This Sunday is the biggest night in music, when stars including Alicia Keys and Post Malone grace the Grammy stage. But when the show is over, the curtains are drawn, eyeliner is removed, and leather slippers are put away — it will be back to work for thousands of music creators.
This year, more than in those past, promises to be more financially rewarding. Indeed, 2018 was a banner year for reform as the Music Modernization Act (MMA) was signed into law. While it ushers in many important changes, there is still progress to be made towards making sure artists are compensated fairly.
Missing from the MMA is a provision that would ensure that artists are paid when their music is broadcast on terrestrial radio. In the developed world, the United States is alone in that artists don’t receive performance royalties from AM/FM stations (however, songwriters and publishers receive an income stream). Every time that you hum along to your favorite song on the radio, the artist typically receives nothing for their intellectual property. This costs artists as much as $200 million every year. In the words of Aloe Blacc, an artist and songwriter, “A dollar is what I need.”
Getting large radio stations to agree to a performance right has been a struggle. Companies such as iHeartRadio US:IHRTQ and Cumulus Media CMLS, -3.79% are feeling the pinch, as music listeners and advertisers flock to streaming and digital radio services. Having to pay more fees for broadcasting music is an unwelcome prospect in this market environment. Remember that years ago it was also an undesirable proposal when streaming was less of a threat.
“Why isn’t the oldest platform for music, and frankly, the wealthiest one, not able to do this?” asked Daryl Friedman, Chief of Industry & Government Relations for the Recording Academy. “This issue is glaring in the spotlight right now.” To be sure, smaller and community-based radio stations may be more willing to strike a deal with recording artists that would give them more certainty with their digital transition in exchange for terrestrial royalties. But meaningful industry-wide progress has been glacial.
Congress should ensure that artists are paid for all of their performances.
Paying artists for their performances is only fair and right. Right now, music industry officials are engaged in negotiations to try to resolve this issue to the satisfaction of all parties. In the absence of a fair deal, Congress should pass an amendment to the MMA that mandates performance royalties. Congressman Jerry Nadler (D-NY), Chairman of the Judiciary Committee, which is responsible for intellectual property legislation, has been an evergreen advocate of artists’ rights. He would be justified to take a more muscular posture in settling this issue and building upon the landmark MMA.
The MMA includes several provisions that benefit artists. It ends the loophole which prevented pre-1972 recordings from being copyright protected. Those artists who created the hits of yesteryear can finally start to receive income based on these works. The law also affords music producers more protections, helping them gain access to more income streams. It also creates a license for royalties based on fair market value instead of a below market fixed standard. Ultimately, it has set an important precedent for legislation that benefits the creative community.
The passage of the MMA also cohered the music community around a common goal. “It showed that the industry and all of the players can work together and compromise to get big things done,” said Daryl Friedman. The Recording Academy enlisted hundreds of its members to participate in its District Advocate Program, in which creators met with over three hundred elected officials to lobby for the bill. That the Recording Academy marshaled its resources on this initiative is testament to the leadership of Neil Portnow, who will end his tenure as president of the organization after 17 years this July. Among his biggest achievements is bringing the music community together to resolve pay discrepancies.
If a performance right isn’t implemented soon, this grassroots band of artists will indeed demonstrate again. Rest assured, this band will march in-tune, in-tempo, and in the direction of Congress.
[This article was also published in MarketWatch]
Kabir Sehgal is the author and producer of Fandango at the Wall: A Soundtrack for the United States, Mexico, and Beyond. The music is by Arturo O’Farrill and the Afro Latin Jazz Orchestra, and it was recorded at the US-Mexico border. The book is nominated for a 2019 Audie Award for Best Original Work.