Music Licensing – Radio Performance Tax

Federal copyright law already requires local radio stations to pay a performance fee to authors and composers of songs played over the air.  In fact, radio pays approximately $350 million each year to performance rights organizations. 

But federal copyright law has ever required radio stations to pay record companies and artists for songs played over the air.  And with good reason.  For more than 75 years, record labels and artists have relied on radio as a means of free promotion, which has led to increased visibility and popularity for artists, more sales of recordings, and more concert ticket sales.  Given the enormous value of this free promotion, Congress has repeatedly rejected calls to revise copyright law to require radio stations to pay a performance fee (or "tax") for music played over the air.

Changes in the record industry wrought by digital technologies have forced record labels to restructure their business model.  As part of that process, record labels and artists are pressing for Congress to impose a performance fee for the first time.  Bills have been introduced in recent years to do just that, but fortunately a joint resolution called the "Local Radio Freedom Act" has been introduced to in opposition to the performance tax to counter the push by record labels.

This year, Texas Congressmen Mike Conaway and Gene Green have again introduced the Local Radio Freedom Act (H. Con. Res. 6) and Senators Mike Barrasso and Heidi Heitkamp have introduced a companion resolution in the Senate (Sen. Con. Res. 13).  The resolution enjoys broad bipartisan support and that support has been critical in preventing action on harmful performance tax legislation.  Last Congress, Congressman Rob Wittman and former Congressmen Robert Hurt and Scott Rigell cosponsored the resolution.

So far this year, pro-performance tax advocates have not introduced legislation, but broadcasters are prepared for them to do so again this Congress.  This page provides resources for VAB members to advocate against a performance tax and in support of the Local Radio Freedom Act.

There may be other music licensing proposals that could be considered as part of a broader copyright reform package.  Last Congress, there were proposals to change the method of compensating authors and composers in way that would increase copyright fees they receive from stations (the " Songwriters Equity Act"), to create a digital performance right in pre-1972 recordings that are currently exempt from copyright law (the " RESPECT Act"), and various discussions regarding the proper standard to determine reasonable royalty rates for songs streamed digitally. 

What You Can Do.  For now, focus on the performance tax.  On this page, you'll find issue papers, a list of quotes from label executives and artists ("In Their Own Words,"), a copy of the Local Radio Freedom Act, and a resolution from all 50 state broadcast associations in opposition to a performance tax.  Use these resources as a guide to lobbying members of the Virginia Congressional delegation. 

 

 

SUPPORT THE LOCAL RADIO FREEDOM ACT

(H. Con. Res. 13 and Sen. Con. Res. 6)

Record companies want Congress to impose a new statutory fee to require local radio broadcasters to pay record companies and recording artists for playing music over the air.  Virginia broadcasters oppose proposals to impose such a new fee-which they consider a "performance tax"-on local radio stations.

 

Free Airplay Is Invaluable To Record Labels and Recording Artists 

  • For more than 80 years, record companies and performers have thrived from the free advertising and promotion they receive when local radio broadcasters play their music.  This free airplay touches 268 million listeners every week and provides the recording industry increased popularity, visibility, and record sales.  A new performance fee would give a government-mandated economic windfall to record companies and performers who already receive untold value from this free airplay on the radio.
 

How Would a New Performance Fee Impact Virginia Radio Stations?

  • A new performance tax would impose unnecessary and unfair financial burdens on the nearly 300 local commercial radio stations in Virginia that directly contribute to thousands of jobs and provide critical local news, weather and public safety programming to their listeners. 
  • Adding a performance tax would be in addition to the substantial copyright fees that stations already pay to authors and composers of music played on the radio, and could financially cripple some local radio stations' bottom lines. 

 

Forcing Stations To Pay Record Labels Misunderstands the Marketplace 

  • Record companies sometimes try to pay cash to radio station disc jockeys and station managers to play their records.  That is the best measure of how critical airplay on local stations is to the success of a record and concert attendance.  It's called "payola," and it is and has been a serious problem for the broadcast industry.  It is ironic that record companies now want Congress to require stations to pay them. 
  • The fact that the record labels are struggling in the marketplace to adapt their business model to the digital age is no basis to invoke the government to impose a new fee on the local radio stations that remain the labels' greatest promotional tools.  In fact, some record companies have successfully negotiated private agreements with radio stations, proving that the marketplace is working without the need for government intervention.
 

Is There a New Resolution In Opposition To a Performance Tax?

  • Yes.  Congressmen Mike Conaway and Gene Green have again introduced the Local Radio Freedom Act (H. Con. Res. 13) in support of local broadcasters' opposition to a performance tax.  A companion resolution has been introduced in the Senate (S. Con. Res. 6).  Last year's resolution generated more than 250 cosponsors in the House and Senate, including a bipartisan majority of the House of Representatives.
  • Virginia broadcasters remain willing to work with Congress and stakeholders on a balanced approach to music licensing, but it is critical that Congress continue to reject calls for a new performance tax that would cripple free local radio stations and prevent new artists from breaking into the recording business.

 

Virginia's local radio broadcasters urge you to cosponsor the Local Radio Freedom Act (H. Con. Res. 13 and S. Con. Res. 6). 

 

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