Music policy reform remains an ongoing priority for artists and creators' advocates nationwide who believe that proposed legislation could build a better and fairer music economy by addressing several glaring loopholes and imbalances in existing law.
When seeking to identify the fair market value for a given product or service – in this case, the broadcast of recorded music – we target the point of intersection of buyer preference and seller preference. We call this the willing buyer/willing seller standard: where the amount that an educated, un-coerced buyer is willing to pay intersects with the amount that an educated, un-coerced seller is willing to accept. Seems simple enough, right?
"How we listen to music doesn’t change the way we appreciate a song, but for some reason, our laws have different rules for different platforms."
Unfortunately, there are still unclosed loopholes and antiquated convolutions in music law that allow exemptions for some platforms in the both the terrestrial radio and the digital broadcast space from holding to the compensation standards that creators should be able to expect across the board in a sustainable industry ecosystem. There is a lack of platform parity amongst our broadcasters and digital services.
As the musicFirst Coalition points out in its issues documents, "How we listen to music doesn’t change the way we appreciate a song, but for some reason, our laws have different rules for different platforms." Current music law reflects a system where the government, not the market, picks the winners and losers in the broadcast space.
Thanks to a sweetheart deal struck decades ago between lobbyists for terrestrial radio and Congress, the U.S. has no provision for performers' compensation with respect to AM/FM broadcast – that means that when you hear your favorite song on terrestrial radio, your favorite artist isn't seeing a single penny in royalties for that broadcast. Meanwhile, although certain digital services like satellite radio (e.g. SiriusXM), cable radio (e.g. MusicChoice) and background/elevator music (e.g. Muzak) are compelled to pay artist royalties due to the digital nature of their broadcast medium, they are similarly granted an exemption allowing them to pay only a below-market rate. Legally speaking, this gives them a competitive advantage over other digital platforms that are compelled by more contemporarily-aware legislation to pay artists the full royalty rate for their recordings. The end result is income taken out of artists' pockets.
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">The current <a href="https://twitter.com/hashtag/copyright?src=hash&ref_src=twsrc%5Etfw">#copyright</a> system for music creators is in the distant past and does not reflect the current digital environment, resulting in below-market compensation.<br><br>Along with <a href="https://twitter.com/RecordingAcad?ref_src=twsrc%5Etfw">@RecordingAcad</a> members, tell <a href="https://twitter.com/hashtag/Congress?src=hash&ref_src=twsrc%5Etfw">#Congress</a> you support comprehensive music reform: <a href="https://t.co/9tK7wAVF5L">https://t.co/9tK7wAVF5L</a> <a href="https://t.co/wCayhAXLyI">pic.twitter.com/wCayhAXLyI</a></p>— GRAMMY Advocacy (@GRAMMYAdvocacy) <a href="https://twitter.com/GRAMMYAdvocacy/status/963140597753184257?ref_src=twsrc%5Etfw">February 12, 2018</a></blockquote>
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The statutory royalty rate for recorded music should be a standard compulsory payment set forth by Copyright Royalty Judges, whose job it is to take into account the market factors and set the price rate according to a fair and equitable willing buyer/willing seller standard. This provision is endorsed by all music stakeholders, and is central to important legislation like the Fair Play Fair Pay Act put forth by Ranking House Judiciary Member Jerry Nadler, as well as the Music Modernization Act, which seeks to apply the same willing buyer/willing seller compensation standards towards payout of songwriter royalties.
It is time to eliminate these outdated exemptions, level the playing field, and ensure equitable and fair compensation for all creators.
Music Licensing Reform Gains Momentum: Is 2018 The Year Of Real Change?
