In what could disrupt a long-established model, US record companies and performing artists are putting pressure on Congress to close a century-old copyright law that exempts broadcast companies from paying them for playing songs on terrestrial radio, the Financial Times has reported.
As digital music comes of age and the industry witnesses a significant decline in revenues, record companies and artists are arguing that they should be paid royalties for the use of their songs on commercial radio stations, on top of the royalties currently paid to songwriters and composers.
However, the move could have a significant impact on broadcasters and radio stations, particularly local stations, which would be required to pay higher prices to air content.
Cary Sherman, president of the Recording Industry Association of America, told the FT that broadcasters’ arguments against paying record labels and artists are “unjustifiable and outdated.”
“This bizarre anomaly of broadcasters not paying artists and labels for the use of their music on AM/FM radio has got to end,” Sherman said.
According to the FT, broadcasters currently earn approximately $17 billion a year in advertising revenues, with just 4% going on royalty payouts, while Spotify claims it pays 70% of its revenue as royalties.
Dennis Wharton, senior vice president of the National Association of Broadcasters, said to the FT: “It is disappointing that this bill retreads years-old policy positions rather than advancing the copyright dialogue through policies that help grow the entire music ecosystem.”
The new bill will be unveiled by US representative Jerrold Nadler on Monday 13 April in New York.
