Royalties

For more than a decade, broadcasters have rallied allies in Congress to proactively take a stand against a performance right on over-the-air use of music. It is a strategy that has consistently proven successful and, unsurprisingly, has again begun to play out in Washington. Senator Martin Heinrich (D-NM) has introduced the Local Freedom Radio Act, with seven co-sponsors already signed on to what is not a law per se but rather a nonbinding resolution opposing adoption of a bill that would create a performance fee, tax, royalty, or other charge on broadcasters.

The language of the Local Radio Freedom Act mirrors the previous version by explicitly recognizing the “mutually beneficial relationship” between local radio and the recording industry, including the “free publicity and promotion” that performers receive and use to sell music 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. And rather than shy away from the fact that the resolution is not a new idea, it embraces its legacy. “For nearly a century, Congress has rejected repeated calls by the recording industry to impose a performance fee on local radio stations for simply playing music on the radio,” it says.

The resolution was signed by a majority of House members during the previous congressional session to effectively block any bill pushed by the music industry to create a radio royalty. It also had backing of more than two dozen Senators. Among those senators that have added their name to the resolution so far are Senators John Barrasso (R-WY), Maggie Hassan (D-NH), Jon Tester (D-MT), Steve Daines (R-MT), Jeanne Shaheen (D-NH), Joni Ernst (R-IA) and Mike Crapo (R-ID).

No companion resolution has been introduced in the House, but one is expected in the coming days.

Typically, supporters in the House line up dozens of lawmakers before filing their version.

The resolutions may seem defensive in nature, but it has become an effective tool for the broadcast industry. For the past several sessions of Congress, it has dropped before any legislation proposing a radio royalty has even been filed. Rep. Jerrold Nadler (D-NY) and Senator Marsha Blackburn (R-TN) did not introduce their Ask Musicians for Music Act, or AM-FM Act, until November 2019, months after broadcasters had already been lobbying members of Congress to take a stand against the idea. By the time a majority was secured last July, both the House and Senate versions of the AM-FM Act had failed to secure any cosponsors.

It is not yet clear whether Nadler and Blackburn will reintroduce the AM-FM Act in the current session. Nadler remains in charge of the pivotal House Judiciary Committee, and one radio lobbyist expects he will try again. “He’s going to push, I don’t see why he would not,” they said.

Meanwhile, the National Association of Broadcasters has repeatedly said it is open to working out a compromise to the royalty standoff. But those informal discussions have so far not produced any deal. Under NAB President Gordon Smith, for the past three years radio has held discussions with the music industry as it tried to work out a compromise to a royalty conundrum that has existed for decades.

The conversations have, however, convinced some members of Congress to maintain a hands-off approach, hoping the radio and music industries could work out a solution without legislative intervention.