Promoting Royalty Parity Among All Radio Technologies
Internet radio, satellite radio and cable radio services all pay sound recording performance royalties to recording artists and copyright owners, but the statutory standards that guide the Copyright Royalty Board (which decides royalty rates if the industries do not negotiate an agreement) are not the same for each technology – and are least favorable for Internet radio. As a result of the unfavorable legal standard Internet radio services generally pay very high royalties – as high as 70% of Pandora’s revenue – and cable and satellite radio services pay lower royalties, generally 6-15% of revenue.
DiMA Position
All music radio services compete against one another and so all should operate and pay royalties according to the same general set of rules. As Congress considers amending the Copyright Act to extend the sound recording performance right to broadcast radio (which is currently exempt from this right and royalty), Congress should also equalize the royalty rules for all radio services.
When setting a royalty standard for all platforms Congress has many options to choose from. DiMA favors adoption of the balanced royalty standard that has been in the Copyright Act since 1976, and is found at 17 U.S.C. 801(b)(1). This standard has been used successfully for several different industries’ royalties over several decades, and is proven to yield fair results.
Status
The Performance Rights Act has been introduced in the House of Representatives and in the Senate.
- In the House, H.R. 848 has been approved by the Judiciary Committee and is awaiting consideration by the full House. As amended by the Judiciary Committee, the bill (if enacted in its current form) would equalize the statutory royalty standard for all radio platforms, and the standard for all services would include 3 of the 4 components of the DiMA-favored 801(b)(1) standard.
- DiMA is also supporting additional amendments to provide to small webcasters the same favorable royalty treatment that this bill provides to small broadcasters.
- In the Senate, S. 379 has been introduced by Judiciary Committee Chairman Patrick Leahy but has not yet been discussed at a hearing.
Resources
2009 House Judiciary Committee Hearing: Performance Rights Act
2008 House Judiciary Committee Hearing: Performance Rights Act
2008 Senate Judiciary Committee Hearing: Performance Rights Act
Matt Nathanson (Artist) Testimony
Joe Kennedy (Pandora) Testimony
Bob Kimball (Real Networks) Testimony