Performing Rights Act update

August 2009

On August 4, 2009 the Senate Judiciary Committee held a hearing to examine S. 379, the Performance Rights Act, a bill that would create a performing right in sound recordings for terrestrial broadcasts. Senator Dianne Feinstein (D-CA), who chaired the hearing, emphasized the importance of protecting and compensating artists and musicians whose works are performed on terrestrial radio. Through a statement, Chairman Patrick Leahy (D-VT) acknowledged the many contributions made by broadcasters and the need to protect smaller broadcasters but strongly urged them to come to the negotiating table. Senator Leahy added that, if the Performance Rights Act is passed, it is imperative that the income of music creators not be affected in any way by this new right.

The hearing featured testimony from several witnesses, both supporting and opposing the bill. Testifying in favor of the Act was recording artist Sheila E, representing the MusicFirst Coalition. She stated that recording artists, like all other American workers, should be remunerated for their labor. She maintained, as well, that she wanted minority-owned stations to thrive and that they should be given special accommodations to ensure that they were not disproportionately affected by the creation of a new right. Also speaking in favor of the bill was Ralph Oman, an adjunct professor at George Washington University Law School and former Register of Copyrights, and Marian Leighton-Levy, co-owner of Rounder Records.

Conversely, Steve Newberry, National Association of Broadcasters (NAB) Joint Board Chair and Commonwealth Broadcasting President/CEO, opposed the bill, arguing that radio has historically remunerated recording labels and artists through invaluable advertising and exposure at no expense. Jim Winston, Executive Director of the National Association of Black Owned Broadcasters, underlined the unique challenges faced by minority broadcasters, particularly with regard to negotiations with lenders and the cost of adjustments in radio monitoring practices, and argued that another expense would be detrimental to most stations. Bob Kimball, EVP of Real Networks, spoke in support of platform parity among the various audio formats.

During the hearing, it was noted that the United States, as one of a short list of nations that do not recognize the terrestrial performing right in a sound recording, is out of step with global practice. As a result, international royalties that would otherwise go the U.S. cannot be distributed.

The next step is a markup in both chambers of Congress which will likely occur in the fall.