DC Inno - Elvis Costello and Cyndi Lauper Want Congress to Get Them More Royalties

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by Eric Hal Schwartz

Musicians will be getting some serious royalties if a new bill proposed by Reps. Jerrod Nadler (D-NY) and Marsha Blackburn (R-Tn.) becomes law. The Fair Play Fair Pay Act would make radio stations pay performance royalties to musicians and change how satellite radio decides royalty rates. The two lawmakers officially unveiled the new bill in New York City, joined by musicians including Elvis Costello, Cyndi Lauper, Roseanne Cash, Gloria Gaynor and Abdul "Duke" Fakir of the Four Tops.

Artists get shortchanged in the current system according to the bill's supporters. AM and FM radio stations don't have to pay royalties when they play songs right now, and royalty rates for satellite radio are based on a standard created before satellite radio currently existed. The new bill would eliminate the measure in current law that lets digital radio companies play songs created before 1972 without paying royalties as well.

"The current system is antiquated and broken," Nadler said in a statement. "It pits technologies against each other, and allows certain services to get away with paying little or nothing to artists. For decades, AM/FM radio has used whatever music it wants without paying a cent to the musicians, vocalists, and labels that created it. Satellite radio has paid below market royalties for the music it uses, growing into a multibillion dollar business on the back of an illogical "grandfathered' royalty standard that is now almost two decades old."

The bill is supported by groups including D.C.-based SoundExchange, the non-profit organization in charge of distributing royalties to record labels and artists for streaming music. It adds up to hundreds of millions of dollars a year, but the rate is only about a fifth of a cent per song.

"For decades, music services have gotten away with building their business on the backs of hard working musicians, paying unfair rates -- and in the case of the $17.5 billion radio industry, paying nothing at all -- for the music they use," said SoundExchange CEO Michael Huppe in a statement. "The Fair Play Fair Pay Act introduced today will bring much needed reform to the music industry and addresses many of the issues that plague the recorded music industry."

Music licensing reform has been getting kicked around Congress in different forms for a while now, like the Songwriter Equity Act sponsored by Congressman Doug Collins (R-Ga.). That bill would change the Copyright Act to change how royalty rates are arbitrated in the courts to peg them to market value rather than based on standards set over a hundred years ago. It would put all forms of music royalties on the same level, Collins explained.

"Musicians should be able to negotiate on the free market," Collins said. "The issue is how to make it fair."

Collins introduced his bill to raise awareness and support for copyright and royalty reform, arguing that the current system stifles innovation and improvement by giving preference to what is now an outdated way of doing things.

"The federal government should not be promoting one business model over another," he said. "There's agreement by most Members on that."

There's no certainty that any form of licensing reform will get to President Obama's desk however. There's strong opposition from broadcasting companies and trade groups. They argue that having to pay royalties would limit radio stations in who they play and cut the exposure that musicians get from radio play that helps their career. The Fair Play Fair Pay Act is itself out of touch with the reality of the music business and that Congress has already supported ending new royalties and performance fees on broadcast stations.

"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 National Association of Broadcasters said in a statement.

It's going to be a fight that will draw in a lot of big names and big money. But the music angle ensures it will be plenty high-profile before any resolution, and the sponsors are vowing to get the bill signed into law.

"Artists, musicians, producers and radio services alike deserve better," Nadler said. "The Fair Play Fair Pay Act fixes this broken and unjust system by making sure all radio services play by the same rules, and all artists are fairly compensated."

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