House Judiciary Committee Chairman Jerrold Nadler today delivered the following remarks, as prepared, during a markup of the American Music Fairness Act (H.R. 4130):
 
“Imagine a profession in which you put in countless hours to create a product that is appreciated by millions of people, but while major companies can generate significant profits distributing your product, those companies pay you absolutely nothing for your efforts.

“This may seem unthinkable, but it is the reality for American recording artists and musicians when their music is played on AM/FM radio.  They do not receive a penny in exchange for the broadcast of their performances, even though the large broadcasting corporations playing their music take in billions of dollars every year from advertising. 

“This unfairness exists because our copyright laws recognize a public performance right only in digital audio transmissions, rather than in all audio transmissions.  Thus, while other music platforms, like satellite radio and digital streaming services, do pay artists and musicians when they play music, AM/FM—or “terrestrial”—radio is allowed to use and to profit off the performances of these artists for free. 

“As a result, American artists have been denied the fair compensation they are due when terrestrial radio uses their creative work.   It is time for this fundamental unfairness finally to be fixed.

“H.R. 4130, the American Music Fairness Act, is a bipartisan, bicameral bill that provides a long-overdue legislative fix for this problem.  The bill does this by expanding the scope of public performance rights in sound recordings to include terrestrial broadcast performances.

“The bill specifies that the public performance right encompasses any “audio transmission”—rather than merely a “digital audio transmission,” as currently worded.  By expanding the scope of existing public performance rights in sound recordings to all audio transmissions, the bill requires terrestrial AM/FM radio stations to secure a license to publicly broadcast a copyright-protected sound recording. 

“Under this legislation, terrestrial radio stations would use the same royalty payment system that satellite radio and digital streaming services already use:  an existing non-profit licensing collective that is required to split the public performance royalty—as set by the Copyright Royalty Board—among the copyright owners, featured artists, non-featured musicians, and non-featured vocalists.

“Virtually every other industrialized nation recognizes some form of public performance right for artists.  The United States is among only a handful of nations—including Iran and North Korea—that do not.

“And because our copyright laws fail to provide a public performance right for AM/FM radio broadcasts, American recording artists also miss out on royalties when their music is played on the radio overseas because of this lack of reciprocity.  American music is extremely popular world-wide.  And, as you can imagine, the collective amount of money our artists lose out on is remarkable.

“Large broadcast corporations have criticized this bill, arguing that they should not have to pay a public performance royalty because their airplay provides promotional value to the artists and musicians.  Although these arguments are dubious, H.R. 4130 specifies that, when determining the royalty rate, the Copyright Royalty Board must base its decision on economic, competitive, and programming information presented by all the parties—including information relevant to whether the radio station’s service in broadcasting the sound recording enhances the copyright owners’ and artists’ other streams of revenue.  

“The Judiciary Committee has also heard the concerns of local and public radio:  they argue that they would suffer—and perhaps would have to close their doors—if they had to pay these public performance royalties. 

“Of course, we recognize the unique and vital services local and public radio stations provide to so many of our communities throughout the United States.  That is why this legislation protects these small radio stations by excluding them from paying what the large broadcasting corporations would be required to pay. 

“Instead of paying into the royalty payment system like the large broadcasting corporations, these small, local and public radio stations will pay an affordable, predictable flat licensing fee to play unlimited music, ranging from just $10 per year for the very smallest stations earning less than $100,000 per year up to $500 per year for certain broadcast stations earning between $100,000 and $1.5 million—unless they are owned by a parent company making over $10 million/year. 

“It is unquestionable that music plays a key role in our lives:  we celebrate the happiest events, and we endure the saddest tragedies with music.  Our religious rituals, cultural events, and social activities would not be the same without music.  Simply put, music is vital. 

“And those artists and musicians who bring music to us through performance should be fairly compensated for their work.  The American Music Fairness Act goes a long way in ensuring that.