NEW LAW WOULD REQUIRE RADIO TO PAY PERFORMANCE ROYALTY
Terrestrial radio may soon have to pay up… or risk shutting up. Federal legislation introduced Wednesday would require broadcast companies to pay a performance royalty to labels and artists in order to play their music. If broadcasters don’t comply, labels could simply pull their artists from those airwaves.
Under current copyright law, only music publishers and songwriters get paid when a song is played on the radio. But the Performance Royalty Owners of Music Opportunity To Earn Act (PROMOTE), filed by Reps. Ted Deutch, D-Florida and Darrell Issa, R-California, would require radio to compensate labels and artists as well.
If voted into law, the PROMOTE Act would give labels the option to allow airplay strictly for promotional use, or ask for a royalty.
"It should be the artist’s choice whether to offer their music for free in exchange for promotional play, or to instead opt out of the unpaid use of their music," Deutch said. "I am proud to join my colleague Rep. Issa in introducing the PROMOTE Act to give recording artists more control over their work.”
Broadcasters have long argued that the promotional value of playing songs and talking up artists trumps the need for monetary compensation. With the growth of Internet radio and streaming services–which both pay labels royalties for plays–the broadcast business is a lone holdout. Not surprisingly, the broadcast lobby has introduced a resolution (co-signed by members of Congress) opposing the royalty.
Yet for most of the biz, the PROMOTE Act is long overdue. “The PROMOTE Act is a positive step forward in the effort to reform a broken and unfair system,” said SoundExchange President and CEO Michael Huppe. “On behalf of the 130,000 artists and rights owners we represent, we thank Rep. Issa and Rep. Ted Deutch for supporting the right of America’s creators to be paid when their recordings are used by the $17 billion radio industry. We will persist in our efforts to meaningfully engage with the radio industry to find a solution to this glaring inequity under U.S. law.”
