Royalties

The effort to secure enough supporters for a House resolution opposing the adoption of a performance royalty on broadcast radio airplay has hit a milestone. There are now 200 cosponsors to the resolution introduced last February by Rep. Cathy Castor (D-FL). The signature that brought the total to 200 was from Rep. Chrissy Houlahan (D-PA). Based on the current count of House members it would now take the support of an additional 16 members to effectively block any radio royalty bill.

The resolution has bipartisan support but the effort continues to have a greater number of Republican backers. The current tally includes 141 Republican House members compared to 59 Democrats, a gap made even more noteworthy by the fact that the Democrats have more members than the GOP.

Meanwhile in the Senate, a companion resolution introduced by Sen. John Barrasso (R-WY) has two dozen cosponsors, two-thirds of which are Republican members.

For the past decade, resolutions that ask lawmakers to publicly state their opposition to a performance royalty for AM/FM airplay have repeatedly proven to be successful for the industry in blocking the proposal from becoming enacted. The Local Radio Freedom Act explicitly recognizes the “mutually beneficial relationship” between local radio and the recording industry, including the “free publicity and promotion” that performers receive and use to sell records and concert tickets. It also says that changing the law to create a new performance right for AM/FM would lead to thousands of local radio stations suffering “severe economic hardship” if any new fee is imposed.

What’s different during the 116th Congress has been the lack of a bill introduced by supporters of adopting a right for music owners to collect royalties on radio airplay. Rep. Jerrold Nadler (D-NY) has been the lead sponsor of the performance royalty proposal during the past several sessions of Congress and he has yet to reintroduce his Fair Play, Fair Pay Act. Despite being in a better position to advance the bill as chairman of the Judiciary Committee, Nadler and his staff have been consumed by investigations of President Trump. That’s unlikely to change in the coming weeks as impeachment hearings get underway.

During a New York University speech this month Nadler signaled he was willing to remain on the sidelines as long as the National Association of Broadcasters and music industry-backed Music First Coalition remained in discussions about how to forge a compromise. “They’ve been negotiating,” Nadler said. “Although they haven’t come to an agreement, we’re still pushing those negotiations. But at some point I think we will get some version of [performance rights], because the NAB and their people will see that their interest is less adversely effected than it was previously, and that’s an ongoing process.”

From where NAB President Gordon Smith sits, the threat of the Dept. of Justice repealing the consent decrees governing how radio licenses music from ASCAP and BMI has become a bigger threat to the industry than performance royalties. “If there is not some architecture to replace how you license music, what could happen is truly the Wild West and chaos,” he said last month on the Inside Radio Podcast. Yet at the same time Smith continues to believe that a way for the radio industry to resolve the decades-old battle over a performance right would be to tie an agreement to pay for on-air plays with lower rates for streaming. And while informal discussions are ongoing, no breakthrough appears close at hand.

“There’s really nothing going on right now,” said Smith. “But there's nothing going on in terms of getting a terrestrial royalty passed either.”