Last Week in Tech Policy Vol. 26: Fair Play, Fair Pay?

(by Molly Hogan, Colorado Law 3L)

Many of our discussions about the different aspects of technology law involve evolving technologies and how antiquated laws can be applied to situations that their drafters could not have fathomed. This week, I wanted to bring it back to discuss a debate surrounding a technology that is over 100 years old: the radio.

Despite the coming and going of records, 8-tracks, cassettes, CDs, and now MP3s and beyond, music fans have long been able to rely on the AM/FM radio to hear new music and old classics. Unbeknownst to most listeners is the fact that those artists whose songs play on the radio are not receiving copyright royalties for the airplay.

Under the Copyright Act, each recorded song contains one copyright for the sound recording itself, and another copyright for the underlying musical composition. When a song is played on the radio, Section 106(4) of the Copyright Act controls royalty distributions. This section specifies that only the musical composition copyright holder is owed royalties for a public performance—therefore, the musician(s) that perform a radio hit are not compensated for these plays unless they also contributed to the composition of the underlying work. The original justification for this split was that performers benefitted from the publicity gained by radio plays so much that a royalty was unnecessary; instead, the performer would get royalties through album sales and would likely profit from increased concert revenues due to a radio ‘hit.’

The radio royalty has played out in a number of strange scenarios since the Copyright Act’s inception. Michael Jackson bought the composition rights to the much of Beatles’ library in the 1980s (the Beatles were the primary songwriters on many of their hits, but had earlier contracted away those rights to their record label)—therefore, any time you heard “Yesterday” or “Hey Jude” on the radio during your childhood, Jacko received a cut while Paul, George, Ringo and Yoko got nothing. Similarly, as Dolly Parton wrote “I Will Always Love You,” the royalties went to her every time you heard Whitney Houston’s hit version of the song on the radio.

These stories may not garner a lot of sympathy as the Beatles and Whitney found other ways to make millions. The Copyright Act’s premise that performers benefitted from publicity in the form of increased album sales rang true until the late 1990s when Napster disrupted the musical landscape. Since then, with the advent of iTunes and now Spotify and Apple Music, artists have not been able to make as reliable of profits off of sales.

The way listeners consume music doesn’t seem to be changing—Spotify and Apple Music are here to stay, and my dad is the only person I know that buys physical albums. Therefore, musicians and lawmakers have attempted to create a royalty right where there has never been one before: by proposing an amendment that would require terrestrial radio stations to pay artists. This bill, the Fair Play, Fair Pay Act, was introduced earlier this year into both Houses with the goal of righting what Rep. Jerrold Nadler calls the “great injustice” that has existed since the beginning of the Copyright Act. Register of Copyrights Maria Pallante argues that the lack of performance royalty in the US is “indefensible,” and other proponents point out that China, Iran and North Korea top the short list of countries that do not compensate performers for radio plays.

While many artists are on board with this bill, the radio lobby is fighting back with its own piece of legislation. The “Local Radio Freedom Act” purports to keep radio the way it has always been in the United States—a tool that “inherently and uniquely advances the music industry by providing music discover and promotion.” This bill—actually a non-binding resolution not to act on changing the longstanding Copyright Act—gained a majority of the House’s support last month.

So, where should we stand on this debate? As a music fan, I worry about the inability for musicians to benefit from their craft. However, radio has always been a free and reliable way to learn about new music and hear old classics by simply turning a dial. Should copyright law be changed to adapt for the changing music landscape, or should artists be forced to adapt instead?