New bill could allow labels to pull music off US airwaves

Under new US Federal legislation introduced to Congress on Wednesday, record labels and rightsholders could choose to pluck their music off US airwaves, putting the perennial radio model into jeopardy.

The bill, titled PROMOTE (Performance Royalty Owners of Music Opportunity To Earn), was filed by US Reps. Darrell Issa, R-California, and Ted Deutch, D-Florida on behalf of artists and labels to rectify what they believe to be an inequitable system.

Over-the-air radio in the US is exempt from government regulation of music royalty payments to labels and artists (or whoever owns the master recordings) when radio plays those recordings.

In the same way that artists/labels are paid for exploitation on streaming services, copyright owners are pushing for similar treatment when their tracks are played on satellite radio services like Sirius XM or AM/FM radio.

If passed in Congress, PROMOTE may provide a workable solution that would allow artists who would otherwise be paid a performance right to “exercise the exclusive right to prohibit the broadcast transmission of the sound recording by a terrestrial radio station” if they feel they’re not being appropriately compensated.

While the label’s argument holds enough water to prompt legislative reform, broadcast companies claim there is substantial promotional value when they play an artist’s songs, talk about their upcoming album releases and plug nearby concert performances.

Furthermore, according to some experts, traditional radio is still the #1 form of music discovery in many genres – a largely unquantifiable yet highly beneficial perk for label’s pushing new music.

US stations – as well as their chief lobbying champion, the National Association of Broadcasters – claim yet another cost imposed on the radio stations will put further financial pressure on already struggling community stations.

Regardless of which side has the upper hand in the dispute, it is fair to say that America’s copyright system is struggling to keep up with an evolving music landscape and changing consumer behaviours.

Radio stations in the US currently pay license fees for performance rights only. TMN reported yesterday that in 2016, collection society ASCAP posted a record revenue of US$1.059 billion, distributing over $918 million to its 600,000 songwriter, composer and music publisher members.

Recently, six members of US Congress from both parties put the proposed Fair Play Fair Pay Act back on the agenda to create the performance royalty for terrestrial radio.

In Australia, both performance and recording licenses are paid by Australian radio stations to local industry bodies APRA/AMCOS and PPCA, who then distribute the fees accordingly.

The PROMOTE bill can be viewed in full here.