Here’s a thought experiment — imagine you own a restaurant that provides both dine-in and delivery services. However, due to an antiquated law, your customers were not obligated to pay for any food ordered from delivery apps. In either case (dine-in or delivery), the customer is getting the same product, but because the delivery mechanism was different, they won’t need to foot the bill. Clearly, your business is missing out on revenue to which it should obviously be entitled.
If this seems bizarre, you may be surprised to learn this is how we treat music currently. While streaming services, online platforms and even satellite radio stations are all required to pay music artists when they use their work, due to an outdated law, AM/FM “terrestrial” radio stations are not.
AM/FM stations can air all of the music content they want — and pocket significant profits from advertising sales in the process — without paying a single cent to the performers who created the recording and thus legally hold a part of ownership.
Back to the restaurant business, this would be akin to your delivery “customers” being able to take your food without paying and then sell that same food to somebody else for a handsome profit — all without sharing any of that money with you, the restaurateur who made it all possible.
It should go without saying that whether you stream a song on Spotify, listen to it on the radio, or buy an album from the store, the artists and music creators who produced those recordings should be appropriately compensated for their hard work in creating that product. This isn’t complicated. In fact, it’s Capitalism 101: If you use a good or a service provided by somebody else, you pay them for it. But that’s not what radio broadcasters are doing now. They’re free-riding on the backs of hard-working artists — to the tune of 714 million songs per year.
This status quo isn’t just bizarre. It’s downright wrong — and it’s been this way for decades.
There should be a level playing field — just as there is whether you dine in or order delivery and in virtually every other industry in America. And thankfully, U.S. Reps. Ted Deutch (D-Florida) and Darrell Issa (R-California), are leading a bipartisan effort to do so via the American Music Fairness Act.
This overdue piece of legislation will finally bring our laws governing radio royalties for artists into the 21st century, while enhancing America’s protections for intellectual property. As the holder of 30-plus patents himself, Issa is uniquely qualified to spearhead this effort.
In addition to leveling the playing field at home, the American Music Fairness Act would also unlock additional royalty dollars abroad and allow them to finally flow back to the United States. For years, foreign countries that do pay artists when their songs are played on the radio have withheld those payments from American artists, since we do not reciprocate. By finally updating our laws and paying all artists fairly for domestic radio airplay, our artists will finally be able to access the foreign royalties they’ve earned but haven’t received to date — bringing an additional $20 million per year back to the U.S. economy.
The American Music Fairness Act also seeks to protect local radio by including exemptions for small broadcasters, as well as college and noncommercial stations — ensuring that no truly local station pays more than $2 per day for all the music they need to play. This legislation isn’t a money grab on small-town radio stations, but an effort to ensure that large, profitable stations will finally pay for their product just like everyone else.
It’s time to end the free-rider problem in music — and this is the bill to do it.
Jon Decker is the executive director of American Commitment. He wrote this for InsideSources.com.