Leahy, Hatch, Berman, And Issa

Introduce Bipartisan, Bicameral Legislation
To Give Fair Compensation To Musical Artists

 

WASHINGTON (Tuesday, Dec. 18, 2007) – Leading members of the Senate and House Judiciary Committees Tuesday introduced bipartisan, bicameral legislation to end an exemption benefiting traditional, over-the-air broadcasters and ensure that performing artists are compensated when their sound recordings are used.  Webcasters, satellite radio providers and cable companies compensate artists for use of their sound recordings, but conventional radio stations do not.

 

Legislation was introduced in the Senate by Judiciary Committee Chairman Patrick Leahy (D-Vt.) and Sen. Orrin Hatch (R-Utah), a senior member and former chairman of the panel, and in the House by Rep. Howard Berman (D-Calif.), chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property, and House Judiciary Committee member Rep. Darrell Issa (R-Calif.).  Senate Judiciary Committee member Dianne Feinstein (D-Calif.) and Rep. John Conyers (D-Mich.), the chairman of the House Judiciary Committee, are also co-sponsors of the measures.  The introduction of the bipartisan legislation follows hearings in both the Senate and House Judiciary Committees earlier this year to discuss performance rights for artists.

 

The bills would end the broadcaster exemption, and provide that artists be paid for use of their sound recordings.  Both bills would also provide relief from rates agreed to for use of the sound recordings for noncommercial radio stations, including public, educational, and religious stations, by giving those stations the option of a nominal, annual flat fee.  The bills provide similar relief for commercial stations whose annual revenue is under $1.25 million, roughly 77 percent of all music radio stations.  Finally, the bill ensures that the public performance rights of songwriters or copyright owners of musical works are not harmed.

 

“Radio stations pay songwriters for the right to broadcast the music they have composed.  The work of songwriters is promoted by the air play, but no one seriously questions the right of the songwriter to be paid for the use of his or her work.  But the performing artist is not paid by the radio station,” said Leahy.  “The time has come to end this inequity.  I want to ensure that the performing artist, the one whose sound recordings drive the success of broadcast radio, is fairly compensated.”

 

“There is a symbiotic relationship between musicians and broadcasters,” said Hatch. “You can’t have one without the other, and both make significant contributions to our culture and economy. We need to recognize performance rights, and we want to ensure this legislation is fair to both the broadcasters and the artists.”

“With introduction of this bill, we have taken the first step to provide artists, musicians, and labels with compensation for their contribution to the music we hear over the radio,” said Berman.  “It’s only fair that we work toward parity for the different technology platforms that deliver that music, but we still have a long road ahead of us.  We have only started the lengthy process of addressing songwriter concerns, broadcaster issues and greater parity.”

 

“The right of performing artists to make a living off the use of their creativity and innovation should be protected,” said Issa.  “As the music industry continues to change, it is time that all radio pays performing artists for the use of their intellectual property.”

 

“Today we take the first step toward finally giving artists and musicians their fair due,” said Conyers.  “They are the people who bring the music to life and should no longer be overlooked. My decision to take a leading role to remedy this inequity in no way alters my commitment to working with the songwriters to ensure that their rights and compensation are protected.”

 

The Senate and House Judiciary Committees are expected to consider the legislation next year.

 

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Statement of Senator Patrick Leahy

On Introduction of the

Performance Rights Act of 2007

December 18, 2007

 

Today, Senator Hatch and I are, once again, introducing important intellectual property legislation together.  We are introducing the Performance Rights Act of 2007 for a very simple and clear reason: artists should be compensated fairly for the use of their work. 

 

I am an avid music fan.  Music entertains, enlightens, and inspires us.  Much of the music enjoyed by most Americans, including myself, was first heard on traditional, over-the-air radio.  There is no question that radio play promotes artists and their sound recordings; there is also no doubt that radio stations profit directly from playing the artists’ recordings. 

 

When radio stations broadcast music, listeners 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.  Radio stations pay songwriters for a license to broadcast the music they have composed.  That is proper, and that is fair.  The songwriters’ work is promoted by the air play, but no one seriously questions that the songwriter should be paid for the use of his or her work. 

 

But the performing artist is not paid by the radio station.  The time has come to end this inequity.  Its historical justification has been overtaken by technological change; the economics of the radio industry of years past has been superseded by entirely new business models.  Webcasters compensate performing artists, satellite radio compensates performing artists, and cable companies compensate performing artists; only terrestrial broadcasters still do not pay for the use of sound recordings.  Artists should have the same rights regardless of whether it is a terrestrial broadcaster or a webcaster using – and profiting from – their work.  Radio play may have promotional value to the artist, but there is a property right in the sound recording, and those that create the content should be compensated for its use.

 

In ensuring artists are compensated, two other principles important to me are reflected in this legislation.  First, noncommercial and small commercial radio stations should be nurtured, and not threatened by a change in the law.  Second, songwriters, who now are, as they should be, paid for use of their work should not have their rights diminished in any way. 

 

The legislation we introduce today on a bipartisan basis, along with companion bipartisan legislation being introduced today in the House of Representatives, provides that artists will be compensated by broadcasters for the use of their work.  Noncommercial stations – from Vermont Public Radio which broadcasts “Saturday Afternoon at the Opera,” to the campus radio station at St. Michael’s college that plays “Those Monday Blues” and “The Odds and Evens Jazz Show” – have a different mission than commercial stations, and therefore need a different status, one that will subject the stations only to a nominal flat fee for use of sound recordings.  Commercial radio stations that have a revenue under $1.25 million, which comprises roughly three-fourths of all music radio stations, will also have a flat fee option.    

 

Traditional, over-the-air radio remains vital to the vibrancy of our music culture, and I want to continue to see it prosper as it transitions to digital.  But I also want to ensure that the performing artist – the one whose sound recordings drive the success of broadcast radio – is fairly compensated. 

 

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For Background Purposes

 

Performance Rights Act Of 2007

Section-By-Section

 

Sec. 1. Short Title.  This Act may be cited as the Performance Rights Act of 2007.

 

Sec. 2. Equitable Treatment for Terrestrial Broadcasts.   This section applies the performance right in a sound recording to all audio transmissions and removes the exemption on paying public performance royalties currently in place for over-the-air broadcasters by amending Sections 106 and 114 of the Copyright Act. 

 

The section also permits broadcasters to take advantage of the statutory license in Section 114 by amending subsection 114(j), but does not impose additional restrictions on the use of the license.  Rates for commercial broadcasters that are not covered by Section 3 will be set in accordance with subsection 114(f).

 

Sec. 3. Special Treatment for Small, Noncommercial, Educational, and Religious Stations and Certain Uses.  Small commercial broadcasters -- those whose gross revenues are less than $1,250,000 in any given year -- will pay $5000 per year for a blanket license.  Noncommercial broadcasters -- those stations that are public, educational, or religious under Section 118 -- will pay $1000 per year for a blanket license.  Such payments will not be due until the Copyright Royalty Board determines rates for large commercial broadcasters.

 

Sound recordings used only incidentally by a broadcaster and sound recordings used in the transmission of a religious service are exempt. 

 

Sec. 4. Availability of Per Program License.  When determining rates for broadcasters, the Copyright Royalty Board shall include a per program license for broadcast stations. 

 

Sec. 5. No Harmful Effects on Songwriters.  This section strengthens the provision in Section 114 that preserves the rights of songwriters and clarifies that nothing in the Performance Rights Act of 2007 shall adversely affect the public performance rights of songwriters or copyright owners of musical works.     

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