paid when you hear a tune on terrestrial radio, here's the situation in a nutshell:

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 Aretha Franklin’s classic version of "Respect" on the radio, the songwriter (in this case, Otis Redding's estate) and the publisher receive payment; the Queen of Soul (and her label) do not receive any performance royalties. Check out our Public Performance Right fact sheet for more info.

Yet if you hear the same song played on satellite radio, a webcast, or on a cable music station, Otis Redding’s estate and his publisher get their royalties from ASCAP/BMI/SESAC, and Aretha and record label are compensated via SoundExchange. Why the difference? In 1995, Congress enacted the Digital Performance Right in Sound Recordings Act (DPRSA). This legislation created a new exclusive right to publicly “perform” copyrighted sound recordings via digital audio transmissions like webcasting. But this new right didn’t extend back to terrestrial broadcasts, allowing them to continue to broadcast performers’ work totally free of charge.

Now, you’ve likely heard a lot of talk about this issue in coming weeks as both sides of the debate try to make their respective cases to legislators. An array of artist and label groups have been organizing under the MusicFIRST Coalition umbrella to solidify Congressional support for the House and Senate versions of Performance Rights Acts bills. Meanwhile, the National Association of Broadcasters are once again getting vocal about their opposition to the public performance right for terrestrial radio.

We figured it would be a good time to remind our readers why this right is important to performing artists whose talents breathe life into the music you hear on the airwaves. First, let’s recognize that the United States’ position on this is an anomaly. Nearly every other industrialized nation compensates songwriters and performers for the over-air broadcast of their work — notable exceptions include Iran and North Korea. That’s not what you’d call great company.

Second, it's helpful to look at how this royalty would break down. The featured performing artist receives 45 percent of the total monies, which is paid directly to the artist — meaning it doesn't go to the record company to be held against debts incurred to the label (aka "recoupables.") 50 percent goes to the sound copyright owner (usually the label, but in some instances the artist). Finally, non-featured performers get the remaining 5 percent of the royalties, distributed through a fund administered by AFTRA and AFM. (Let’s hear it for the tambourine player!)

You'll hear a lot of hot air from the NAB about how the Performance Right is really just a scheme to fill the coffers of the RIAA — which is basically the commercial broadcasters trying to take advantage of the perceived unpopularity of this major label trade group. There are two giant flaws with this specious argument. In addition to the direct payment of 45 percent of royalties to performing artists, the Performance Right would also pay indie labels and artists, too, which represent over 80 percent of the music released in a given year, 30 percent of the retail sales and 15 to 25 percent of commercial airplay, according to a study released by FMC last week. This is why the American Association of Independent Music (and FMC) supports it.

Third: webcast stations and satellite radio pay a performance right, while terrestrial broadcasters do not. This is a competitive advantage that terrestrial broadcasters want to keep, particularly in the light of competition from other media. Yet webcasting startups have paid performance royalties to both songwriters and publishers, as well as performers and labels as a cost of doing business pretty much since the dawn of online broadcasting. So the question is, if webcasters — many of whom generate far less revenue than their terrestrial counterparts — pay a performance royalty to both songwriters and performers, why shouldn't regular radio?

FMC thinks that radio is an incredibly valuable public resource, which is why we support initiatives to expand and protect community radio, and try to point out ways in which commercial radio might repair some of the damage wrought by runaway consolidation in station ownership, which has led to homogenized playlists and a loss of local and regional identity. The other day, our "anonymous" commenter suggested that since we purport to support radio we shouldn't be pro-Performance Right. Well, we happen to believe that commercial broadcasters can be both fair to artists AND serve their local communities.

We should mention that this flurry of commenting came about because of our new study of what gets spun on radio called “Same Old Song: An Analysis of Radio Playlists in a Post FCC-Consent Decree World." This report essentially shows that indie labels still have limited access to commercial radio, even after the Federal Communications Commission issued consent decrees against the nation’s four largest radio station group owners – Clear Channel, CBS Radio, Citadel and Entercom – as a response to collected evidence and widespread allegations about payola influencing what gets played on the radio. You can check out the study and executive summary here.

In a recent blog post about the study, we heard from an "anonymous," who clearly wants to change the subject. He or she tosses out the old chestnut about how artists don’t need to be compensated for radio spins because these plays are “promotional.” This sounds a lot like the NAB soundbite that airplay increases album sales, which leads to compensation for performers and record labels. Yet, as our playlist analysis demonstrates, many commercial radio formats rely heavily on the “hits.” In the AAA Commercial format, FMC found that 49 percent of the 2008’s airplay was dedicated to songs that were released before 1999. In the AC format: 51 percent of the 2008 playlist was songs released before 1999. Urban AC: 56 percent. It’s difficult for the NAB to make the promotional argument when the majority of songs receiving spins are so well-worn. By sticking to the established hits, commercial radio isn’t promoting music — they’re just keeping people from switching the channel by sticking to the familiar.

So essentially, it’s the “same old song” for both commercial playlists, and the way they view the Performance Right. Isn’t it about time to expand the repertoire?

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.

Public Performance Right Hearing on the Hill

Yesterday (March 10, 2009), the House Judiciary Committee held a hearing on the Public Performance Right for Sound Recordings, which featured testimony from folks on all sides of the issue, including one bona fide rock star (no, President Obama didn’t stop by).

Billy Corgan of Smashing Pumpkins joined Mitch Bainwol (Chairman and CEO, RIAA), Paul Almeida (President, Department for Professional Employees, AFL-CIO), W. Lawrence Patrick (President, Patrick Communications), Stan Liebowitz, Ph.D. (Ashbel Smith Distinguished Professor of Managerial Economics, University of Texas at Dallas) and Steve Newbury (Chairman of the Radio Board, National Association of Broadcasters) to present their views on the Public Performance Right.

This Performance Right would pay performing artists and sound copyright owners for the use of their music on terrestrial radio. Here’s an example: if you hear Aretha Franklin’s version of "Respect" on U.S. radio, only the songwriter (Otis Redding) and the publisher receive payment; Aretha (and her label) are left out. Compare that with the situation in just about every other industrialized nation, where performing artists receive payment for the use of their work on over-the-air broadcasts.

FMC supports a Public Performance Right for terrestrial radio for a number of reasons — it would compensate deserving performing artists; it would establish a better balance between new services and traditional radio; it would create another revenue stream for copyright holders and performers, including the thousands of independent labels whose songs receive airplay every year. It would also enable U.S. artists to get paid when other countries broadcast their work. Millions of dollars of foreign performance royalties that could be distributed to US performers are currently left on the table – or go into other countries’ arts and culture coffers — because the US has no terrestrial performance right. For more information, you should check out our Public Performance Right fact sheet, and Ann Chaitovitz’s Op-Ed in Huffington Post.
This issue goes back to practically the dawn of radio. The broadcasters have long held that the airplay creates “promotional value,” which in turn drives record sales; therefore, they shouldn’t have to pay for using performers’ music. The debate has gotten even hotter in the digital era due to the fact that satellite radio, webcasters, and cable music stations pay the performer and recording copyright owner via SoundExchange, as well as paying the songwriter and publisher through ASCAP/BMI/SESAC.

Like the royalty breakdown for the digital Performance Right, the royalty breakdown for the terrestrial Performance Right goes like this: for non-interactive licenses, the featured performing artist receives 45 percent, the sound copyright owner (again, usually the label) gets 50 percent and the backing musicians and vocalists split the rest. This money does not come from the songwriter and publisher’s portion; it cannot be recouped and does not even go through the label.

It’s worth noting that Billy Corgan, who supports the Performance Right for terrestrial radio, is not only the featured performer, but also the songwriter and co-copyright owner for most of his band’s material. In his testimony, he was clear about how terrestrial radio benefited his own career, but didn’t mince words about what he sees as a skewed compensation structure. “From my perspective, this issue is one of fundamental fairness,” he said. “If the performance of a song has value to a particular terrestrial radio station in its airing, I believe it is only right to compensate those performers who have created this work. Simply put, if a station plays a song, both the author and the performer should be paid. These particular performances must have value to the stations or they wouldn’t be playing them.”

Steve Newbury, representing the National Association of Broadcasters — who have so far successfully beat back attempts to enact a performance right for radio — invoked poor market conditions and promotion for artists as reasons to keep things as they are. “Local radio stations provide new and emerging artists with needed exposure and access to a listening audience,” he said. “Record companies and their artists benefit not just from radio airplay, but also from on-air interviews and promotions of local concerts and new albums.” Yet one of the fastest growing segments of commercial radio is classic rock, which plays music that long ago passed its promotional “sell-by” date. There’s nothing saying that all music would even have to have the same rate — oldies formats might end up paying less then the stations that spin the latest cuts. The rate set for an artist’s debut might be lower than the rate for an established superstar.

It’s also interesting that whenever the Public Performance Right is discussed, the broadcasters bring up their supposed commitment to localism and diversity, which, in this era of hyper-consolidation and cookie-cutter playlists, smells a bit fishy.

As expected, the RIAA (and by extension, the major labels) took a bit of a bashing from both members of the Committee and those witnesses who are against the Performance Right. But it’s important to mention (as RIAA CEO Mitch Bainwol did in the question-answer period) that the big labels are only one segment of the industry — there are a lot of indies out there. The American Association of Independent Music — an indie label trade group — actively supports the enactment of a performance right, too.

The language in the House bill contains some notable improvements over the legislation introduced last year. First, it includes additional language to protect songwriters’ royalties and to ensure that these royalties cannot and will not reduce the amount of songwriter royalties. This is important, as songwriters depend on radio play as a major source of revenue.

It also closes an important loophole that the labels could have used to hurt performers. The current bill requires that terrestrial stations pay the designated collecting agent (probably SoundExchange) 50 percent of royalties due under any license granted by a copyright owner. The designated agent will then distribute the 50 percent directly to the artists. This provision prevents the labels from doing direct license deals with the broadcasters and collecting the artists’ portion. Unfortunately, this provision is limited to direct licensing of terrestrial stations and not internet, satellite and cable transmissions. We strongly support this provision but believe it should be expanded to include ALL direct licenses of music transmissions otherwise subject to the statutory license.

All in all, it was a fascinating hearing, even if it didn’t hint at any forthcoming compromises between factions. Head to the House Judiciary Committee site to see testimony from all the witnesses. You can also read a nicely balanced play-by-play at Coolfer.

FMC's Ann Chaitovitz on the Public Performance Right in Huffington Post

FMC Executive Director Ann Chaitovitz just published a piece in the Huffington Post about the need for the Public Performance Right on terrestrial radio.

If you've followed our work for a while, you'll probably be familiar with our support of this right, which would pay performing artists (and their labels) for the use of their music on over-the-air broadcasts. You can read our fact sheet on the Performance right here.)

In her article, Ann offers compelling moral and economic reasons for lifting radio's current exemption:

Just like all other types of U.S. copyrighted works, sound recordings should have a performance right. Entertainment is America's number one export, yet the U.S. stands alone in the industrialized world by not requiring radio stations to pay for the use of copyrighted sound recordings — putting us in such exalted company as North Korea, Iraq and Iran. Call it an axis of exploitation.

The new Congress should quickly redress this inequity. In this time of economic recession, it is especially important for the U.S. economy -- American artists and labels will not receive their share of foreign royalties until sound recordings have a performance right in the U.S.

She also points out the fact while webcasters and other online music services pay performing artists, commercial terrestrial radio does not, creating an inequity in the royalty environment that affords traditional broadcasters a market advantage. But it's really about the performing artists themselves. "The situation can have tragic consequences for older R&B and soul artists, American cultural icons who deserve and need compensation," Ann says.

Read the full piece here.

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 Sinéad 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.

Public performance royalty hearings continue in Senate

Last week, it was the Senate Judiciary Committee's turn to direct its attention to the debate about the public performance right for sound recordings.

A little primer: When you hear a song on regular 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.

However, if you hear the same song performed on XM or Sirius, or on a webcast, or on a cable music station, even on that very same terrestrial radio station's webcast -- the songwriter and publisher get their ACSAP/BMI/SESAC royalties AND the performer and record label are compensated via SoundExchange. You can read a lot more about the public performance royalty on our fact sheet.

This difference exists because US terrestrial broadcasters have been exempted from paying a public performance right for sound recordings for decades, despite the fact that this right exists in almost every other Western country. This exemption has withstood repeated criticism and advocacy for change, but the National Association of Broadcasters is a very powerful trade group that has been able to beat it back every time.

On Tuesday, Nov 11, the committee called up four witnesses: singer/songwriters Lyle Lovett and Alice Peacock, NAB Radio Board Vice Chairman Steven Newberry and noncommercial broadcaster Dan DeVany of WETA.

Lyle Lovett touched on the negative effect this exemption has on artist revenue. Most particularly, since the US is one of the only countries in the developed world where there is no performance royalty for sound recordings, there is no reciprocal agreement to collect US performers' share of royalties from performances in other countries. That means that when Lyle Lovett's songs are played in France, for example, a performance royalty is collected on his behalf, but there's no mechanism through which he can be paid. This anomaly has left millions of dollars on the table instead of in artists' pockets.

The rest of Tuesday's hearing was somewhat predictable, with Steven Newberry continuing to call it a "performance tax". But the NAB has also stepped up its attempt to discredit artists and record labels, suggesting that the record industry is just going after the broadcasters now because they need more revenue to improve their bottom lines. From the NAB's testimony:

"...the recording industry’s pursuit of a performance tax at this time appears to result in part from illegal peer-to-peer sharing of sound recordings, and in part from the loss of revenues from the sale of recorded music and an inability of record companies to timely adapt to rapid developments in digital technology and consumer demands. Broadcasters are not responsible for either one of these phenomena, and, particularly in the current highly competitive environment, it makes little sense to siphon revenues from broadcasters in order to prop up the recording industry’s failing business model."

Anyone who has been following this debate knows that this is not new. This is a right that recording artists (including Frank Sinatra) and the US Copyright Office have been advocating for for more than 30 years. Plus, it already exists on the non-radio digital platform. XM, Sirius, webcasting stations, cable stations -- even the webcasting version of these very same terrestrial stations that are arguing against this -- are already paying the digital performance royalty. What artists want is for Congress to move toward a system where all media platforms are operating under the same set of royalty responsibilities.

The NAB has also been employing a bit of verbal jujitsu, suggesting that if recording artists aren't as well off as they should be, then perhaps Congress should be looking at the contracted relationship between record labels and artists, instead of trying to get more money out of radio.

FMC will be one of the first to stand up and say that recording contracts have historically been unfair for musicians. In fact, we did a whole critique of these contracts that you can read here.

But that's beside the point in this debate. The NAB is tempting Congress to think that these royalties would be paid to the record labels for dispensation to their artists. That's not the way it works. Just like ASCAP/BMI/SESAC pay songwriters/composers/publishers directly, rather than relying on the publishers to pay the writers, recording artists are paid their 45% directly via SoundExchange. Non-featured artists get their 5% share directly from the AFM-AFTRA Intellectual Property Rights Distribution Fund. The money does not pass through the labels first. Recording artists are paid directly by SoundExchange.

Tuesday's hearing finished with Senators asking the witnesses to gather some "hard facts and numbers" and send them to the committee, so that it could act "equitably" in addressing the matter. FMC will continue to monitor and participate in the proceedings. Stay tuned....