10.15.09

Judiciary Committee Reports Bipartisan Performance Rights Legislation

WASHINGTON – The Senate Judiciary Committee Thursday reported bipartisan legislation that will give fair compensation to musical artists while protecting songwriters.  The bill reported by the Committee responds to concerns from smaller commercial and noncommercial stations by providing a flat annual royalty option for unlimited use of music.

Introduced in February by Committee Chairman Patrick Leahy (D-Vt.) and Senator Orrin Hatch (R-Utah), the Performance Rights Act will end an exemption that benefits traditional, over-the-air broadcasters that are not required to pay recording artists for use of their work.  Webcasters, satellite radio providers, and cable companies are required under current law to pay compensation to artists.

“When Internet radio or satellite radio play a song, both the songwriter and the performer are compensated,” said Leahy.  “But when over-the-air stations play music, the performer is not compensated.  Radio play surely has promotional value to the artists, no one is denying that.  But there is a property right in the sound recording, and those that create the content should be fairly compensated for their work.”

The Performance Rights Act provides noncommercial radio stations, including educational, public and religious stations, with the option of a nominal, annual flat fee.  Approximately three quarters of all radio stations make gross revenues less than $1.25 million, and qualify for the annual flat fee.  An amendment adopted Thursday establishes a tiered schedule of fees based on gross revenue:

  • A flat fee of $5,000 for commercial stations making gross revenues of between $500,000 and $1.25 million
  • A flat fee of $2,500 for commercial stations making gross revenues of between $100,000 and $500,000
  • A flat fee of $500 for commercial stations making gross revenues of between $50,000 and $100,000
  • A flat fee of $100 for commercial stations making gross revenues under $50,000
  • A flat fee of $1,000 for noncommercial stations making gross revenues more than $100,000
  • A flat fee of $500 for noncommercial stations making gross revenues between $50,000 and $100,000
  • A flat fee of $100 for noncommercial stations making gross revenues under $50,000


Leahy said, “We will still have a lot of work to do and I strongly encourage the National Association of Broadcasters to work with us, work with the artists and the music industry, and help us reach an agreement that protects broadcasters while ensuring that artists are compensated fairly.”

The amendment adopted Thursday also establishes parity in the rate standard across platforms that publicly perform sound recordings and includes protections for songwriters to ensure the sound recording performance right cannot be used to adversely affect songwriter royalties.

The Performance Rights Act is cosponsored by Committee members Dianne Feinstein (D-Calif.) and Chuck Schumer (D-N.Y.), and Senators Barbara Boxer (D-Calif.), Lamar Alexander (R-Tenn.) and Bob Corker (R-Tenn.).  The Senate Judiciary Committee held a hearing on performance rights parity in August.

The bill is supported by the Leadership Conference on Civil Rights, the League of Rural voters, the Utah State AFL-CIO, the League of United Latin American Citizens, the A. Philip Randolph Institute, the National Coalition of Latino Clergy and Christian Leaders, the American Federation of Musicians, the National Congress of Black Women, the Black Leadership Forum, the National Hispanic Media Coalition, the Labor Council for Latin American Advancement, and the Vermont State Labor Council, as well as artists and record labels.

Companion legislation introduced by House Judiciary Committee Chairman John Conyers (D-Mich.) and Representative Darrell Issa (R-Calif.) advanced to the full House of Representatives in May.

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Statement Of Senator Patrick Leahy (D-Vt.),
Chairman, Senate Judiciary Committee,
Executive Business Meeting
October 15, 2009

Today we are considering the Performance Rights Act, which Senator Hatch and I reintroduced in February. This is a bipartisan, bicameral bill that is cosponsored by Senator Corker, Senator Feinstein, Senator Alexander, Senator Boxer, and Senator Schumer.  In the House, the companion legislation was introduced by Chairman Conyers, and cosponsored by Mr. Issa, Ms. Blackburn, Mr. Wamp and Mr. Shadegg.  The House Judiciary Committee reported its bill in May.  I hope we will do so today.

This legislation will end a glaring inequity in our intellectual property law that disadvantages American artists around the world, as well as here at home.  

When we listen to music, we are enjoying the intellectual property of two creative artists – the songwriter and the performer.  The success, and the artistic quality, of any recorded song depends on both.

When Internet radio or satellite radio play a song, both the songwriter and the performer are compensated.  But when over-the-air stations play music, the performer is not compensated.  The radio station sells advertisement time and makes money off the performer’s sound recording, but the artist does not get compensated.  That is wrong and our bill corrects this injustice.

Radio play surely has promotional value to the artists, no one is denying that.  But there is a property right in the sound recording, and those that create the content should be fairly compensated for their work.

The United States is behind the times in this regard.  Ours is the only Nation that is a member of the Organization for Economic Cooperation and Development but still does not compensate recording artists.  The result of the lack of performance rights in the United States is that American artists are not compensated when their recordings are played in Europe or anywhere else around the world.  Their royalties are collected but go unclaimed because we have no reciprocal performance rights here in the United States.  That amounts to between $70 million and $100 million a year that are unreceived by American recording artists, who are among the most popular in the world.

The previous two administrations have recommended a performance right for sound recordings, and the Register of Copyrights submitted testimony again this year in support of correcting this anomaly in our laws.

I hope we will be able to report this bill today.  We will still have a lot of work to do on it, and I strongly encourage the National Association of Broadcasters to end their stonewalling, and to work with us, work with the artists and the music industry, and help us reach an agreement that protects broadcasters while ensuring that artists are compensated fairly.

When we begin our consideration of the bill, I will offer a Leahy-Hatch amendment that makes important changes in four areas.  Most importantly, it makes additional accommodations for smaller broadcasters.  I have heard from small broadcasters concerned about how paying for the content they use may affect their stations.  I said at our hearing in August that I wanted to address their concerns.  With this amendment I think we have.  Our amendment provides further accommodations for smaller broadcasters, including tiered payment levels.  I thank Senator Franken and others for their suggestions on this issue to protect small broadcasters.  Broadcasters making less than $50,000 can elect to pay a flat, annual fee of only $100 to play all the music they want.  All stations making under $1.25 million will have a flat fee option, which in many cases is less than their trade association dues spent lobbying against this bill.

Second, the amendment includes language to address an issue raised by Senator Feinstein that the rate standard used to set royalties should be the same across platforms.  I know Senator Feinstein would still like to do more work on this issue and, as I said when we introduced this bill together, I value her leadership on music issues and encourage her to continue that work.  This amendment is a good step in the right direction.

Third, the amendment contains protection for songwriters that are likewise contained in the House bill.  I want to be sure that as we establish a performance right for sound recording artists, we make sure that nothing in the bill harms songwriters.  That is not our intention and should not be the effect.

Finally, the amendment will ensure that the sound recording artists actually receive their share of royalties when their music is played.  Record labels often hold the property right in the sound recording, and they deserve to be compensated, but we all want to ensure that the artists receive their compensation, too.  I commend the recording industry for working with us on this issue to protect the artists whose music we all love to hear.

I encourage the broadcasters to end their holdout and show that same willingness to work with us to reach an equitable solution to this problem.

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