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The American Music Fairness Act and the Music Industry's Struggle over Change

Published onOct 31, 2022
The American Music Fairness Act and the Music Industry's Struggle over Change

Unlike large streaming platforms, radio stations are not required to pay royalties to artists, is their exemption warranted? Under Section 106(6) of the Copyright Act, an artist’s right to control the public performances of their sound recordings is limited to performances on “digital audio transmission[s].” According to the United States Copyright Office (“Copyright Office”) and the United States Patent and Trademark Office (“USPTO”), the definition of "digital audio transmissions" includes services that are “non-interactive, non-subscription digital transmissions such as the ad-supported services offered by Pandora and iHeart Radio.” Despite their similarities to covered services, AM/FM Radio Stations (“Radio Stations”) are exempted from Section 106 of the Copyright Act. In lieu of this discrepancy, members of the House of Representatives introduced the American Music Fairness Act (the “AMFA”) on June 24, 2021, calling for the “[i]nclusion of Terrestrial Broadcasts in [e]xisting [p]erformance [r]ight and [s]tatutory [l]icens[ing].” Thus, under the AMFA, Radio Stations would be required to pay royalties to artists, in addition to other copyright owners and songwriters, for the public performances of an artist’s sound recording. Since its introduction, and during its subsequent hearing in the House Judiciary Committee on February 2, 2022, the AMFA has incited passionate debates over changing Radio Stations’ unique exemption within copyright and licensing law.

 In opposition, radio broadcasters assert that Radio Stations’ unique relationship with artists and their integral position in local communities justify their exemption in current, controlling law. In a joint letter to the House Judiciary Committee from 50 different Broadcasting Associations, broadcasters argue the AMFA should not be adopted by the House in part because artists benefit from Radio Stations’ public performances of their work with free advertisement, airtime, and promotion. Members of Congress, in the Local Radio Freedom Act, agreed with the broadcasters that Radio Stations’ unique relationship with artists justified its current exemption, stating that “for nearly a century, Congress has rejected repeated calls by the recording industry to impose a performance fee on local radio stations for simply playing music on the radio and upsetting the mutually beneficial relationship. . . .” Importantly, the non-binding Local Radio Freedom Act gained support from the majority in both the Senate and the House, as of September 2022. Additionally, broadcasters argue that the AMFA’s proposed fees endanger the survival of local Radio Stations, who, in addition to providing free music, provide important local updates, offer job opportunities within the community, and are already burdened with specialized regulations.

 Supporters of the AMFA cite the recent shift in the music industry and artists’ severe financial losses as reasoning for amending the controlling statutes. In today’s music market, Radio Stations’ exemption creates an unjustified inequity, because, unlike in the past, sound recordings are now readily available on numerous listening services and thus a recording’s success is not dictated by radio airtime. As the USPTO and the Copyright Office notes, “[s]treaming services now account for approximately 79% of U.S. recorded music revenues,” therefore, Radio Stations’ exemption in copyright law is unjustifiable and unreflective of its position within the current market and culture.

 Further, artists suffer severe financial losses under current laws. For example, because American artists are not entitled to royalty fees in the United States, a stance in which the country is “alone among industrialized nations,” they are not entitled to other countries’ royalty fees for the public performances of their sound recordings. Therefore, the USPTO and the Copyright Office states that “American performers and record companies” are losing “approximately $200 million per year” in international royalty fees alone. Conversely, as Fran Drescher, current President for the Screen Actors Guild – American Federation of Television and Radio Artists (“SAG-AFTRA”), wrote in her impassioned Opinion Blog, the “antiquated loophole allows radio stations” to publicly perform an artist’s intellectual property without compensation, despite the industry amassing “$10 billion a year from selling advertisements. . . .”  Further, though the AMFA will require Radio Stations to pay additional fees, supporters note that it still accommodates local Radio Stations, implementing an equitable fee system that bases the Radio Stations’ fees on its yearly income, rather than a flat fee.

Despite being introduced to the House over a year ago, the AMFA remains in political limbo. However, as it continues to be discussed, the AMFA shines a spotlight on artists’ rights within the current statutory laws and fuels conversations for change within the music industry.

Mary Alexander Patterson is a second-year law student at Wake Forest University School of Law. Before attending Wake Forest University School of Law, she worked for the Aspen Music Festival and School as its Operations Manager. Mary Alexander received her undergraduate degree from Wake Forest University with a double major in History and Music Performance.

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