Performance royalties get loft


The members of the House Judiciary Committee’s Subcommittee on Courts, the Internet and Intellectual Property recognize that there are two sides to the dispute over the imposition of broadcast performance royalties – well, some of them do. Many see only the performers side, and the members who see merit in the broadcast side also see merit in the performer’s argument. That means the tilt would seem to be firmly to the performer side of the issue.

Illustrating the uphill battle broadcaster face on this issue is Ranking Member Howard Coble (R-NC), who said this isn’t a black and white issue, and noted that he “has dogs all over this fight,” referring to respected friends in both broadcast and recording circles. In the end, though, he has finally decided  “I believe the issue before us leans toward the performers.” He said care must be taken, moving forward, to make sure arrangements are fair to both sides and that a transitional period gives broadcasters time to adjust.

Among the legislators present, Ric Keller (R-FL) and former radio Talker Mike Pence (R-IN) were the strongest broadcast backers. Keller noted that the big problem facing the recording industry is piracy, not their relationship with broadcasters. He said that fact that payola was a common practice and in fact persisted long after it was criminalized is pure proof of the value of airplay. Pence said that if artists are to be paid for spins, then perhaps broadcasters should be compensated for all of that artist’s recording sales within the station’s ADI.

There was no shortage, however, of legislators throwing their weight fully behind the artists, including Subcommittee Chair Howard Berman (D-CA), co-sponsor Darrell Issa (R-CA), Judiciary Chair John Conyers (D-MI) and many others.

Issa noted that a performer whose recordings are out of stock cannot realize a promotional benefit, and should otherwise be compensated. The most blistering argument for artists, though, came from Brad Sherman (D-CA) who objected to the FCC characterizing the propsed legislation as a “performance tax,” since the royalty will not result in money for the government. He argued that one cannot produce and sell Disneyland t-shirts without permission on grounds that you’re promoting Disneyland? He also agreed that maybe some garage band would like their work played over the air for free to get promotional value, but that should be the garage band’s decision.

Lead witness Nancy Sinatra argued that for many “classic” artists, the compensation from royalties may be the difference between being able to purchase food and drugs or have to choose one or the other. She said performers were being robbed, and are just seeking a fair share of the proceeds from their efforts. The American Federation of Musicians Thomas Lee said that fame and fortune eludes most artists, who rely on multiple income steams to make ends meet and need this benefit.

Arguing on behalf of broadcasters in general and small market broadcasters in particular, Commonwealth Broadcasting’s Steve Newberry presented evidence linking performer success directly to airplay. He also pointed out the the common comparison of the US lack of performance royalties to its existence elsewhere is not a fair, since in most other nations the government owns a significant portion of the airwaves and the royalties are paid by that government, not a private business. ICBC’s Charles Warfield charged that the recording industry was going to slurp up a significant amount of the royalties paid by broadcasters, and testified that the biggest problems many broadcasters have is being stuck in long-term, one-sided contract with recording companies.

RBR/TVBR observation: After soaking in the proceedings, we’d have to guess that this is a bill that will in fact have some legs, and that would be true even if the Democrats don’t pick up a single new seat in the next Congress. However, many supporters of royalties mentioned the need to proceed carefully so as not to cause undue harm to broadcasters, suggesting that a final version of the bill may still be a ways off. And if it does indeed exhibit the legs to make it all the way to a White House signing ceremony, we’d guess there’s a good chance that the harm to broadcasters may be mitigated, or at the very least delayed.

The symbiotic relationship between broadcasters and the recording industry is getting lip service in these proceedings, but it is not carrying the day. And what is being totally ignored is the often noxious relationship between artists and the recording conglomerates they work for(at least until Warfield was allowed to speak). We think that warrants a hearing, both to examine the history and to see how it will play out going forward.

For example, if a radio station were to play a Frankie Avalon record, who would get paid, Frankie or his old record company? Does Frankie have to have rights, or is having his name on the list of artists enough? We would like to see more attention paid to that. How much of these royalties, should they come into being, will go to the performers choosing between food and drugs, and how much will go into the accounts of the major corporations choosing whether to bank it in the US or a bank abroad? We think that warrants some congressional attention before broadcaster pay one red cent.