Whenever I tell someone that recording artists aren’t paid when their songs are played on AM/FM radio, they are surprised. Yet, it’s true: not a single performer has ever been paid a performance royalty by American broadcasters for analog radio.
Unfortunately, that’s only half the story. When U.S. broadcasters, including iHeartMedia, Audacy, Cumulus Media, and others, refuse to pay for AM/FM radio plays, it is a double whammy. First, it denies thousands of hard-working Americans the full ability to make a living from their craft.
Second, this denial is used as an excuse by many countries around the world to withhold payments to U.S. artists when their music is played overseas. European countries typically pay royalties to foreign artists, but some use U.S. broadcasters’ refusal to pay for AM/FM radio plays as an excuse for denying those royalties to American artists. Given that American music is the most popular in the world, this amounts to hundreds of millions of dollars in lost income for American creators – every year.
Think that’s bad? It gets even worse. Some countries (such as France) do collect royalties on behalf of Americans, but that money never gets to the rightful recipients in the United States. Instead, they divert it towards their local artists or to fund local “cultural” programs. SoundExchange and others are currently in French courts trying to remedy this egregious practice.
Fortunately, some progress is being made. In 2020, the European Court of Justice (ECJ) ruled that all artists, regardless of nationality, should be paid when their music is played in Europe. They cite a principle called “National Treatment,” in which a country must treat foreigners with the same laws they treat their own citizens. It’s an important principle: imagine if the United States denied a foreign national the right to a fair trial simply because their home country doesn’t provide those protections.
In reaction to the ECJ decision, France and others are seeking to limit its impact so they can keep diverting royalties away from American artists for their own cultural funds. The Fair Trade of Music coalition is fighting to ensure that Europe does the right thing and treats artists equally, regardless of nationality.
This battle to protect American interests in Europe has been fought for a while, but the problem could be solved instantly if Congress passed the American Music Fairness Act, legislation to finally grant recording artists a performance right for AM/FM. The notion of paying artists for radio play already exists in the rest of the world and also exists in the U.S. for streaming services (such as Spotify or Sirius XM). The fact that the House Judiciary Committee is expected to consider the legislation on Wednesday is a sign that it’s gaining momentum as Congress completes its work. The legislation lays out a fair approach: it requires billion-dollar corporations to pay their fair share for music. It also protects small broadcasters and college radio stations that would have to pay (at most) only $500 a year (less than $2 per day). The smallest of broadcasters are capped at $10 a year.
Corporate broadcasters argue that a “mutually beneficial relationship” exists between AM/FM radio and music creators. Yet their actions belie that claim, as they spend millions to fight this legislation and avoid sharing the billions of dollars they make in advertising from music. In the past year, the NAB and iHeartMedia have spent over $11 million in lobbying alone. Broadcasters are even using their own federally-granted airwaves to run ads opposing the legislation while ignoring calls to give artists equal time to run their own ads. I guess it’s too dangerous for listeners to hear both sides of the story.
It’s important for Congress to act now. The House Judiciary Committee is considering the bill this week. With the passage of the American Music Fairness Act, artists would finally get paid for their music being played on AM/FM radio in the U.S., and it would remove the excuse for other countries to withhold their royalties from Americans. By recognizing the value of their work here at home, the United States can unlock hundreds of millions of overseas dollars for artists.
Most importantly, it’s simply the right thing to do.
Michael Huppe is president and CEO of SoundExchange.
