The Public Performance Right Gone Wrong

The intentional omission of a public performance right for sound recordings from the Copyright Act was the product of pure influence peddling. It created an inequity in American copyright law that has not only denied performing artists’ their due, it has also bedeviled our copyright negotiations with other countries. Yet, because it concerns only the use of sound recordings by over-the-air broadcast radio it must be acknowledged that this at this point it is a debate about the past, not the future.

Thomas Edison invented playable recorded sound in 1877. It took almost a century after that for sound recordings to be protected under federal copyright law. The Copyright Act was finally amended in 1972 to include sound recordings but they were denied the right of public performance, meaning anyone could play a record without permission or payment. Why? Because the radio broadcasters who made their money playing music didn’t want to pay and successfully lobbied Congress to omit this key element of copyright.

Frank Sinatra. Elvis. Aretha Franklin. The Rolling Stones. The Beach Boys. Michael Jackson. Whitney Houston. Taylor Swift. None of them were ever/have ever been paid for the radio broadcast of their records. Perhaps some people aren’t concerned about that because those artists’ success allowed them to earn income through other means. In that case, consider an indie band you may like – they also have never been paid by broadcast radio. Or consider a struggling new band you never heard because they didn’t make enough money to keep going.

That last point segues into the broadcasters’ most common response: radio play generates value through exposure to fans. No doubt a struggling band wants as much air time as they can get. It seems to me that if the broadcasters were correct that the promotional value of radio play was so great, every performer would prefer increased play over increased royalties. If that were the case, broadcasters could successfully negotiate royalty-free play for all music. But the broadcasters’ second most common argument is that providing a full public performance right would hurt the financial viability of smaller radio stations. To me, that’s the tell. They know that promotional value is NOT enough to negotiate free play in the free market. Instead, they have rigged the law so that the bands (or their labels, if they got signed by one) don’t have the opportunity to have a negotiation.

Global Considerations

The United States is one of the only countries in the world that denies this right to the owners of rights in recorded performances. Many countries provide a requirement for radio broadcasters to pay into a fund, which is in turn distributed to the owners of the sound recordings proportionate to how often their music is played in that country. This is common in Europe, so I’ll use that as an example. Payment from the fund is available for non-European songs only on the basis of reciprocity. That means they will provide compensation to American right holders only if the United States provides compensation for radio play of European music here. Because our law lacks a public performance right for radio broadcasts, no one gets paid. Thus, payments for the play of American music in Europe and other countries with similar systems around the world is withheld. We are leaving money on the table.

Trying to get foreign countries to change their law to pay American right holders without first changing our law is no easy task. For example, when I was on the U.S. delegation negotiating the free trade agreement with Australia, this issue was so contentious that it was resolved (so I was told) at the highest level: between then-President George W. Bush and then-Prime Minister John Howard. We didn’t win that one, although aside from that the agreement was very strong.

Looking Forward, not Backwards

This is the age of streaming. It will surprise no one that broadcast radio is steadily losing its music-listening audience to streaming services. While the law regarding broadcast radio is just as unfair as always, the practical consequences are less than in the past and shrinking. My concern is by the time this matter is finally remedied it will be of negligible economic consequence.

Thanks to a law enacted in the 1990’s, the music streaming services DO have to pay for playing sound recordings. To be sure, there are substantial controversies over how much (or how little) the streaming services pay, both for the use of sound recordings and the underlying musical works (sheet music). Given that streaming is clearly the present and future of music, it seems to me this should be at least as high a priority for creators as remedying the broadcast loophole.

Conclusion

After more than fifty years of unfairness, I certainly don’t blame musicians for being angry. Every year there are efforts in Congress to fix this. But, as I told a colleague many years ago, show me the list of Members of Congress who want to anger their local broadcasters and then go into an election. So, the legislation has languished at the expense of musicians everywhere and especially American musicians. Let’s get this done.