June IP Breakfast Club Debates Performance Right

WASHINGTON June 16, 2011- Broadband Breakfast gathered leading experts Tuesday to discuss a performance right for broadcasting at the June installment of the Intellectual Property Breakfast Club.

Under current copyright regulations, when a song is played on terrestrial radio the writer of the song gets paid fee called a broadcast royalty. The singers and musicians that perform the song, however, get no such payment. Performance royalties are paid to singers from web-based radio stations along with cable companies that offer music channels.

Broadband IP Breakfast: A Performance Right for Broadcasting: Will Radio Begin to Pay?

David Oxenford, partner at the law firm of Davis Wright Tremaine, LLP explained that since web broadcasters were unable to band together and work out a single royalty rate, each individual broadcaster must make its own deal with SoundExchange, the organization which collects royalties. Generally, web broadcasters pay roughly one fifth of one penny per song per listener as a broadcast royalty according to Oxenford.

“Last year we paid nearly $600,000 in royalties for performers and we are a small station,” said Brian Gantman, Government Relations Director for the Education Media Foundation that runs AIR 1 Radio Networks. “Pandora, one of the most popular web radio stations had a loss of $6 million due to the high cost of royalties it had to pay out.”

Sylvia Strobel, Executive Director of the Alliance for Community Media explained that a number of Native American web stations have been forced to shut down due to their inability to pay royalties.

“This is music that wouldn’t get out there if not for these stations, but they just cannot afford to pay the royalties,” Stobel said of these Native stations.

Many musicians have requested that broadcast royalties be extended to the performers since they contributed to the value of the song as much as the writers did. Those in opposition claim that the playing of the songs on the radio acts as a method of promotion for performers who then earn royalties from the sale of records and ticket sales at concerts.

“Of the 30 countries that make up the Organization for Economic Co-operation and Development 29 of them have performance rights,” said John Simson, former Executive Director of SoundExchange. “The United States is the only nation which does not give performers the right to obtain royalties from their performances.”

Gantman went onto say that if Congress passed a broadcast royalty for terrestrial radio, nearly a third of minority owned stations would have to cease operations due to their inability to pay the royalties.

Gantman also responded to Simson’s comment, saying that in many other counties, the governments provide subsidies to the radio broadcaster which allow for the payment of royalties.

Simson acknowledged that radio does act as a method of promotion and some performers may choose to not request a royalty payment but stated that performers should be given the choice.

Many other nations also refuse to remit performance royalties to American performers because the U.S. does not collect such royalties.

“In France while the royalties are collected for the performance the portion of the fee which would be given to the performer is instead given to fund cultural programs,” said Simson. “This leaves millions in revenue which the performers do not collect.