A new bill could help artists and labels collect royalties on the digital performance of older recordings while adding to the royalty expenses of the digital services that play them.
Revealed Thursday, the RESPECT Act was introduced by Rep. John Conyers (D-MI), ranking member of the House Judiciary Committee, and co-sponsored by Rep. George Holding (R-NC) and several other members of the House. The bill would place pre-1972 sound recordings under federal law. Because the performance right for these older recordings currently falls under states' laws, digital music services such as Pandora and SiriusXM do not pay royalties on them. (These services do pay publishers for the performance of the compositions, however.)
Hundreds of millions of dollars are at stake. SoundExchange estimates lost pre-1972 royalties amounted to $60 million in 2013 alone. Yet on the surface, the matter is being framed as one of fairness to musicians from an earlier era of recorded music. In the press release announcing the bill, Conyers stated the bill would give "a fair shake" to legendary artists and their lesser-known backing musicians. SoundExchange President and CEO Mike Huppe tells Billboard pre-1972 royalties amount to "a real and urgent problem that's happening right now."
The bill's financial implications will draw some critics. A source that works on the digital music service side of the industry warns of possible financial implications for services faced with new costs associated with playing older songs. This person believes digital music services could have to stop playing pre-1972 recordings, which attract older listeners that are less attractive to advertisers, or cut down the amount of older songs it plays. "Maybe instead of having three stations for the '40s, '50s and '60s, they have one station."
The fact that the Respect Act is a single-purpose bill should help its cause. A standalone bill will have an easier time moving through Congress than a larger, multi-issue bill. Julia Massimino, VP of Global Public Policy at SoundExchange, isn't sure the bill will quickly move to the next step -- the markup phase where a bill's language is debated and rewritten -- but says the topic will be included in the House Judiciary's discussions next month on copyright and licensing issues. "It's up to the Chairman (Rep. Howard Coble) if it's going to move forward."
Additional reporting by Ed Christman