musicFIRST Endorses, NAB Opposes 'Free Market Royalty Act'
September 30, 2013 at 12:32 PM (PT)
Indie music lobbying group MUSICFIRST COALITION has endorsed Congressman MEL WATT’s introduction of the “Free Market Royalty Act." musicFIRST Exec. Dir.TED KALO issued the following statement:
“The Free Market Royalty Act signals accelerating momentum for an AM/FM performance right and fair pay for music creators on all platforms. Like the 2009 Performance Rights Act, which passed both the House and Senate Judiciary Committees with broad, bipartisan majorities, this bill would end the decades old government taking of music creators’ performance property rights. It would, once and for all, establish a performance right for sound recordings broadcast over-the-air. The MUSICFIRST COALITION has been flexible in supporting a variety of approaches establishing a terrestrial right, including the 2009 bill, the 2012 Interim First Act, and this legislation. After saying no to each and every approach to date, the broadcasters have run out of excuses.
“After the 2009 bill passed Congressional committees, the NATIONAL ASSOCIATION OF BROADCASTERS (NAB) and music creators reached an agreement on performance rights that broadcasters ultimately walked away from. In Congressional hearings during the past year, Members of Congress have repeatedly expressed bewilderment that broadcasters are demanding payment when others use their television programming, but have yet to acknowledge their own obligation to pay for the music they use. This bill sends all parties back to the bargaining table to find common ground.
“For webcasters who are lobbying CONGRESS for the INTERNET RADIO FAIRNESS ACT’ by claiming that the current willing buyer, willing seller’ standard doesn’t actually represent a fair market price, this bill would facilitate free market negotiations, which would indisputably arrive at such a price for music.
“For all services, the bill preserves one-stop licensing for music. And, critically, for artists, it preserves protections in current law, including direct payment, the current 50% royalty share, and designated money for non-featured artists.
“In a transparent effort to thwart music creators having a performance right enshrined in law, the NAB has heralded what it calls ‘negotiations that are driven by the free market’ as a substitute for Performance Rights legislation. But there is no market for performance rights. The handful of deals between broadcasters and record labels that have been done can only be understood as a renegotiation of the webcasting rates since creators do not have any AM/FM performance right to negotiate. Simply put, there is no such thing as a market for the performance of music on terrestrial radio when there is no performance right. Because of NAB lobbying, music creators’ performance property right has been taken away and given to broadcasters before the negotiations even begin. It’s no surprise they want to keep it that way. Rather than providing a substitute for legislation, as some have suggested, the CLEAR CHANNEL private deals appear to have inspired it.
“Leading experts on property rights pointed this out just last week when they said ‘artists who produce music deserve to hold real, effective rights’ that should be protected on all broadcast platforms – including AM/FM radio: ‘[Common sense and basic fairness dictate that the medium of transmission should not affect the existence of these rights.’
“We believe the current statutory license system is a benefit to music creators and services, and we support the current system. But those services who benefit most from it are its greatest critics, and those broadcasters who use the ‘market’ as a dodge to thwart a performance right have done the most to undermine a true, free market.
“Thank you again, Congressman MEL WATT, for your continuing leadership on behalf of artists and music creators.”
NAB Begs To Differ
Predictably, the NATIONAL ASSOCIATION OF BROADCASTERS took a rather dim view of the bill. NAB EVP/Communications DENNIS WHARTON issued the following statement:
"NAB respectfully opposes the legislation, and appreciates the support of 183 members of CONGRESS who stand with AMERICA's hometown radio stations against the offshore record labels.
"NAB believes market-based negotiations like the recent WARNER MUSIC-CLEAR CHANNEL accord demonstrate that this issue is already being addressed in the free market. This legislation would impose new costs on broadcasters that jeopardize the future of our free over-the-air service."
NAB also announced that five additional Members of Congress have signed on as cosponsors of a resolution that opposes "any new performance fee, tax, royalty, or other charge" on local broadcast radio stations. The LOCAL RADIO FREEDOM ACT is now currently co-sponsored by 171 Members of the House and 12 Senators.
The Members of CONGRESS adding their support to the LOCAL RADIO FREEDOM ACT are Reps. KEVIN CRAMER (ND-AL), SCOTT DESJARLAIS (TN-4), RICHARD HANNA (NY-22), DAVID VALADAO (CA-21) and KEVIN YODER (KS-3).
musicFIRST Returns Fire
It didn't take long before MUSICFIRST responded to the NAB statement. Exec. Dir.TED KALO responded with this statement:
“I don’t know if the NAB mistakenly sent their talking points from the last major debate over performance rights because their statement today doesn’t respond to the significant differences in this bill from the 2009 legislation.
"This is a free market negotiation bill. Under this legislation, the amount broadcasters pay in performance royalties is the amount they negotiate themselves in a free market. They have long said that the promotional value they provide is worth more to performers than performances are worth to radio. If that is true, they would continue to pay nothing. However, if they have been getting a free ride for decades on the backs of performers, a free market negotiation would finally compensate artists for their performances.
"Maybe the NAB should read the bill before hitting re-send on recycled talking points.”