by : March 2008, Music Law

Copyright law as it relates to Performance Rights

The moment has finally arrived; your first hit song was just played on the radio station! Unfortunately, only the songwriter (if that’s not you) and the publisher will be receiving a royalty payment for the airing of your performance over the terrestrial radio airwaves. This narrow exemption within copyright law exemplifies how important it is for the new artist to understand licensing when negotiating contracts with their publisher and promoter.

 

But change may be in the air – radio airwaves, that is. In 2007 both Houses of Congress introduced legislation that would extend for the first time, protection and a royalty obligation under the “performance right” section (§106) of the Copyright Act, as applied to terrestrial radio stations. The protection and royalty obligation would close the remaining exemption – the playing of a sound recording over the air waves of terrestrial radio. All sound recordings played on either internet / cable / or satellite radio are already covered by the 1995 Digital Performance Right in Sound Recordings Act (DPRA) or the 1998 Digital Millennium Copyright Act (DMCA). Royalty obligations are established by the Copyright Royalty Board for these type transmissions.

 

The reason for the lack of copyright protection for sound recordings played over terrestrial radio is based in the history and development of the music industry itself. When the Copyright Act of 1909 was passed by Congress, there were no recording artists, and the fledgling music industry was focused on the sale of sheet music, such as the famous marches of John Phillip Sousa, not recorded music. In fact, Sousa held “a very low opinion” of the emerging and upstart recording industry in 1906 when he testified before Congress that, “these talking machines are going to ruin the artistic development of music in this country.” Despite this original position, both Sousa and the recording industry found sound recordings to be popular, and marketable in the mid twentieth century.

 

Nonetheless, it took sixty-three years (1972) before “sound recordings” became copyrightable under Federal Law. But at the request of the powerful radio broadcaster’s lobbyists, the performance right protection under copyright law was specifically excluded for sound recordings played over terrestrial radio. The exemption, which greatly benefited radio broadcasters, was granted on the argument that the “free” playing of records facilitated sales of records, thereby indirectly benefiting artists and record labels.

 

Congress promised to revisit the “exemption” with the overhaul of the Copyright Act in 1976. That Act, however, did not change the “exemption” and it was not until 1978 that the Copyright Office even recommended to Congress a full performance right for sound recordings, no matter where the sound recording was played. And to this day, except for the extension of copyright protection under the DPRA and the DMCA, sound recordings played on terrestrial radio stations remain exempt from any royalty obligation under §106 performance rights.

 

Musical Works and Sound Recordings are two of the eight works of authorship that have protection under copyright law. A “musical work” is the musical composition inclusive of both lyrics (if any) and the actual musical composition and arrangement. Songwriters and music publishers are entitled to copyright protection for their “musical work.” A “sound recording,” on the other hand, is the fixation of a series of musical or other sounds (including narration or spoken word) in a work. The performer, producer, or record company can claim copyright protection under the “sound recording” category of copyright law.

 

The collection of royalty fees, under an established statutory scheme, is often performed by the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and The Society of European Stage Authors and Composers (SESAC). Both categories (musical works and sound recordings) are works of authorship and have copyright protection, but it is “sound recordings” that presently are granted only a limited copyright protection.

 

With the legislation to expand the “sound recording” protection before Congress (2007), the Registrar of Copyrights was called to testify before the Subcommittee on Courts, the Internet, and Intellectual Property, under the Committee on Judiciary of the United States House of Representatives last summer. Having taken the position for full protection for all sound recordings as early as 1978, there was little doubt which side the Copyright Office would take. The only issue now seems to be how much weight Congress will continue to give to the radio broadcast lobbyists argument. That argument continues to say, free airplay by terrestrial radio promotes record sales for the artist and record company and any further obligation to pay additional royalties could impair that balance in the marketplace.

 

At a March 2008 conference in Santa Monica, CA by the California State Bar entitled – “Public Performance Rights for Sound Recordings: An Evolving Legal Environment” the proposed legislation and the arguments for and against a change to the copyright law were argued by key music industry players like, Mitch Glazier (EVP of RIAA), Jonathan Potter (EVP of Digital Media Assoc), Jay Cooper (LA power lawyer at Greenberg Traurig), Suzanne Head (representing the National Association of Broadcasters and 1200 radio stations) and Jerry Del Colliano (ex radio broadcaster – WBIG, now Director of Executive Programs in Music Industry at the University of Southern California).

 

After a strong presentation to extend copyright protection and collect royalties by both the RIAA representative and Mr. Cooper, Mr. Del Colliano, who teaches music business at USC, stunned the audience when he said, “Radio and the record industry are dead!” “My students, the Y generation, have no interest in radio; they want to be their own program manager. Music should be free, social networking is what matters.” As the discussion drifted from the specifics of the performance right to the general state of the music industry, the opposition responded by arguing that “property must be protected and it is the creator who should decide if it (the music) is free.” Del Colliano shot back, “the kids I see everyday are not concerned with stealing music, and the artist does not get the money anyway!”

 

Suzanne Head (representing the NAB) attempted to convince the audience of the power and importance of radio when she argued that, “there are 230 million daily listeners and that radio is king – radio airplay is the Holy Grail.” Jay Cooper reminded everyone that, “radio uses music to get listeners, and listeners provide advertisers who beget the broadcasting industry $16 billion annually, while only paying 3% for the content.” Cooper emphasized that as long as broadcasters are making money, they should pay for content. He said, “All other music (except recording) has a performance right!” He further noted, “A song without a performer is nothing but a piece of paper, it is fair that they be paid.” Mitch Glazier added, “You have to be able to control your product.”

 

Colliano again grabbed the audience of intellectual property attorneys when he said, “you can not control the delivery system anymore. If we could control everything in this world, we would be the record and radio industry of the past. Subscriptions will not work with generation Y….we are fighting over the carcass, like a vulture!”

 

This debate will continue for some time, as the proposed legislation is unlikely to be passed by this Congress given the upcoming election season. The issue, however, will not fade away given the heated debate by music industry leaders at the recent California conference, the issue of performance rights is just another catalyst for the much larger debate about the rapidly changing overall music industry. The lack of performance right protection under copyright law for terrestrial radio seems antiquated in a digital world. Does it really matter anymore? Is terrestrial radio dead? Is the debate only about the remains of a carcass? By the way, there are three other countries besides the United States that do not recognize the sound recording performance right – China, Iran, and North Korea; just a thought!

By Ashley Griffith

Comments

Leave a Reply