Anytime there is a royalty for the use of a sound recording in the U.S., the music creator is entitled to receive it, regardless of the creator’s nationality and their copyright laws back home. The same is not true around the world — but rights management agency SoundExchange is trying to change that.
SoundExchange today (June 24) launches Fair Trade of Music, an education and advocacy campaign to draw attention to this issue, alongside a coalition of music industry partners including the American Association of Independent Music (A2IM), American Federation of Musicians, Future of Music Coalition, Gospel Music Association, Music Artists Coalition, Music Managers Forum – U.S., Recording Academy, SAG-AFTRA and musicFIRST.
The campaign revolves around the trade principle of “full national treatment,” meaning that a nation “should provide foreign entities the same benefits and protections it would its own nationals,” the Fair Trade of Music site explains. When applied to music, this principle ensures that one set of laws in a country equally protects both domestic and foreign works and recordings, including the payment and collection of royalties.
While the U.S. treats all global music creators equally in the distribution of royalties, some other nations including the U.K. do not send royalties to Americans for the same uses of their sound recordings that nationals of these countries would receive.
As a result, SoundExchange — which collects and distributes performance royalties for non-interactive digital music streams — estimates that U.S. creators are globally losing out on roughly $330 million in royalties every year, particularly with respect to royalties for traditional broadcasts, public performances and some digital uses.
“Equal treatment is fundamental to international law, and this principle should extend to all music creators, no matter where they are from, who deserve to be paid fairly for their work,” SoundExchange president and CEO Michael Huppe says. “Our goal is to end discrimination in the global trade of music. That should be a priority for our entire industry, including recording artists and labels on both sides of the Atlantic and around the world.”
Over the past few months, SoundExchange has been working to shed light on this complex issue. In February, the agency asked the Office of the U.S. Trade Representative (USTR) to take action against six countries in particular which are large markets for the music industry, but deny full national treatment to American producers and performers: The U.K, France, Australia, Japan, the Netherlands and Canada. SoundExchange said that the countries were taking advantage of loopholes in the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), such as the fact that because public performances of sound recordings on streaming services and digital radio didn’t exist when TRIPS was written in the early ’90s, those recordings are not per se protected by TRIPS.
In April, the USTR responded by recognizing the need for universal full national treatment in the collection and distribution of royalties in its annual Special 301 Report review of intellectual property rights.
The recent United States-Mexico-Canada trade agreement, which goes into effect July 1, for the first time requires Canada to offer national treatment to American creators. SoundExchange is launching the Fair Trade of Music campaign now because it sees another shot at change in the ongoing negotiations between the U.S. and U.K. for a new, post-Brexit trade agreement. Last week, SoundExchange joined organizations like the RIAA and Music Artists Coalition in sending a joint letter urging U.S. Trade Representative Robert E. Lighthizer to make full national treatment for sound recordings a priority during those talks.
“We have a chance to get this right in the U.S.-U.K. negotiation — it’s one small provision that could make a massive difference for music creators who’ve always deserved equal treatment and now need it more than ever as many of their other revenue streams have disappeared,” says Future of Music Coalition director Kevin Erickson.
The fight for full national treatment is also related the lack of a terrestrial broadcast performance right in the U.S. — which SoundExchange has also spent years fighting to change, so that American AM/FM broadcasters would be required to pay royalties to the record industry.
Consider this: SoundExchange says that currently, if a British artist (who records music in the U.K.) and American artist (who records music in the U.S.) both get airplay for tracks on FM radio in the U.K., which has a broadcast performance right, only the British artist will receive a royalty for those spins. If the principle of full national treatment were applied, however, the American artist would be treated the same as the British artist, and would also be entitled to a royalty.
The Fair Trade of Music website is currently calling on creators to sign a petition in support of the cause, and will take steps to amplify artists’ and organizations’ voices during the U.S.-U.K. trade agreement negotiations.
“Music is universal, and at its best it inspires our best values, including equity, inclusion, and hope. We have an opportunity during the U.S.-U.K. trade agreement negotiations to right a wrong, fix an inequity, and give much needed remuneration to U.S. sound recording artists,” adds SAG-AFTRA chief deputy general counsel Jeffrey Bennet. “The music made by U.S. creators is loved around the world, and the artists who make that music deserve to be paid when it is played. Let’s get this right and get our music creators paid for U.K. radio airplay.”