The group, comprised of Burgess, Colin Rushing, Chief Legal Officer for SoundExchange, Harvey Mason Jr., Chair and Interim CEO of the Recording Academy, urged Congress to recognize a terrestrial performance right for artists whose work is played on AM/FM radio and who are currently not compensated for it. Their pleas were opposed by a senior executive from the National Association of Broadcasters (NAB) and a so-called “small” religious broadcaster who is actually a senior lawyer at a radio mega-conglomerate that owns more than 100 stations.
Burgess stands in vocal opposition to many broadcasters, who insist that the promotion artists receive when their music is played on broadcast radio should excuse broadcasters from paying for the music they play, while satellite radio, streaming services, and internet radio do have to pay. Burgess also pointed out the extreme irony that just last year, NAB convinced Congress to strengthen their hand and make satellite television providers pay more for the content created by broadcasters – a move that stands in striking opposition to NAB’s refusal to support appropriate compensation for musicians and recording artists. Curtis LeGeyt, Chief Operating Officer of NAB testified at the hearing that radio stations want to “partner” with performers to provide career-boosting “promotional value.” Burgess disagrees.
“I don’t know of another industry that’s forced by law to hand over its primary product with zero compensation so that another industry can profit from it,” says Burgess.
Since 2016, Burgess has headed A2IM, an organization that works to elevate independent music and serves as a voice for the rights of independent artists and labels. Through ongoing education, advocacy, and networking, A2IM’s mission is to strengthen the independent music sector and ensure that a fair share of value created by independent music is returned to its rights owners and creators.
Especially during a time when musical performers are reeling from loss of touring revenue due to the coronavirus pandemic, Burgess and other advocates for music creators are speaking out for performers who are going unpaid even as their work is being broadcast on terrestrial radio.
See below for Burgess’s full written testimony.
“Chairman Tillis, thank you for convening this discussion and for allowing me to share the small and medium sized enterprise perspective of independent record labels and their recording artists regarding music rights under the Digital Millennium Copyright Act. Thank you also to Ranking Member Coons and the staff for members of the subcommittee for shedding light on this crucially important issue.
My name is Dr. Richard James Burgess, and I am the President and CEO of A2IM, the American Association of Independent Music, which is the voice of independent record labels.
COVID-19 has placed enormous strain on music creators of every genre, in every state. A2IM represents more than 700 record labels in 33 states, including Merge Records, founded in 1989, and operated out of Chapel Hill, North Carolina and Yep Roc Records based out of Hillsborough, NC.
A2IM members are true small businesses. More than 140 make less than 1 million dollars a year, and several dozen are sole proprietors.
Musicians are struggling more than they should during COVID-19. The sudden end to live gigs has exposed the so-called promotional effect of airplay for what it is: A simple denial of payment to musicians for the use of their work.
As you know, when the DMCA expanded the statutory license created by the Digital Performance in Sound Recordings Act of 1995 terrestrial radio was given a free pass. With the end of physical media sales and live touring stopped due to COVID-19, broadcasters can no longer claim to give value through promotion.
But before I speak more about A2IM’s views on the terrestrial performance right, I need to mention the harm done to music creators by the DMCA’s safe harbor and its notice-and-takedown provisions. The Digital Millennium Copyright Act was enacted in 1998 before social media and UGC. And it needs fixing. Many independent labels have given up on the onerous, whack a mole, Notice and Takedown process and the “safe harbors” are used in bad faith to short circuit free market negotiations.
All that said, the lack of a terrestrial sound recording performance right needs to be corrected because a zero-dollar price point creates an artificial floor that ripples through all sound recording licensing rates and is at the root of systematic undervaluing of music,
Despite the massive increase in the use of recorded music, revenues (In inflation adjusted dollars) are about half what they were 20 years ago. That’s what competing with free does to your market.
More than 10 billion dollars of advertising revenue generated by the U.S. terrestrial radio business came from music formats—79% of all revenue in 2018, which is more than the 9.8 billion dollars earned that year by the creators and owners of the music. I don’t know of another industry that is forced by law to hand over its primary product for zero compensation so that another industry can profit from it.
Our copyright system is built on constitutional mandate to promote the progress of science and useful arts. The enactment of the Music Modernization Act showed that compromise in music licensing is possible. The same should be true with the terrestrial sound recording performance right.
The NAB talks about localism and mom and pop members. But opposes a performance right on behalf of mega radio conglomerates that drive consolidation, layoffs, and regulatory power grabs that destroy localism.
The five largest radio conglomerates in the country own more than 1,900 AM/FM stations. The largest of these laid off, about, a thousand employees, including on-air personalities and DJs this year before COVID-19. And now, the NAB is arguing to raise the local radio ownership caps.
Local programming is plummeting, and these cuts homogenize airplay, and damage the development of regional acts that used to start out locally on the indie labels I represent. And, the biggest radio group, could soon be bought by the mega conglomerate that owns or controls SiriusXM, Pandora, Ticketmaster and LiveNation.
Most economically developed nations have a performance right. Foreign broadcasters pay royalties to performers. But because we lack a terrestrial right, American artists and record labels are denied an estimated hundred million dollars or more of foreign revenue every year.
It’s time for this unfair and exploitative practice to end, and for artists to be paid when radio plays their music, just as satellite radio, internet radio and streaming services do.
Congress strengthened broadcasters’ ability to negotiate better rates when their content is distributed on satellite television systems. Now my members need your assistance, and we are committed to help in finding a resolution."
*Photo by Alexandra Rosen via Billboard*