The National Association of Broadcasters (NAB) has taken out newspaper advertisements claiming having to pay performers when playing their music is “bad for radio, bad for artists and bad for listeners”. The ads thank two senators for supporting the Local Radio Freedom Act (“freedom” to make more money to the detriment of those you exploit?), a resolution against a possible move to force radio to start paying royalties to performers and owners of sound recordings.
Though such legislation has yet to be introduced, the inequity American artists suffer when it comes to radio royalties has long been discussed among policy makers. A handful of countries around the globe don’t pay performers for radio play (the US being in the ‘distinguished’ company of Iran, North Korea and Rwanda). US radio does, however, pay royalties to the songwriters behind the song and their publishers.
Artists and music companies have long been campaigning for a change, but they’re up against a much more powerful lobby. The US radio industry pulled in $17.4 billion in advertising in 2011 alone – more than the entire worldwide record industry that year ($16.2 billion).
In its ad, NAB calls performance royalties a “performance tax” imposed by foreign-owned record labels on local radio. “Freedom,” “foreigners” and “tax” – they sure know how to frame their argument for the best result. They also claim it will reduce the variety of music stations play and stifle new artists trying to start their careers.
As someone who lives in one of the majority of countries that do remunerate featured and non-featured artists (the musicians playing on the record) for public performances, I’m puzzled by their claim.
First of all, as I spend considerable time in the US, Sweden and the UK (where I live), I conclude that paying broadcast royalties to artists does not reduce the variety of music. Matter of fact, the variety of music on Swedish and British radio is much broader than on US radio. Therefore I can’t see how it could stifle new artists trying to start their careers. Quite the opposite.
Second of all, half of the royalties collected go straight to the artist and non-featured musicians, so even if the artist is unrecouped, they still receive the royalties (this is already the case for online radio, which does pay royalties via Soundexchange). That’s not a tax – it’s a payment for use of ‘content’, in the same way radio pays its presenters and production companies.
But radio’s refusal to pay artists in the US does not only deprive artists of US income. As it also deprives foreign artists of income, the collection societies in their countries won’t pay performance royalties to US artists.
Any radio royalties collected in the UK for the performance of music made by American artists gets paid straight to the American label. “What happens with the money after that, we don’t know,” says UK collection society PPL. American artists who want to ensure they get their share of royalties may want to consider recording their albums in the UK, however – if they do, they’d be able to join PPL and get the 50% they’re due directly, just like British artists.
Meanwhile, Swedish radio pays sound recording royalties for all records they play – except American ones. They do, however, pay American performers and their labels for digital broadcasts, because Swedish artists get paid for digital broadcasts in the US. See how that works? This doesn’t mean that Swedish radio plays more American music than anybody else – in fact it plays a bigger percentage of domestic artists than any other European country does, according to a 2012 survey. As a result local artists grabbed more than 44% of all download sales in Sweden – by far the highest of all countries surveyed.
So how about US broadcasters get in line with the rest of us and pay artists? It’s good for radio, good for listeners – and it’s certainly good for artists.