Leahy, Hatch Introduce Bipartisan Performance Rights Legislation

Companion Legislation Introduced Today In House

WASHINGTON (Wednesday, Feb. 4, 2009) – Senators Patrick Leahy (D-Vt.) and Orrin Hatch (R-Utah) introduced bipartisan legislation Wednesday to give fair compensation to musical artists while protecting songwriters.  The Performance Rights Act would end an exemption benefiting traditional, over-the-air broadcasters, which are not required to pay recording artists for use of their work, as webcasters, satellite radio providers and cable companies do.  Under current law, conventional radio stations are not required to pay for such a license.

Longtime partners in copyright and intellectual property issues, Leahy and Hatch introduced performance rights legislation in the last Congress.  The legislation introduced Wednesday requires broadcast radio to compensate artists for the use of their sound recordings.  The Performance Rights Act, however, also provides noncommercial radio stations, including educational, public and religious stations, with the option of a nominal, annual flat fee.  The bill also provides similar relief to commercial radio stations that generate less than $1.25 million in annual revenue will, which includes 77 percent of commercial radio stations nationwide.

“In introducing the Performance Rights Act, we are sensitive to the needs of broadcast radio stations,” said Leahy.  “I want to ensure that the performing artist, the one whose sound recordings drive the success of broadcast radio, is compensated fairly.  Our legislation, appropriately, permits noncommercial stations to take advantage of the statutory copyright license subject only to a nominal annual payment to the artists.  Similarly, we intend to nurture, not threaten, small commercial broadcasters.  Smaller music stations are working hard to serve their local communities while finding the right formula to increase their audience size.  I will continue to work with the broadcasters – large and small, commercial and noncommercial – to strike the right balance.” 

“This legislation would ensure that musical performers and songwriters receive fair compensation from all companies across the broadcast spectrum - not just from Web casters, satellite radio providers and cable companies,” said Hatch.  “It is an attempt to strike a harmonious balance between fair compensation for artists and a vibrant radio industry in the U.S.”

The Performance Rights Act is cosponsored by Senator Dianne Feinstein (D-Calif.), Senator Bob Corker (R-Tenn.), and Senator Barbara Boxer (D-Calif.).  The Senate Judiciary Committee, which Leahy chairs and of which Hatch is a former chairman, held a hearing on performance rights parity in November 2007.  Lyle Lovett and Alice Peacock, both singer-songwriters, testified before the panel.

Companion legislation was introduced Wednesday in the House of Representatives by House Judiciary Committee Chairman John Conyers (D-Mich.) and Representative Darrell Issa (R-Calif.).

“All those in the creative chain of musical production - the artists, musicians, and others who enrich us culturally - deserve to be justly compensated for their work,” said Conyers.  “We have introduced the Performance Rights Act to ensure fairness so that any service that plays music pays those who create and own the recordings - just as satellite, cable and internet radio stations currently do. Working with the Senate, I hope that Congress may act quickly to pass this important legislation to level the playing field between different technologies and ensure rightful compensation to performers.”

 

“Beyond the fairness that this bill provides for performers, we have an opportunity to show the rest of the world that the United States practices what it preaches in protecting intellectual property,” said Issa. “For the past 70 years Congress has ignored the constitutional mandate that we protect copyrights by completely exempting broadcasters from paying performers, while the vast majority of countries have no such exemption.  Our ignorance of intellectual property rights on this issue is a worldwide embarrassment and it must end now.”

The full text of Leahy’s statement on the introduction of the Performance Rights Act of 2009 follows.  A section-by-section analysis of the legislation is available for background.

Text of Legislation as Introduced in the Senate

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Statement Of Senator Patrick Leahy (D-Vt.),
On Introduction Of The Performance Rights Act Of 2009
February 5, 2009

Today, Senator Hatch and I renew our bipartisan effort to improve and modernize our intellectual property laws.  We are reintroducing the Performance Rights Act to ensure artists are compensated fairly when their works are used.  I am pleased that performance rights legislation will be introduced in the House today, as well.

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.  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.  The performing artist, however, is not paid by the radio station. 

The time has come to end this inequity.  Its historical justification has been overtaken by technological change.  In the digital world, we enjoy music transmitted over a variety of platforms.  When webcasters, satellite radio companies, or cable companies play music, and profit from its use, they compensate the performing artists.  Terrestrial broadcast radio is the only platform that still does not pay for the use of sound recordings. 

Radio play surely has promotional value to the artists, but there is a property right in the sound recording, and those that create the content should be compensated for their work.  The United States is behind the times in this regard.  Ours is the only Nation that is a member of the Organization for Economic Cooperation and Development but still does not compensate artists.  An unfortunate result of the lack of a performance rights in the United States is that American artists are not compensated when their recordings are played abroad. 

Artists should have the same rights regardless of the platform over which their work is used.  All platforms promote artists and all platforms profit off the artists’ work.  Today, different rate standards and restrictions are applied to different music delivery platforms, with broadcast radio stations being uniquely and completely exempt.  In the last Congress, Senator Feinstein chaired a hearing in the Judiciary Committee that addressed whether the time has come to achieve platform parity by harmonizing the terms and conditions for use of the statutory copyright license.  Senator Feinstein has been a leader on this issue, and I am pleased to accept her offer to lead negotiations this year to develop a new standard that can be applied across platforms. 

We also need to make certain that songwriters are protected in this process.  Songwriters currently do receive compensation from radio stations.  The changes made by this legislation, which will ensure performing artists are compensated, should not have any negative effect on songwriters.  I will work closely with the songwriters and we will make sure that is the case. 

In introducing the Performance Rights Act today, we are sensitive to the needs of broadcast radio stations; we are sensitive to the regulatory regime under which they operate; and we are particularly sensitive to the fact that it is not just artists, but also broadcasters that are facing a difficult economic climate.  Rather than require all radio stations to pay fair market value to artists for the songs they play, the legislation includes special provisions for noncommercial and all but the largest commercial stations.  In addition, every radio station can use a statutory copyright license to transmit sound recordings, instead of negotiating licenses separately in the marketplace. 

Noncommercial stations have a different mission than do commercial stations and they require a different status.  Our legislation, appropriately, permits noncommercial stations to take advantage of the statutory copyright license subject only to a nominal annual payment to the artists. 

Similarly, we intend to nurture, not threaten, small commercial broadcasters.  Smaller music stations are working hard to serve their local communities while finding the right formula to increase their audience size.  We intend to foster the growth of these stations – nearly 85 percent of the radio stations in Vermont - and the legislation does that by also providing a flat fee option for use of the statutory license to the more than 75 percent of commercial music stations earning less than $1.25 million a year.  This payment may only provide minimal compensation to the artists whose music is used by the vast majority of commercial music stations, particularly when viewed against the fair market value of the music, but by helping radio stations grow, artists, the stations, and the public will all benefit.

I am an avid music fan and much of the music I enjoy I first heard on the 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. 

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 compensated fairly.  I will continue to work with the broadcasters – large and small, commercial and noncommercial – to strike the right balance. 

I ask unanimous consent that the full bill text be included in the Record. 

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Performance Rights Act of 2009
Section-By-Section

Sec. 1. Short Title.  This Act may be cited as the Performance Rights Act of 2009.

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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