Notes on the proposal in the US for 'Performance Rights Act' legislation and the international implications, written by Grant Goddard In January 2010 for RadioCentre.

1. NOTES ON THE US
'PERFORMANCE RIGHTS ACT'
PROPOSAL AND THE
INTERNATIONAL PERSPECTIVE
by
GRANT GODDARD
www.grantgoddard.co.uk
January 2010

2. Notes On The US 'Performance Rights Act' Proposal And The International Perspective Page 2
©2010 Grant Goddard
THE PERFORMANCE RIGHTS ACT
In the US, terrestrial broadcast radio stations have:
 always been required to pay royalties to the writers of the songs they play via payments to
ASCAP, BMI & SESAC (equivalent to PRS in the UK)
 never been required to pay royalties to the owners of the music recordings they play
(equivalent to PPL in the UK).
Terrestrial broadcast radio in the US is a unique anomaly in this regard because:
 satellite radio (Sirius XM) and internet radio in the US are required to pay royalties to the
owners of music recordings, as are movies and computer games
 the only other countries that do not pay royalties to owners of music recordings for radio
airplay are North Korea, China, Rwanda and Iran.
The music industry in the US has lobbied over many years for terrestrial broadcast radio
stations to start to pay for the recordings they play, which has led to the proposal for a
Performance Rights Act in US legislation. In 2009, both the House and Senate Judiciary
Committees approved the bill, but there is work to be done to finalise the detail before the Act
can be presented in its final form to the full House and Senate in the current 110
th
Congress
session.
For example, one notable amendment approved in the Senate was intended to provide relief
for small radio stations, who would pay:
 $100 per annum for revenues less than $50,000
 $500 per annum for revenues between $50,000 and $100,000
 $2,500 per annum for revenues between $100,000 and $500,000
 $5,000 per annum for revenues between $500,000 and $1,250,000.
The rates for larger stations would be set by the US Copyright Royalty Board.
These proposed amounts are considerably less than:
 radio stations in the UK pay to PPL for the equivalent rights (2-5% of revenues)
 internet radio stations in the US pay for the equivalent rights (by a factor of 30).
However, it is important to note that there are 14,355 licensed terrestrial radio stations in the
US, so that the aggregate amount raised from the new royalty will create a sizeable new
revenue stream for the US music industry.
The international perspective is complex. At present, because the US is not paying foreign
copyright owners for airplay of their recordings in the US, most foreign copyright collection
agencies (such as PPL) retaliate by collecting royalties for airplay of US recordings in their
countries but not remitting them to the US owners (estimated $100m per annum). If the US
approves this new royalty, and if international retaliation is dropped, royalty payments to
owners of music recordings would start flowing in and out of the US for the first time.
The US radio industry is resisting the Act vociferously as a financial burden.
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk