Senate Judiciary Committee Testimony Introduction Letter
Sent to members of the Senate Judiciary Committee in advance of August 4, 2009 testimony: “The Performance Rights Act and Parity among Music Delivery Platforms.”
Dear Senators,
On behalf of thousands of Internet radio stations and the services that deliver them to millions of listeners, the Digital Media Association (DiMA) is pleased to have a witness testifying at tomorrow’s Senate Judiciary Committee hearing regarding performance royalty parity across competing radio platforms.
Bob Kimball of RealNetworks will speak of the competitive disadvantage faced by the smallest radio platform, Internet radio, which pays the highest proportionate royalties to performers and recording labels. DiMA urges that S. 379 should address this disparity, and ensure fair competition among broadcast, satellite, cable and Internet radio by including a uniform royalty standard that applies to all radio services and all radio technologies.
When deciding what royalty standard to include in S. 379, DiMA suggests adopting a standard that for 33 years has consistently yielded reasonable royalties for creators without threatening the economic survival of licensees. That standard, found at 17 U.S.C. 801(b)(1), requires royalty-setters to consider four factors that carefully balance the interests of creators, technological and business innovators, and the public. In contrast, the three rate-setting proceedings using different standards have resulted in royalties so extremely high as to threaten the very existence of licensees – satellite television services and Internet radio services. In all three instances Congress intervened and enacted remedial legislation.
DiMA also urges the Committee to ensure that parity applies to all provisions in the bill. For example, S.379 caps the royalties of small broadcasters (those with revenue less than $1.25 million) at $5,000, but webcasters making that same amount of revenue are currently forced to pay $150,000. This unfairness can be easily remedied with a simple amendment.
If the Performance Rights Act achieves parity, the entire radio industry will continue to innovate and deliver new opportunities for thousands of artists and record companies. Fair competition will promote creativity, consumer value, and fair royalties.
Thank you for your consideration of DiMA’s views as you consider this important legislation.
Sincerely,
Executive Director