As lawmakers are slowing building toward what could end up being a broad overhaul of music royalty structures, stakeholders — musicians, songwriter, publishers, Internet radio companies and terrestrial broadcasters — are all trying to make sure they don’t end up losing out, writes CQ Roll Call’s Rob Margetta.
In a story (subscription) this morning , Margetta lays out the policy debates surrounding a couple of specific issues, like the question of whether terrestrial radio stations should pay royalties to artists.
“Probably the most controversial question at stake is whether lawmakers will end the decades-long practice of allowing AM and FM terrestrial radio stations to broadcast music without paying royalties to artists,” Margetta writes.
Artists’ groups and the recording industry argue that terrestrial radio stations are unfairly making money off of work they don’t pay for while the National Association of Broadcasters and others contend that their members can’t afford to pay for content they’ve traditionally used without paying those additional costs, Margetta writes.
Here’s some background: terrestrial radio stations pay royalties for the type of copyright that covers composers, songwriters or publishers, but they’ve long been exempted from paying for the second type of copyright typically attached to recorded songs – sound recording rights covering a specific version of a song by an artist. Margetta writes that before the Internet music revolution, that exemption was thought to be both a standard course of business and justified since songs played over the radio was thought to be advertisement for albums:
“The resulting popularity of radio has significantly contributed to a U.S. recording industry that is the envy of the world, both in terms of size and scope,” said Charles Warfield, joint board chairman for the National Association of Broadcasters, during an appearance before lawmakers this summer.
Now, however, artists and the groups that represent them say that free play for terrestrial radio doesn’t make sense. Foreign countries require terrestrial radio to pay royalties, but American copyright holders usually can’t access them because U.S. stations won’t reciprocate. And newer forms of radio, including cable, satellite and Internet stations, are required to pay royalties to artists. That last point, especially, gives lawmakers pause. Some lawmakers think the current system discourages new business and innovation.
Margetta adds: “Some lawmakers have expressed sympathy toward broadcasters, even as they’ve acknowledged there’s a discrepancy that Congress may address.”