Legislators Eye Performer Woes, Worry About Small Stations

Nearly every legislator who spoke at Wednesday’s House Judiciary Committee hearing on the American Music Fairness Act (HR-4130) appeared sympathetic to compensating performers for radio play of their songs, though many also emphasized protections for broadcasters. Many gave credence to both sides. The most aggressive questions went to NAB CEO Curtis LeGeyt. “The government has the responsibility to protect the property rights of its citizens,” Rep. Tom McClintock, R-Calif., told LeGeyt, noting broadcasters require compensation when their own content is used by others.

The regime wherein broadcasters pay royalties to songwriters, not singers, for radio plays was established a hundred years ago and the broadcast industry has grown around it, LeGeyt said. “AMFA would pull the rug out from under that” and be “financially untenable” for radio, he told lawmakers. LeGeyt said broadcast performer royalties should be part of a “holistic conversation” on all royalties radio stations pay. The streaming royalties paid by broadcasters are the only royalties that performers currently receive, so reducing them to pay broadcast royalties would run counter to the AMFA's goal, said Rep. Darrell Issa, R-Calif. “I am absolutely committed to making sure that artists have more money,” said LeGeyt. “If the current system isn’t doing that, let’s discuss the system.”

It's a positive sign the committee held a hearing on the matter, said SoundExchange President Michael Huppe in an interview. SoundExchange supports HR-4130. The music industry has battled on this issue for decades, but this time feels different, he said. “Almost everyone gave a nod to the problem,” said Huppe. “I was (pleasantly!) surprised by the degree of involvement from the committee; copyright fights are not usually the most riveting,” messaged Public Knowledge Senior Policy Counsel Meredith Rose. PK also supports AMFA.

Lawmakers expressed concern about HR-4130’s possible effects on smaller broadcasters and their participation in the emergency alert system. Radio “is facing an existential threat,” said Rep. David Cicilline, D-R.I. “I’m genuinely concerned about the survival of terrestrial radio,” said Rep. Mike Johnson, R-La. HR-4130 would impose royalties to be determined by a Copyright Royalty Board proceeding on broadcasters with over $1.5 million in annual revenue, while stations under that line would pay $500 a year or less.

LeGeyt said the 177 radio groups paying the CRB royalty rates would likely have to pay hundreds of thousands of dollars a year, and even $500 could impact smaller stations' resources. That money could be the determinative factor in a small station owner being able to send their children to summer camp, he said. Dave Pomeroy, American Federation of Musicians executive officer, responded: “Right now we have musicians who can’t feed their families; they’re not worried about summer camp.”

HR-4130 would also free up money in the form of royalties for international radio play, testified singer Gloria Estefan. The U.S. “is the only industrialized nation without a performance right,” she said. Because U.S. stations don’t pay international performers royalties, other countries don’t pay them to U.S. performers, she said. Since U.S. music is played all over the world, AMFA would unlock millions of dollars for artists, said Pomeroy.

“How do I navigate that we’re not protecting people’s property rights?” asked Rep. Tom Tiffany, R-Wis., before saying he worried musicians are “the camel with its nose under the tent” seeking to continuously look for more royalty payments. Cicilline said broadcasters need to be protected but said “it does seem a little unfair to shift the burden to musicians.”

LeGeyt repeatedly said NAB is open to serious negotiation with the music industry, but AMFA advocates said they're looking to congressional action. “I’m sure Mr. LeGeyt would like to live in the past. We’re keeping our focus on the present and the future,” said Joe Crowley, MusicFIRST Coalition chairman, in an interview. “Legislation is going to be necessary.” "Unfortunately, the AMFA takes a one-sided approach that would be wholly detrimental to local radio stations of all sizes," emailed LeGeyt. "We appreciate that in the last day the Local Radio Freedom Act, which opposes any new performance royalty on broadcast radio, gained two new cosponsors for a total of 234 in the House and Senate.”