Here Stephen Carlisle breaks down the significance of the Performance Royalty Owners of Music Opportunity To Earn Act, better known as the PROMOTE Act, which would give artists the ability to pull their music from radio stations should they not receive proper royalties from the sound recording.
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Guest post by Stephen Carlisle of Nova Southeastern University
Many times, I am asked to speak to student law associations and sometimes to artist associations. At these, there are frequent questions about the future of the arts in the era of unfettered internet exploitation. My response is usually in the form of a question:
“Did you hear that?
(Silence)
“Let me ask you again…did you hear that?”
(More silence and murmurs of confusion)
“That’s the sound that Spotify makes when it has no content.”
Which brings us to an Act introduced by Congressmen Darryl Issa and Ted Deutch on April 5, 2017. 1 The bill, informally known as the Performance Royalty Owners of Music Opportunity To Earn Act (PROMOTE Act) and more formally known as HR 1914, would for the first time create a legal right for the owner of a sound recording to pull their recordings from terrestrial radio airplay.
The bill itself is not complicated, running a mere 4 pages. It creates an addition to the exclusive rights contained in 17 USC 106, a seventh right, namely:
“[T]o prohibit performance of a sound recording publicly by means of a broadcast transmission (as that term is defined in section 114(k)) by a terrestrial radio station.”
However, that right may not be exercised if the following occurs:
“An owner of copyright in a sound recording may not exercise the exclusive right under paragraph (7) of section 106 to prohibit the broadcast transmission of the sound recording by a terrestrial radio station with regard to—
(A) a terrestrial radio station that pays the applicable royalties under terms described in paragraph (2);
IF AND ONLY IF:
[T]he royalties and terms described in this paragraph shall be identical to those regarding a license for eligible nonsubscription transmission services for audio transmissions under subsection (f)(2).”
For those of you non-lawyers amongst my faithful reading public, this means that a regular, over-the-air radio station must pay to the owners of a sound recordings a royalty equal to that which is paid by Pandora and similar services. If the radio station refuses to pay the money, the sound recording owner gets to pull their sound recordings from airplay.
Sheer genius, I tell you. To quote the sponsors:
““The PROMOTE Act calls the bluff of both sides in the debate over performance rights.” 2
And,
“We have been told for years that AM/FM radio provides valuable promotion to recording artists, but those artists have never been given the opportunity to decide for themselves. It should be the artist’s choice whether to offer their music for free in exchange for promotional play, or to instead opt out of the unpaid use of their music.” 3
Precisely. This is a frequent argument floated over the internet that artists should be “thankful for the free exposure” instead of complaining about piracy. All of this ignores the fact that as an artist, shouldn’t it be my choice, when and under what circumstances I give away my art for free? Instead, the internet tells you that you will take my work for free if you can and thumb your nose at me when I object to your unjust enrichment at my expense.
So, if you think the “free promotion” is worth it, keep your records spinning. If you think it gets airplay because it’s a good song, or it’s YOUR good song, you might want payment for it.
After all, how many times do you hear the DJ say:
“Next up is a mediocre song and we’re not going to tell you who it is.”
As opposed to:
“Next up, we’re going to spin the latest incredible song from Taylor Swift!”
Dog wags tail? Or tail wags dog?
Make no mistake. The radio broadcasters have long extolled the virtues of radio airplay as aiding sales of recorded music. Take the conclusion of this 2008 study:
“This study clearly demonstrates that radio airplay increases music sales and that performing artists and record labels profit from exposure provided by radio airplay. Findings demonstrate that a significant portion of music industry sales of albums and digital tracks can be attributed to radio airplay – at minimum 14 percent and as high as 23 percent. These results show that radio is providing the record industry with significant, incremental sales revenues or promotional sales benefit that ranges from $1.5 to $2.4 billion annually.” 4
This is also borne out by the practice of “payola,” where a radio station would take money (or as lawyers like to say “other good and valuable consideration”) in order to play a certain record on the radio. Sometimes these favors were taken to the extreme, such as when DJ Allan Freed received a songwriting credit on Chuck Berry’s “Maybelline,” even though he had nothing to do with composing the song. 5
But this obscures the fact that the payola phenomenon is largely the product of radio stations that play new releases. Why do people tune into “classic rock” radio? Because they know they’re going to hear familiar material, and the radio station serves it up willingly to capture the audience. Same thing for radio stations that play classical music. It’s not like the DJ is going to say “Hold everything! We’re going to play this great undiscovered track from Sibelius!”
Or ask yourself this question: why do radio stations change formats? Because the music they are playing does not generate enough revenue to suit the owners. They then figure that by playing a different kind of music, they might attract a bigger audience. So, the real crux of the entire argument is this: people listen to your radio station because they like what songs you play, not because your radio station is some bright shiny new smartphone that everyone wants.
So let’s say that Universal Music Group, Sony Music and Universal all choose the nuclear option, and pull their recordings from any station unwilling to pay. These three companies constitute 87% of the US music marketplace. 6 Surely some artist will rush in to fill the void in return for the “free promotion.” But who? Because you’d have to say bye-bye to Adele (who by herself accounted for 3% of all album sales in 2015). 7 And Ed Sheeran. And Bruno Mars. And Maroon V and…well, you get the picture.
If your radio station can’t play songs by those artists, and the other stations can, how do you expect to compete?
So, in the end, isn’t it the songs…not the station?
Which brings us to the internet. The internet, in and of itself, does nothing. NOTHING.
All it does is provide a way for you to get content you want. It’s the CONTENT, not the WIRES, that is the true value.
If you want to buy a book, you might go to Amazon. But not if you wanted to buy a car. Because Amazon doesn’t sell cars.
When you get right down to it, Google is nothing more that the Yellow Pages. Yes, a faster, slicker, quicker and more comprehensive version but…it’s the Yellow Pages. Think of it… back in the day…if you needed something, say, a new dishwasher, you went to the Yellow Pages and using that magical thing called a “keyword” you looked up the word “dishwashers,” and you would get a couple of pages of local businesses that sold dishwashers.
See if this sounds familiar:
There’s this amazing new product. It’s delivered to you free of charge. It will enable you, without leaving the comfort of your home to find businesses that are selling products that you might want, and provide an easy way to contact them. How does this amazing new product make money if it’s given away free? Well the creator of this product sells advertising, and the people who pay more money get more prominent placement.
Google? Or The Yellow Pages?
Nobody uses the internet unless there is a website on the other end that might have something they want to buy, or listen to, or read. It’s the content. Not the wires.
Even further, I have been forwarded articles by heads of libraries and library associations that take an aggressive stance against copyrights and the rights of authors. This is backwards.
The reason someone wants to visit your library is because you have books. More specifically, they will visit your library only if you have books they want to read. These books are created by people called authors, who work long and hard at their craft. They do not magically appear on your shelf after a visit from the book unicorn. Your library exists because someone first sat down and put pen to paper, fingers to typewriters or fingers to keyboards.
No one is going to visit your library unless you have something they want, be it a book, DVD, or CD (or to use the free internet perhaps). The main attraction will always be content created by people outside the library.
No one is going to pay to attend your university unless you have a teacher who will teach them something they want to learn.
No one is going to visit your website unless you have something they want on it.
No one is visiting your movie theater unless you have something they want to see.
No one is signing up for your cable TV service unless you have something they want to watch.
No one is going to listen to your radio station, or streaming service, unless there are songs on it they want to hear.
The people that create this content, the content that drives the traffic to your business, in other words, authors, musicians and artists, only want to be fairly compensated. If you don’t want to pay that price, fine.
Enjoy the silence.