Radio stations would pay for music under House bill

Radio stations may have to start paying musicians to play their songs.

Rep. Mel Watt (D-N.C.) introduced a bill Monday that would require radio broadcasters to negotiate with musicians for the rights to play their songs. Watt’s bill – which he called the free market solution – was applauded by members of the music industry and decried by broadcasters. 

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Currently, musicians are required to make their music available on all platforms – radio stations, satellite radio, Internet radio services, etc. – but can charge different royalties for each platform. 

Under the current rates – set by the Library of Congress’ Copyright Royalty Board – AM/FM radio stations pay nothing. Radio broadcasters say this is fair because radio stations play songs to large audiences, providing free promotion for the musicians.

Watt’s bill would do away with the compulsory license that requires musicians to make their work available. Instead, musicians and platforms – including AM/FM stations – would negotiate through SoundExchange, a performance royalty non-profit that facilitates those kinds of negotiations.

Platforms and musicians “are also free to negotiate separately alternative arrangements on top of those backstop terms,” Watt said in a statement.

“While Congress will establish a right, it will get out of the business of essentially establishing a price for that right,” Watt said. “The value of music will be determined by the market.”

The music industry praised Watt’s bill.

An RIAA spokesperson applauded Watt for his “commitment to addressing the antiquated laws and subsidies that favor traditional businesses and constrain today’s marketplace.”

Like other platforms, radio stations “should pay for the music that drives their business,” the spokesperson said. “It is time to redress these wrongs to ensure rights holders and those who create music are compensated fairly.”

Watt’s bill would put the U.S. on a level playing field with the rest of the world, according to Casey Rae, interim executive director of the Future of Music coalition, a musician advocacy group.

Because the U.S. does not have a performance royalty right for musicians when their songs are played on radio stations, “American artists are currently unable to collect royalties owed to them when their music is played abroad,” he said.

“There's no other export that the US would give away freely in the global marketplace, and it's high time that America joins the rest of the developed world in compensating artists for airplay.”

Though some radio broadcasters, such as Clear Channel, are working with record labels to reach licensing agreements on their own, Watt was critical of those agreements.

“What these deals really highlight is the uneven patchwork of rights that infects any effort to negotiate in the market as it stands today,” he said.

The bill's supporters echoed Watt’s criticism of the licensing deals.

“The biggest radio conglomerates like Clear Channel are touting private market deals, but these arrangements don't ensure fair compensation to artists, nor do they address the millions of dollars left on the table overseas,” Rae said.

Broadcasters continue to oppose legislation that would establish performance royalty fees for radio stations.

The National Association of Broadcasters said it “respectfully opposes” Watt’s bill and supports “market-based negotiations like the recent Warner Music-Clear Channel accord.”

Licensing agreements like Clear Channel's “demonstrate that this issue is already being addressed in the free market,” the group’s Executive Vice President of Communications Dennis Wharton said in a statement.

“This legislation would impose new costs on broadcasters that jeopardize the future of our free over-the-air service."