Performance royalty headed for markup


It’s time to strap on helmets and report to defensive battle stations. John Conyers (D-MI) will muster his committee Wednesday 5/13/09 for the purpose of marking up H.R. 848 the “Performance Rights Act.” It will also consider the “Webcaster Settlement Act of 2009.”

There are two other events on the bill, which kicks off at 10:15 AM Eastern, H.R. 1741, the “Witness Security and Protection Grant Program Act of 2009;” and H.R. 2247, the “Congressional Review Act.”

According to musicFIRST, Conyers and his allies intend to introduce an amendment that would lower the annual payment for small stations to as little as $500 annually.

But broadcasters aren’t buying it. The Michigan Association of Broadcasters weighed in, saying “The fee would go directly to the record companies’ labels, with only a small portion going to the creative artist. Three of the four largest record label conglomerates are internationally-based, meaning local dollars would be sent overseas.” MAB’s Karole White added, “Local radio broadcasters simply cannot endure an additional fee. No time is a good time for a tax increase, but given the current state of the economy, now is the absolute worst time for government to increase the cost of doing business in Michigan and send money to foreign conglomerates. Make no mistake this measure, if passed, this new tax will cost Michigan money and jobs.”

Perhaps musicians shouldn’t be buying it either. Because this isn’t really about performers, it’s about copyright owners.

Featured artists figure to make 50% of the take, but the rest will have to divide 5% between them. It goes on to note that among nonfeatured artists, “musicians” would get 50% of the 5%, and nonfeatured vocalists will get the other 50%.

Meanwhile, some civil rights groups and minority broadcasters are furious with Conyers for scheduling the mark-up after they believed he had promised them another hearing on the bill. A wide range of civil right groups have lined up against the bill as likely to decimate the ranks of minority broadcasters – an unusual alliance in opposition, given that Conyers has usually been a champion of civil rights.

“If this passed, probably at least a third of all minority owned [broadcasting] companies would go bankrupt,” warned David Honig, Executive Director of the Minority Media and Telecommunications Council (MMTC).

Honig explained to RBR/TVBR that it wouldn’t matter if Conyers reduced the fee for small broadcasters to $5, because the impact would still be the same. The only way a start-up company can get financing is to have a business plan to get big, so there is no way for a new minority-owned broadcasting company to become profitable under the proposed performance rights fees. As little financing as there is available for broadcast acquisitions now, it would simply dry up if the bill is passed, the MMTC official said. “It’s coming at the worst possible time,” Honig noted.

RBR/TVBR observation: This isn’t the Performance Rights Act. It’s the Major International Recording Conglomerate Welfare Act. Looking at the bill, it’s easy to see where broadcasters get hurt, but it’s also hard to figure how musicians are benefitted. But it’s amply evident how the labels benefit.

Featured artists get a cut depending on how the contract is worded? Does anybody really believe that anybody other than established in-demand artists are going to have this kind of favorable language in their contract?

And as for the nonfeatured musicians, which must number into the thousands upon thousands, they have their laughable 5%, which amounts to a drop-in-the-bucket $50K for every $1M collected.