Promote Act Gets Tepid, Concerned Responses From Music Industry Behind Scenes
The Performance Royalty Owners of Music Opportunity to Earn (Promote) Act's introduction last week stirred up the copyright community's long-simmering debate over proposals to require most terrestrial radio stations to begin paying performance royalties, lawyers and lobbyists told us. But the music industry treated HR-1914's underlying proposals with a behind the scenes response that has ranged from tepid to concerned, officials said. As filed by House IP Subcommittee Chairman Darrell Issa, R-Calif., and Rep. Ted Deutch, D-Fla., the bill would give performing artists the ability to opt out of having their music played by terrestrial broadcasters if the artist isn't being paid an agreed-upon royalty. The bill would require terrestrial royalties paid to artist be “identical” to those paid by nonsubscription digital services (see 1704060066).
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Several music industry groups responded with statements thanking Issa and Deutch for using the bill to call out the broadcasting industry for its resistance to enacting a terrestrial right, including RIAA and SoundExchange. Recording Academy Chief Industry, Government and Member Relations Officer Daryl Friedman said in a statement “the broadcast lobby’s bluff has been called. If corporate radio wants to stand by its argument of a ‘symbiotic relationship’ with artists, then they must support the PROMOTE Act, which lets the artist control their work on radio.” Those statements don't directly respond to the legislation's provisions.
The lack of outward enthusiasm for the underlying language reflects that “nobody in the industry is really excited about this bill,” said a music industry lobbyist. Issa is “clearly looking to solve problems” and he may be “a little annoyed” at the perceived stalemate between the music industry and broadcasters about the terrestrial right, but “he came up with a legislative solution that nobody seems to like,” the lobbyist said: “I think it ends up being more of a message bill” in line with the 2013 Free Market Royalty Act and the 2014 Protecting the Rights of Musicians Act. Like those bills, HR-1914 is aimed at “poking” at perceived hypocrisies in the broadcasters' arguments in opposition to bills like the Fair Play Fair Act (HR-1836) that would institute a terrestrial right, the lobbyist said.
Nashville Songwriters Association International Executive Director Bart Herbison agrees HR-1914 “creates a dialogue” on terrestrial right proposals “and that's a good thing.” From a policy perspective, the bill “would be concerning to American songwriters” because it would create another instance in which “songwriters wouldn't have control over their own destiny” by not giving them a say in whether a song is removed from circulation, he said. NSAI and songwriters strongly support proposals to create a terrestrial right but “everybody deserves fair payment,” Herbison said. Songwriters conveyed the same message to lawmakers, saying American songwriters would suffer under HR-1914's provisions. “This is a crunch time for everybody” connected with music licensing because the 115th Congress will be the final term in which House Judiciary Committee Chairman Bob Goodlatte, R-Va., will lead the committee's copyright legislative work, Herbison said: “It's a time when all parties really need to get down to brass tacks” on music licensing issues.
The bill can be viewed as a positive for the music industry because the first step toward having a defensible terrestrial right is for artists to have the ability to say no” to broadcasters unwilling to pay royalties, said music industry lawyer Chris Castle: “This bill could bring the conversation” over terrestrial right proposal “to a head” and that's important at this point in House Judiciary's work. Castle said it's not necessary for HR-1914 to benefit all music interests because songwriters are “squared away” on royalties. Songwriters would need to be concerned about HR-1914's provisions only “if they were harmed in some way,” but that isn't evident, he said.
The legislation “might add to the conversation” on the terrestrial right but “I'm not sure it promotes a good conversation” on the issue because in some ways it distracts from what should be a focus on HR-1836, a music lobbyist said. There are “compelling reasons” why HR-1836 should advance and the focus should be on how to convince the broadcasting industry to cooperate. HR-1914 “opens the door to ridiculous conflicts between the creators themselves and the companies that publish their music,” which is a “silly thing to be debating” at this point in House Judiciary's work, the lobbyist said. “I think many eyes are rolling over this bill.”
Issa's timing was problematic because it came amid the Recording Academy's Wednesday-Thursday Grammys on the Hill awards and lobbying event, seen as a prime opportunity for music interests to speak to lawmakers about their legislative priorities, said a music industry lobbyist. The intended focus had been to showcase HR-1836, which House IP ranking member Jerrold Nadler, D-N.Y., and House Communications Subcommittee Chairman Marsha Blackburn, R-Tenn., filed in late March (see 1703300064), the lobbyist said. Issa and Deutch are both co-sponsoring the bill. Although HR-1836 remained stakeholders' main priority in meetings with lawmakers, they also felt the need to address HR-1914 and that “muddled” their messaging, the lobbyist said. An Issa aide didn't comment.
Broadcasters like NAB have been basing their response to HR-1914 on their belief the “way it has the royalty system structured is unworkable,” said Fletcher Heald copyright and music licensing lawyer Karyn Ablin. Requiring terrestrial royalty rates to be identical to what webcasters pay “requires you to be able to measure the number of times a song is played,” but broadcasters “don't operate like that,” she said. The only way broadcasters can determine the number of listeners to a particular song is via indirect means, Ablin said.
Webcasters are also following HR-1914, though it “revisits an often discussed subject,” said Digital Media Association General Counsel Greg Barnes. “It would be easy for online music services to make the case for expanding the current system but we've attempted to remain above the fray on this topic,” he said. “Our primary focus is injecting greater transparency and efficiency into the current licensing process in a manner that would benefit consumers, copyright owners, as well as online distributors.”