Legislation Would Force Radio Stations To Pay Royalties

Major Blud writes: Congressman Jerrold Nadler (D-NY) and Marsha Blackburn (R-TN) introduced the "Fair Play Fair Pay Act" today that would end regulations that allow terrestrial radio stations to avoid paying royalties to artists and labels. Currently, AM/FM radio stations aren't required to pay royalties to publishers and songwriters. The proposed measure requires stations that earn less than $1 million a year in revenue to pay $500 annually. For nonprofit public, college and other non-commercial broadcasters, the fee would be $100 per year. Religious and talk stations would be exempt from any payments. Larger radio companies like iHeartMedia (858 stations in the U.S.) would have to pay more.

"The current system is antiquated and broken. It pits technologies against each other, and allows certain services to get away with paying little or nothing to artists. For decades, AM/FM radio has used whatever music it wants without paying a cent to the musicians, vocalists, and labels that created it. Satellite radio has paid below market royalties for the music it uses, growing into a multibillion dollar business on the back of an illogical 'grandfathered' royalty standard that is now almost two decades old," said Congressman Nadler.

Comments

ASCAP and BMI

[Sylak]

So what you're saying is my college radio didn't need to pay ASCAP and BMI?

Re:ASCAP and BMI

[mveloso]

Those are licenses, not royalties. If you want an example of how to make licensing so complicated that it's incomprehensible, read up on music licensing and royalties. Licensing to ASCAP/BMI is not a royalty - it's a license. I would think that BMI/ASCAP would pay royalties as part of the license fee, but it sounds like they don't.

Someone needs to come out with a diagram of how, what, and who gets paid in the music business.

Re:ASCAP and BMI

[dgatwood]

Those are licenses, not royalties.

You are technically correct—the best kind of correct.

Radio stations pay licensing fees to ASCAP and BMI, who in turn pay the composers and publishers proportionally based on the percentage of airplay (and concerts and other performances) that their songs received. They do not pay the artists or the record companies, so the article is correct in that regard. But yes, they most certainly do pay the composers and publishers, albeit indirectly. That's the whole reason those performance rights organizations exist.

There is a caveat, however. Not all radio stations are considered "reporting stations". I know our college radio station diligently logged our plays for reporting purposes, but when it comes to actual royalty payouts, those organizations use a random sampling of radio stations, rather than tallying every song on every station. If your music is played only on a small number of radio stations, there's a good chance you won't get paid because you won't show up in their sampling. Now over time, they're getting closer and closer to full reporting, so this is becoming less of a problem, but it is something to keep in mind.

In any case, I would say that the summary is just plain wrong. In effect, radio stations pay royalties (indirectly) to composers and publishers, but not to performers and record labels.

Re:ASCAP and BMI

[davester666]

I reject the very idea that the system could possibly be gamed for the general advantage of the major labels and their most popular bands.

Free advertising

[ShaunC]

For decades, AM/FM radio has used whatever music it wants without paying a cent to the musicians, vocalists, and labels that created it.

That's because radio is free advertising for the artists. Now they want the free advertising and to get paid for it, too? In decades past, the labels would bribe radio station PD's to get their music played; I wonder if they'd rather return to that model where it costs them money (and coke, and cars, and plane tickets) to get their artists some airtime?

Speaking of payola, it should come as no surprise that "TV/Movies/Music" are among the top 3 industries donating money to both Mr. Nadler and Ms. Blackburn.