Musicians, broadcasters battle in Congress over radio royalties

Musicians, broadcasters battle in Congress over radio royalties
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Music artists are launching a lobbying assault on Capitol Hill in hopes of securing radio royalties, sparking fierce resistance from the broadcasting industry.

Last week, Reps. Ted DeutchTheodore (Ted) Eliot DeutchNew podcast pairs lawmakers with entertainment figures House Ethics panel reviewing Rep. Malinowski's stock trades Senate Intel chair vows 'tough but necessary questions' on Afghanistan collapse MORE (D-Fla.) and Darrell IssaDarrell Edward IssaHow lawmakers aided the Afghan evacuation Dozens of Sacramento students remain in Afghanistan after US pullout, district says Seven San Diego-area families evacuated from Afghanistan after summer trip abroad MORE (R-Calif.) introduced the American Music Fairness Act, which would require radio stations to pay artists if they play their songs.

MusicFIRST, a coalition of music creators and record labels, is lobbying lawmakers to support the bill. The group enlisted the help of former Rep. Joseph Crowley (D-N.Y.), a senior policy adviser at law and lobbying firm Squire Patton Boggs and a musician himself. 

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“AM/FM radio has been protected by law from paying the artists for the exploitation of their music and their work, and that needs to end. That doesn’t happen on YouTube, Spotify, Pandora, or any other way of streaming music,” Crowley, who was ousted by Rep. Alexandria Ocasio-CortezAlexandria Ocasio-CortezConservative group files ethics complaint over Ocasio-Cortez appearance at Met Gala If .5 trillion 'infrastructure' bill fails, it's bye-bye for an increasingly unpopular Biden The Hill's Morning Report - Presented by National Industries for the Blind - Schumer: Dem unity will happen eventually; Newsom prevails MORE (D-N.Y.) in a 2018 primary, told The Hill.

Under a century-old law, radio stations must pay songwriters to play their music but are not required to pay artists. In 2018, Congress passed a law clarifying that digital streaming services must pay artists royalties to play their music but excluded terrestrial radio stations.

Radio stations have long argued that radio is a promotional tool for artists to get their music out to new listeners for free, and artists often ask radio stations to play their songs. Crowley is combating that argument in meetings with lawmakers.

“The way people are exposed to music, now more than ever, is not through AM/FM radio but through streaming,” Crowley said. “So this promotional idea has lost so much more of its wind than it ever had before.”

During last week’s press conference, several musicians publicly spoke in favor of the effort, including Ken Casey of the Dropkick Murphys, Sam Moore of soul group Sam & Dave and R&B singer Dionne Warwick.

“It’s been a pleasure to tell those that didn’t know that we don’t get paid for recordings that are played on the radio,” Warwick told reporters. “I’ve been asked that question and when I say, ‘No, we don’t,’ they’d look at me like I had two heads. But they do know now what is the truth: that we are not paid.”

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The legislation faces a difficult path through Congress, where far more lawmakers are backing a bipartisan resolution from the National Association of Broadcasters (NAB) that states Congress will not “impose any new performance fee, tax, royalty, or other charge” on radio stations for broadcasting music over the airwaves.

The NAB on Monday announced it added 11 lawmakers to its Local Radio Freedom Act resolution, bringing the total number of House co-sponsors to 149. Eighteen senators have co-sponsored the bill. 

Gordon Smith, president and CEO of the broadcasting group, told The Hill that the resolution sends a “powerful message” to congressional leaders that lawmakers support radio stations in the lobbying battle.

Smith, a former GOP senator from Oregon, said many small stations have stuck with terrestrial radio rather than move to digital streaming, which would require them to pay royalties. He said imposing new royalties would put those stations out of business.

“They’re not printing money in the radio business anymore,” Smith said. “It’s a very slim profit margin and yet it’s a cornerstone of communications in every community in America.”

Smith said he is sympathetic toward music artists who have struggled as the industry’s business model shifted toward streaming and as the pandemic shut down live performances.

“It has really made life difficult for everybody on this issue,” he said. “But just because their economic architecture has changed, we don’t think that the solution to that is to destroy broadcast radio in this country.”

MusicFIRST says its legislation would protect local radio. Stations with revenue of under $100,000 per year would pay just $10 annually to play music. Noncommercial stations of all sizes would pay $100 per year. The bill is backed by the National Federation of Community Broadcasters, which is made up of local radio stations.

“We’ve done a good job reaching out to legislators and communicating that we are for protecting local and small radio operators,” Crowley said. “They’re not our focus. Our focus is these huge conglomerates that refuse to pay anything and yet make billions of dollars a year on the backs of struggling musicians.”

The largest radio companies, such as iHeartMedia, Cumulus Media and Townsquare Media, each own hundreds of radio stations across the country. Advocates note that radio stations in foreign countries also play American music without paying royalties, potentially depriving U.S. artists up to $200 million annually.

Smith said the NAB is interested in working out an agreement with record labels in which terrestrial radio stations agreed to pay royalties to recording artists in exchange for reduced royalties for streaming music.

“I always remind them that we’re open to do a deal,” Smith said. “But we can’t get them to talk to us.”

The debate pits music industry titans against each other. The NAB spent nearly $2 million on lobbying through the first three months of the year, according to OpenSecrets.org. The Recording Industry Association of America, a trade group representing record labels and a member of musicFIRST, spent around $1.2 million.

While the NAB’s resolution has far more support in Congress, recording artists are hopeful that key allies can advance their bill. The American Music Fairness Act has been referred to the House Judiciary Committee, where Rep. Jerrold NadlerJerrold (Jerry) Lewis NadlerAngelina Jolie spotted in Capitol meeting with senators House panel advances immigration language for reconciliation bill Hillicon Valley —Apple is not a monopoly, judge rules MORE (D-N.Y.), a co-sponsor of the bill, is chairman.

Nadler previously attempted to include royalties for terrestrial radio in a 2018 bill to modernize musical copyright rules, but lawmakers left the measure out following a lobbying push from broadcasters.