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Tuesday, February 10, 2015

Copyright Office Endorses Radio Performance Tax


The Government Copyright Office released a roughly 200-page report outlining recommendations for changes to copyright law on Thursday. The recommendation that has the most wide-reaching ramifications for broadcasters: The Copyright Office is recommending expanding public performance rights in sound recordings to include terrestrial radio broadcasters.

The report states that the Copyright Office believes the exemption of terrestrial radio from royalty obligations harms competing satellite and Internet radio providers, who must pay for the use of sound recordings. The report continues, "Assuming Congress adopts a terrestrial performance right, it would seem only logical that terrestrial uses should be included under the section 112 and 114 licenses that govern Internet and satellite radio."

Other recommendations include:

Federalizing pre-1972 recordings, currently protected only under state law, should be brought within the scope of federal copyright law.Regulating musical works and sound recordings in a consistent manner. In the digital realm, sound recordings and the underlying musical works should stand on more equal footing. Offering a free-market alternative to musical work owners, in the form of an opt-out right  from government oversight. Namely, interactive streaming uses and downloads.Adopting a uniform market-based ratesetting standard for all government rates. Calling for adoption of a single rate standard, whether denominated "willing buyer/willing seller" or "fair market value," that is designed to achieve rates that would be negotiated in an unconstrained market.

The Copyright Office is essentially recommending that publishers and other rights owners should have the power to control their own destiny regarding streaming rights.

ASCAP President Paul Williams responded to the report with the following statement: "The current music licensing system needs reform and fast. The report emphasizes how the current system undervalues musical works -- something many of our members experience daily. The many proposed updates -- particularly recommendations intended to make the system more equitable for songwriters -- underscore yet again the inefficiency of the current system for music fans and creators alike."

The NAB released the following statement on the Copyright Office Music Licensing Report from NAB Executive Vice President of Communications Dennis Wharton: "As it has for decades, the Copyright Office proposes music licensing recommendations looking only through the lens of copyright owners. What cannot be denied is that the U.S. music industry is the envy of the world, aided by a legal framework that enables 244 million listeners to enjoy free and local radio every week. We're pleased that Congress recognizes the unparalleled promotional value of broadcast radio, and has rejected a punitive new fee on local stations. NAB will review this sweeping report and engage both Congress and the Copyright Office as they consider policies that recognize the interests of consumers and innovators."

On a related issue, NAB released the following statement from NAB Executive Vice President of Communications Dennis Wharton on Thursday, regarding the introduction of the Patent Reform Bill (Innovation Act of 2015): "NAB applauds House Judiciary Committee Chairman Robert Goodlatte (R-VA) and his colleagues for their introduction of bipartisan legislation that advances the cause of patent reform. Broadcasters support legislative efforts to curb abusive patent practices that harm our nation's economic growth and cost jobs. We look forward to working with Chairman Goodlatte and other congressional leaders to improve our patent system."

(2/6/2015 9:33:46 PM)
Opportunity. Wherever there is change, this is opportunity. Artists who really want exposure will step forward and offer radio stations a 'deal' to play their music. This will especially be true in the smallest markets. This could be the biggest boon for independent artists and labels in the modern era.
Yes, oldies and classics stations may dwindle, but that's happening anyway (due to the aging of the demo).
This could usher in a whole new era of musical diversity on the air.
(2/6/2015 2:08:48 PM)
Chris...not relevant in regard to your "stop whining" comment. Terrestrial radio has always paid licensing fees to ASCAP/BMI/SESAC. "We sell records" is disingenuous, propagated by those without knowledge of how broadcasting works.

What this will do is effectively quintuple (or higher) those license fees.

How about we add another $2 per gallon tax to your gas, because the tax you're paying isn't fair to all those construction workers? then let's require a licensing fee for those roads.

(2/6/2015 10:08:01 AM)
Looks like Flo and Eddie have been spending those Turtles royalties like mad.
(2/6/2015 9:12:07 AM)
This will kill radio long before streaming or satellite ever have a chance. The industry will have to go all talk. I wonder what that would do to music sales?
(2/6/2015 8:55:45 AM)
I don't mind paying a fair price for intellectual property that helps me make money. I already do with everything from air talent fees to hiring the best management and sales talent. True, the "we help sell records" model fell apart years ago -- but it certainly was a nice ride. It was the "fair" thing to do back then. Stop whining radio. Times change and stuff happens.

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