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Senate committee approve US radio royalty proposals
By CMU Editorial | Published on Friday 16 October 2009
Efforts to force terrestrial radio stations in the US to pay record labels royalties, like their counterparts do in most other Western markets, took another step forward yesterday.
As previously reported, for historic reasons, record companies don’t earn any royalties when radio stations play their music in the US. Songwriters and publishers do get a royalty, but those who own the recordings do not, mainly because the radio industry has long successfully argued that when they play a record they are providing free publicity to the label and artist.
That argument has proved less effective in recent years, however, as record labels start to increasingly rely on royalty revenue to compensate declining record sales income. Plus rival radio services who don’t enjoy the royalty-free provisions of US copyright law – including online and satellite radio services – have been rather vocal about how their AM and FM rivals have a rather unfair advantage costs wise.
A bill is working its way through US Congress in a bid to introduce recording royalties for US radio. Needless to say, the record industry think this is a swell idea, while radio firms are a lot less keen.
Before going to the two houses of Congress for a vote, the proposals need to be passed by two so called judiciary committees. The judiciary committee of the House Of Representtives have already approved the proposals, and this week their counterpart in the Senate did likewise. This means the proposed new laws can now go through the main chambers for a vote – although some tweaks are expected to be made to the proposals first.
Confirming his support for the new royalty, the chair of the Senate’s judiciary committee, Patrick Leahy, said: “When we listen to music, we are enjoying the intellectual property of two creative artists – the songwriter and the performer”. The latter, of course, is not currently paid a royalty.
The bill still has its opponents in Congress. Some say that smaller radio stations, already struggling in the recession, might be driven out of business by new royalty bills, or might opt to switch to an all-talk format to avoid paying them.
