“If you’re not at the table, you’re on the menu.”
That’s an oft-heard quote in political advocacy, but it aptly describes the fight that music creators are involved in over fair compensation for the use of their work. Broadcasters and content delivery companies regularly take advantage of outmoded intellectual property laws to unfairly exploit the assets of artists, producers and engineers.
But each of us can do something to help change the situation. In fact, now is the time to get involved because, frankly, you and your work are already on the menu.
It is with this in mind that I took part in this year’s Grammys on the Hill, the Recording Academy’s annual advocacy event in Washington, D.C., where the organization’s members descend en masse to educate their representatives about issues that greatly impact the lives of music creators. What makes this event special is that the majority of the attendees—musicians, engineers, producers, managers, studio owners—invested their own time and money getting to the nation’s capital to make their voices heard. (In the spirit of full disclosure, I am a Governor on the board of the Recording Academy’s San Francisco chapter, and I, too, covered my own expenses to the event.)
The Recording Academy’s message is clear: Music creators deserve fair market pay across all platforms, and to get there Congress must enact comprehensive licensing reform. After two years of congressional hearings by the House Judiciary Committee that scrutinized U.S. copyright law, as well as the recent release of the U.S. Copyright Office’s music licensing study, “Copyright and the Music Marketplace” (available online), the pieces are finally falling into place.
Our job on that sunny April day was to get our congressional representatives on board with the Fair Play Fair Pay Act (H.R. 1733), a piece of bi-partisan legislation that “harmonizes, rationalizes, and modernizes music licensing in a logical, comprehensive way, so that all music services play by the same rules and music creators receive fair market value for their work.” To do this, the bill addresses a number of inequities that currently exist.
To begin with, it would require terrestrial radio (AM and FM stations) to pay a performance royalty to artists and copyright owners of sound recordings at the same fair-market rate that Internet radio does, something that is commonplace throughout the rest of the world. One of the main benefits for musicians in enacting a performance royalty (and a major selling point to members of Congress) is reciprocity: Nearly all other countries collect performance royalties when they play U.S. recordings on their radio stations, though the royalties are never delivered because we do not reciprocate. The loss to artists and to the U.S. economy is estimated at $100 million per year.
The legislation would also remove the unfair advantage that terrestrial stations have over digital-only services when AM/FM stations deliver digital streams. The goal is to make sure that all of the delivery platforms—terrestrial, Internet, cable and satellite—abide by the same “willing buyer, willing seller” rate standard.
To counter claims by the National Association of Broadcasters and others that such a requirement would put small players out of business, the legislation includes provisions to protect local AM/FM stations that have annual revenue below $1 million from undue financial burden by capping yearly payments at $500. The proposed cap for public, college and other non-commercial stations is $100.
Another important aspect of H.R. 1733 is to enforce royalty payments for digital performances of recordings made before 1972. Pandora and SiriusXM have been exploiting a perceived loophole in federal law in order to play pre-’72 recordings without compensation. In an article in Billboard magazine, the CEO and President of SoundExchange, Michael Huppe, estimated that this cost labels and artists $60 million in royalties in 2013.
The final portion of the Fair Play Fair Pay Act is also a stand-alone, bi-partisan bill known as H.R. 1457, the Allocation for Music Producers Act (AMP Act). This bill would require SoundExchange to make direct payments of royalties to engineers and producers when instructed to do so by a featured artist. Although SoundExchange is already doing this on a voluntary basis, putting the practice into law would protect these payments in the future, as well as create a way for producers and engineers to seek permission from featured artists (or their heirs) to collect royalty payments they deserve for pre-1995 recordings. It is important to note that these payments do not reduce royalties due to other rights holders because they are based on an agreement between the featured artist and the producer or engineer.
The feedback we got after Grammys on the Hill is that Congress members enjoy hearing directly from their constituency, especially when it involves small business owners such as music creatives. When it comes to complex issues such as those in H.R. 1733, it’s important that our voices are heard in order to combat the paid lobbyists working to maintain the status quo.
The window of opportunity is open and the time to act is now upon us. Contact your Congressional representative and tell them to support your right to control and benefit financially from your work through licensing reform. Bring your voice to the table.