Radio Royalties Battle Lines Being Drawn (Once Again) With New Congress

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The U.S. Capitol Building in Washington, DC. 

A fight over radio royalties dating back to Frank Sinatra once again begins anew.

With the new 115th Congressional Session underway since Jan. 3, the National Association of Broadcasters got a head start in launching its biennial resolution opposing paying royalties to record labels and artists performers.

So far, according to the NAB, 115 members of Congress have signed the non-binding resolution, dubbed the Local Radio Freedom Act, which is sponsored by Reps. Michael Conaway (R-TX) and Gene Green while a companion resolution has been launched in the Senate  Sens. John Barrasso (R-WY) and Heidi Heitkamp (D-ND).

Two years ago for the 114th Congress, the NAB didn’t get their resolution launched and signed until February, 2015. Ultimately, that year’s version of the resolution wound up with 234 signatures in the House, after launching with 94 co-sponsors. The Senate companion resolution garnered 27 signatures, according to the NAB.

Its the same old dance because they know a new bill is coming,” says an executive from the record label camp. “They work to line up co-sponsors of meaningless resolutions, and we work to introduce bill again with co-sponsors; its been the same dance for the last three terms of Congress.”

Record labels and artists, led by Frank Sinatra back then, have been trying since the 1940’s and the 1950’s to get radio to pay for playing records since radio has built an industry on the backs of music and today generates about $16 billion a year in advertising. Radio, however, thus far has successfully resisted every effort by the labels to extract royalty payments. So far, legislation that would require radio to play royalties has never come to the floor to be voted on by the full Congress.

In response to the non-binding resolution, the Recording Academy released a guide in four languages, English, Persian, Korean and Chinese, to remind members of Congress that besides the United States, Iran, North Korea and China are among the few nations that do not have a performance right on radio.

In a statement, the Recording Academy said it “will continue to support real legislative efforts in the 115th Congress to ensure that all creators are compensated fairly when their music is played on the radio.”

Likewise the MusicFirst coalition also issued a statement, noting that radio is “rolling out the exact same non-binding resolution, defending the same government subsidy they have been protecting for decades. Crony capitalism and big government subsidies seem to be on their way out, but Big Radio is asking Congress to once again protect it from the free market – a free market where every other music platform compensates artists for the music that drives their business. The musicFIRST coalition believes that Congress will see this resolution for what it is – a P.R. play by Big Radio – and instead tackle the injustices affecting our nation’s music creators.”

This year, in addition to radio legislation, the music industry is hoping that the copyright review process that is now two years old will finally result in copyright overhaul that would modernize the laws for digital age. If that happens, the radio royalty issue could be addressed there, instead of separate, stand-alone legislation.

What may be different down the road is what Chairman Goodlatte does with copyright review process and what individual areas of copyright law he puts on the table for legislation,” says the executive in the record label camp. “He started with Copyright Office reform in December and will move onto new issues (timetable unclear).

But another thing different this time, there is a new administration in Washington and some are hoping that President Trump will be an ally in helping songwriters and artists get fair payment in the digital environment.

“A new Trump Administration focused on American competitiveness and draining the swamp will find a great target in eliminating Big Radio’s decades-old subsidy,” the musicFIRST statement continues. :This combined with momentum on copyright reform and performance rights for music creators in Congress, creates a historic opportunity during the 115th Congress for the U.S. to finally update our copyright laws to treat music creators the same regardless of how consumers choose to listen to their work. It’s time for the U.S. to join every other industrialized nation and make Big Radio operate in a free market like all their competitors.  Most importantly, it is finally time that America’s talented artists and musicians are rewarded for their work.”

Radio, however, will likely align with the big digital companies who have been playing up to President Trump—in December the CEOs of Google, Apple and Amazon among others met with then president elect Trump in a highly-publicized meeting—while many in the music industry have been denouncing his presidency, with many artists turning down the opportunity to play for the inauguration; and songwriters and publishers calling him out for using his music during his run up to the presidency.

Some music industry executives bemoan that public stance, saying the industry is shooting itself in the foot and may have already lost the administration as an ally that is needed in the process of copyright revision as well as  getting the Department of Justice to back off its hardline stance on the consent decrees that ASCAP and BMI operate under.