Unlike most countries, terrestrial radio in the U.S. is not required to pay a performance royalty on the music it plays, a situation that the creator community has long railed against, and the commercial radio community has long worked to protect. Below, recording artist-actor Common and SoundExchange President/CEO Michael Huppe weigh in on the situation. Variety welcomes responsible commentary — contact firstname.lastname@example.org with submissions.
As Civil Rights icon and actor-singer Paul Robeson once said, “Artists are the gatekeepers of truth. We are civilization’s radical voice.” Artists are society’s moral compass and it is our moral obligation to provide them with fair and just payment for their original creations.
One year ago this week, Congress unanimously passed the Music Modernization Act (MMA), legislation that repaired many long-standing inequities in U.S. copyright law. The core purpose of the law was reinforcing a fundamental principle: Music creators have the right to be paid fairly — at fair market rates — for the use of their work, wherever it is played. That might not sound revolutionary. After all, the right to reap the “fruits of one’s labor” is a firmly held American value. Inventors, entrepreneurs, and workers of all kinds enjoy protections under our laws to ensure their right to be paid fairly for their work.
So why not music creators?
The MMA addressed some of this. It did away with a patchwork of special deals, grandfathered rules, and politically-driven discounts that had worked their way into our laws over the past century at the behest of digital music services. But the MMA didn’t fix everything. The radio broadcasters managed to preserve their special, antiquated exemption allowing them to “play but not pay” artists — a special exemption that makes a mockery of the concept of fair pay for one’s work.
To make it plain: The biggest and most profitable music platform in America — FM radio — with more than 200 million listeners and $17 billion in annual revenue, pays nothing to the people who record the music that is the lifeblood of their business. It never has — not a penny.
If that’s not bad enough, because U.S. radio broadcasters don’t pay a performance royalty to artists, American artists are also stiffed abroad, even in countries where royalties are collected for radio airplay. That results in American creators collectively losing out on close to $200 million in royalties every year.
Why? How is radio able to take advantage of artists when no other group of American workers is forced to give over their work for free this way, subsidizing for-profit corporations who make billions from it? Because there is nothing in U.S. law giving artists the right to demand payment for the use of their work by AM/FM radio. There are also some pretty strong forces who want to keep it that way.
Radio, led by their trade association, the National Association of Broadcasters (NAB), claims they “pay” artists in other ways, like free “promotion” of their work. Maybe this was the quid pro quo of years gone by. But when was the last time you heard a song on AM/FM radio and went to a record store to buy the album?
In today’s digital economy, 75% of U.S. recording revenue derives from streaming. The law, the marketplace and simple morality demand that digital platforms must share some of that value with creators. Why should radio be any different? It is, after all, the music that draws their audience.
There have been previous attempts to remedy this injustice and Congressional leaders have asked the music industry to try to negotiate an agreement with FM broadcasters more than once. But it’s not hard to imagine how long a negotiation lasts when radio broadcasters can walk away from the table and continue to pay nothing for their staple input. With no actual property right granted to creators, they have very little leverage to bargain over.
This is the unfinished business after last year’s passage of the Music Modernization Act. It is an enduring injustice committed by the biggest radio broadcasters in the world against American music creators. It’s been going on so long that the first artist we know of to ask Congress for a reprieve was Frank Sinatra.
We can right this wrong with the simple act of giving music creators a property right in their own work. No one can call our copyright laws “modernized” until FM radio is held to the same standard as the music services it competes with on the dashboard and in American homes — the ones who pay artists. This is the longest standing inequity in our copyright laws, and it’s time to get real about solving it.
If Congress expects meaningful negotiations to happen between broadcasters and the people who make the music their businesses rely on, we first need legislation that requires FM radio to get permission from music copyright owners before broadcasting their music over the air.
Having that performance right for sound recordings would set the table for real marketplace negotiations. In an ironic twist, this requirement for consent is precisely what broadcasters have asked Congress to do in the context of licensing their TV content for re-transmission over satellite TV platforms. Radio broadcasts should be no different.
Creators should receive fair market rates for the use of their work. And Congress should do all that it can to help make that happen, including dragging FM radio — kicking and screaming — into the modern environment that applies to all other platforms.
Now is the time to take action. We must come together and call upon Congress to right these wrongs. Whether you’re an artist, a senator, or a construction worker, we all deserve to be paid properly and fairly for our hard work. That’s how we’ll protect this generation of artists, and the next.