For the last several years, the music business has been unified over one thing: SiriusXM and other digital-radio services must pay royalties for recordings made before 1972. So, record executives are thrilled about new bipartisan legislation, introduced in Congress late Wednesday, that would “provide federal protection to the digital audio transmission of a sound recording fixed before February 15, 1972.”
Mike Huppe, president of SoundExchange, said it would fix “broken, antiquated policy”; Cary Sherman, chairman of the Recording Industry Association of America, called it “the right thing to do”; the Supremes’ Mary Wilson, echoing singer-songwriter Melissa Etheridge and influential Stax guitarist Steve Cropper, said it was a “great step forward.”
SiriusXM, however, has not commented on the Compensating Legacy Artists for their Songs, Service & Important Contributions to Society Act, introduced by Reps. Darrell Issa (R-Calif.) and Jerrold Nadler (D-NY) under the acronym CLASSICS. The satellite-radio giant has fought in court to preserve federal copyright law, which, when established in 1972, did not give protections to songs made before then. (Some states do offer pre-1972 protections, which is why artists and labels have filed lawsuits over royalties in certain states.) Flo and Eddie of the Turtles have filed class-action lawsuits in various states over the unpaid royalties, with mixed success: A New York appeals court dismissed their case this year; Sirius had to pay $210 million to settle with the labels in an earlier decision; a Florida court ruled in Sirius’ favor in 2015 and the case is pending appeal.
Pandora, which has come around to the record industry’s side on the pre-1972 recordings in recent years, issued a statement supporting the new legislation: “It’s the independent musicians that this bill rightly protects,” Steve Bené, the company’s general counsel, said in part. But some in the record business have speculated that Pandora’s position might evolve, after SiriusXM invested $480 million to take a 16 percent stake in the service.
SiriusXM officials rarely comment on royalty issues, but David Frear, its chief financial officer, said in 2014: “I think everybody should get paid, and I think everybody should pay. But to get there, there needs to be a change in the laws.”
The CLASSICS Act will “orbit” around more comprehensive copyright legislation introduced by Issa and Nadler earlier this year, according to Huppe’s Billboard op-ed yesterday. The Fair Play Fair Pay Act, which would also force traditional FM and AM radio stations to pay more comprehensive royalties on recordings, has some bipartisan support, but the National Association of Broadcasters has heavily lobbied against it.
The acrimony over the pre-1972 recordings has increased in recent years, particularly between major labels and SiriusXM, a key promotional outlet for new and old music alike — the service recently launched a popular all-Beatles station. “We work together on multiple fronts, but they’re also dead set on paying the least possible they can for the rights to broadcast music,” says one major-label source. “The pre-’72 stuff is so important to their stations. But they even said, ‘If we lose [in various court proceedings], maybe we just won’t play any of that stuff.'”