musicfirstIt was reported yesterday that Performance Rights Act passed the House Judiciary Committee. For the bill, this was a major step. The Performance Rights Act legislation has direct opposition from an NAB backed bill that would keep terrestrial radio from having to pay royalties.

Upon passage of the Judiciary committee, Jennifer Bendal, the executive Director of the musicFirst Coalition, stated:

“We applaud Chairman Conyers and Committee members for their work on the Performance Rights Act and for supporting artists, musicians and rights holders in their fight for fair compensation when their music is used by AM and FM radio stations.

Our continued momentum in Congress is proof that it’s well past time to recognize the importance of fairly compensating the artists and musicians whose talent and hard work allows radio to generate billions of dollars in ad revenue each year.

Corporate radio’s days of hiding behind a loophole in the copyright law are over. For over 80 years, Big Radio has had a free pass to play music. All other music platforms – satellite, cable and Internet radio stations – pay artists, musicians and rights holders for the use of their music. It’s only fair that AM and FM radio be held to the same standards.

The Performance Rights Act will bring fairness to artists, musicians and rights holders and one that’s fair to radio and its counterparts. It also includes accommodations for small and minority-owned broadcasters. musicFIRST looks forward to the next chapter and to Congress to ensure that U.S. artists and musicians receive the performance right they deserve.”

Like all things in Washington, this issue did not pass without some compromise. Rainbow Push had pressured Conyers on the impact to minority owned radio stations. As a way of compromise and negotiation, the following proposal was put onto the table and passed:

Affordable payment for small, rural, nonprofit, minority, religious and educational broadcasters

  • Any station that makes less than $100,000 annually will pay only $500 annually for unlimited use of music
  • Any station that makes less than $500,000 but more than $100,000 annually will pay only $2500 (half of the amount in introduced bill) annually for unlimited use of music.
  • Any station that makes less than $1,250,000 but more than $500,000 annually will pay only $5000 (the amount in introduced bill) annually for unlimited use of music

Relief for current economic situation

  • No payment for 2 years by any station that makes less than $5,000,000 annually
  • No payment for 1 year by any station that makes more than $5,000,000 annually

Parity for all radio services

  • Establishes a “placeholder” standard to determine a fair rate for all radio services that will encourage negotiations between the stakeholders

Cannot hurt local communities

  • Assures that this legislation cannot affect broadcasters public interest obligations to serve the local community.

Assures consideration of relevant evidence

  • Evidence relevant to small, noncommercial, minority, and religious broadcasters and religious and minority royalty recipients must be considered by the Copyright Royalty Judges

Pressure was not only applied by Rainbow Push. there was also pressure from supporters of this legislation. Several minority and civil rights groups sent letters to Conyers, expressing their support for the Performance Rights Act. These include the Leadership Conference on Civil Rights, Pennsylvania Legislative Black Caucus, Rhythm and Blues Foundation and A. Phillip Randolph Institute.

The fact that Conyers was able to deliver a compromised solution puts pressure on the opposing legislation which seeks to maintain the current situation where no royalties are paid. While that competing bill currently enjoys more legislative support, campaigns will continue, and the new form of the Conyers Bill demonstrates a very reasonable royalty solution. The royalty issue will be interesting to watch over the coming months.