Closing the AM/FM Radio Royalty Loophole

Closing the AM/FM Radio Royalty Loophole

SoundExchange President & CEO Michael Huppe with artists and other musicFIRST Coalition Members.

SoundExchange President & CEO Michael Huppe with artists and other musicFIRST Coalition Members at the Fair Play Fair Pay Act Bill Launch Event, April 13, 2015.

SoundExchange supports legislation to close the decades-old loophole that allows AM/FM broadcasters to avoid paying royalties to recording artists and record labels when their recordings are played on the air. SoundExchange and members of the musicFIRST Coalition are fighting to end this injustice.

AM/FM broadcasters are the only form of radio today that doesn’t pay performers for their work. Digital radio sits alongside terrestrial radio on dashboards and in homes – yet those modern innovators pay for the music they use while AM/FM broadcasters pay nothing, even when their broadcasts are played through the same speakers to the same audience.

Instead, the reality is that AM/FM radio – terrestrial broadcast radio – uses music to draw an audience that in turn allows broadcasters to bring in $14.5 billion/year of revenue from advertising. While paying nothing for their primary product!

Adding to the injustice of the existing system is the fact that the impact of this unfair treatment doesn’t stop at the U.S. border. American music is by far the most popular music in the world. However, because U.S. radio broadcasters refuse to pay artists when they use their recordings on the air, American artists and record labels are denied the estimated $200 million in performance royalties annually that would be paid to them in nearly every other nation. Instead, that income is left on the table overseas and never makes it back to the U.S. economy.

When the Fair Play Fair Pay Act of 2017 (H.R.1836) was reintroduced by a bipartisan group of lawmakers led by Ranking Member Jerrold Nadler (D-NY) and Congressman Marsha Blackburn (R-TN), it included a provision to create a performance right for sound recordings on terrestrial radio. The Fair Play Fair Pay Act was originally introduced in 2015 as H.R.1733 – it had 42 cosponsors by the end of the 114th Congress in 2016. In 2009, the Performance Rights Act (H.R.848 & S.379) was introduced in both the House and Senate – it was successfully marked up and reported back to the House Floor before the end of the 111th Congress in 2010.