The Government Accountability Office is continuing to review of the impact of the proposed Performance Rights Act, as requested by the author, House Judiciary Committee Chairman John Conyers (D-MI) and other members. But the GAO has also sent those Members of Congress a letter it has received from the US Copyright Office pressing the GAO for an endorsement of PRA.
The GAO found that both the radio and record industries benefit from the current situation, but that the promotional value of having songs played by radio stations has declined – although it can’t say how much that value is.
The GAO acknowledges that implementing the PRA would place a new economic burden on radio stations – and possibly put some out of business – but it also notes that the increased revenues would help the record companies invest in new music. It is currently working on a more complete report which may include more detailed economic analysis.
Here is a brief summary from the original GAO report issued in February:
“Based on GAO’s review of the recording and broadcast radio industries and the proposed Performance Rights Act, it found the following: (1) Both the recording and the broadcast radio industries face economic challenges. Digital technology and piracy have decreased the sale of records, the recording industry’s main source of revenue. Economic conditions and the fragmentation of listeners among newer media platforms, such as the Internet and mobile devices, have reduced advertising sales, broadcast radio’s primary revenue source. (2) Both the recording and broadcast radio industries benefit from their current relationship. The recording industry receives broadcast radio airplay, which promotes sales for sound recordings and concert tickets. For the radio industry, sound recordings attract listeners to radio stations that sell advertisements. (3) The proposed act would result in additional costs for broadcast radio stations. Costs from performance royalties would vary based on whether the station broadcasts music and its gross annual revenue. Stations may also face administrative costs from record-keeping and playlist reporting requirements as well. Some radio stations that are unable to adjust to these new costs may reduce staffing levels; change from music to nonmusic programming, such as news, talk, or sports; or discontinue operations. (4) The proposed act would result in additional revenue for record companies, musicians, and performers. Musicians and performers whose songs are broadcast on the radio would receive an additional income stream. Record companies could use the additional revenue to invest more heavily in the creative process of music.”
The letter from Marybeth Peters, Register of Copyrights, urges the GAO to “elaborate on some of the more concrete positive effects that will likely come about with the passage of the PRA,” such as preventing job losses in the music industry. In particular, it notes the “perilous financial state of EMI,” one of the big four record labels.
Peters also downplays the economic impact the PRA would have on broadcasters, noting that the ad market is cyclical and that radio revenues appear to be recovering. “The Office therefore suggests that the Report highlight the fact that the PRA would not require broadcasters to pay royalties for their public performance of sound recordings for anywhere from one to three years after the date upon which the PRA is enacted, depending upon the size and nature of the broadcast station.”
A pdf of the letter and GAO cover (6 pages) is available on this webpage.
RBR-TVBR observation: The US Copyright Office has long been at odds with the United States Congress, to which it is supposed to report, over the US law on music royalties. It is hardly surprising that the Register of Copyrights is trying to pressure the GAO to lean its analysis in favor of the RIAA. The ethics may be questionable, but it is not surprising.