by Howie Cockrill
In December, 2007, several members of Congress introduced bipartisan, bicameral legislation to their respective floors.
The subject: sound recording performance right for terrestrial radio.
If this aptly named "Performance Rights Act" is passed, it will send major ripples throughout the entertainment industry.
Regardless of its success in the House and Senate, however, the rhetoric from both sides is bringing to boil a controversy that has long been simmering.
BACKGROUND
Let’s start with the basics.
Any single track of recorded music consists of 2 copyrights.
There is a copyright in the written words and music (the “musical composition”), which is typically held by the songwriter or their publisher.
There is a copyright in any recording of the composition (the “sound recording”), which is typically held by the performing artist or their label.
These copyrights give their owners the exclusive rights to reproduce, distribute, perform and alter the composition and/or sound recording.
The proposed legislation (and this article) have to do with the “performance” right.
Composition copyright owners (songwriters/publishers) are entitled to receive a royalty for performances on:
- terrestrial (AM/FM) radio
- internet radio
- satellite radio
- cable radio
This royalty is collected on behalf of the songwriters and publishers by “performance rights organizations” (PROs) such as ASCAP, BMI and SESAC.
Sound recording copyright owners (artists/labels) are entitled to receive a royalty for performances on:
- internet radio
- satellite radio
- cable radio
This royalty is collected on behalf of artists and labels by SoundExchange.
Prior to 1995, artists and labels did not have a performance right at all (i.e., they were not entitled to receive royalties from any performance of their works).
In fact, since the advent of commercial broadcasting in the 1950s – record labels and broadcasters enjoyed a symbiotic relationship.
Because there was no performance right in sound recordings, broadcasters were not obligated to pay labels for playing their songs.
Labels were content to receive compensation in the form of radio’s “free advertising” of their artists’ songs, which lead to increased revenue from album sales.
However, this symbiosis was upset when music was made available online via streaming technology.
Traditional AM/FM broadcasters began to transmit their programs and playlists simultaneously over the radio waves and on the internet (“simulcasting”).
Internet-only broadcasters (“webcasters”) created their own stations for both popular and niche music.
Today, a wide variety of web radio formats are available to the public, with some stations mirroring AM/FM programs in their non-interactive and non-subscription formats.
Other stations are extremely interactive, creating borderline “on demand” formats were listeners have a great deal of control over what songs they hear.
Still other stations are subscription based, creating a new revenue stream specifically for digital radio stations.
In part because the RIAA saw "on demand" radio as a threat to album sales and because of the possibility in sharing in subscription revenue, the RIAA embarked on a campaign to lobby Congress for relief – resulting in the Digital Public Performance Right in Sound Recordings Act of 1995.
The DPRSA gave artists and labels a limited right to collect royalties for performances of their recordings.
Stay tuned for follow-up articles on the players involved, the recent timeline of the bill and the potential ripples in the industry.
Can't wait? Head over to the Library of Congress.....
Read the Senate version of the bill: S.2500
Read the House of Reps. version of the bill: H.R.4789
This ridiculous notion will spell the instant death of thousands of local radio stations. All except the talk stations...and the religious stations...sensing a pattern?
Posted by: hansy | July 13, 2009 at 09:51 AM