"Fair Play Fair Pay" Act and Its Implications on the Music Industry
Julia Singer (1L Delegate Alumni)
A bill has been introduced to Congress that has the potential to change the way that musicians and songwriters make money for their work. The “Fair Play Fair Pay” act was introduced in March and has been gaining momentum ever since. The act will amend federal copyright law so that copyright owners of sound recordings will now receive royalties for non-digital audio transmissions of their recordings through AM/FM radio. As hard as it is to imagine, the current copyright law only allows for royalties to be paid through digital transmissions, which occur when recordings are played through cable, satellite, and Internet radio stations. Previously, there has been absolutely no requirement for royalty payments made for FM radio airplay, aside royalties to songwriters. Due to the fact that FM radio is still the leading way that Americans listen to music, this will have an enormous monetary effect on the copyright owners.
The problem lies with the fact that musicians are not always the owners of their digital recordings. Labels often maintain copyrights for the recordings themselves and are able to receive these royalty payments. Resulting in labels contracting the percentage of profit that artists receive in this new revenue stream. While independent artists do not have the economic backing of a major label, they do benefit from ownership rights to their sound recordings and increased control over their royalties. Another problem this bill has encountered is assigning a monetary value for plays. Spotify has encountered an enormous amount of backlash for the small royalty payments it makes to artists. Therefore, it is likely that the royalty rate of these payments may take some negotiation.
Although the bill has been gaining momentum, it has encountered some problems as well. It currently has the support of 21 house members but is being opposed by the National Association of Broadcasters, which has a considerable amount of power. Although the United States is currently the only major country in the world not paying royalties for terrestrial radio, the association still believes that this type of bill will considerably hurt the radio industry. In their argument, they try to establish the rights granted in the “Local Radio Freedom Act” which is a nonbinding act without any legislative power that states that radio stations should not be charged for airplay. Obviously, this argument has not been very persuasive. The implications of this bill will not only include enormous revenue for artists but also, an incredible amount of newly taxable income; incentivizing Congress to pass the bill. This bill will create new revenue for an industry that desperately needs it, holding radio stations accountable for benefiting from others’ work.