Sliding his fingers under the flap of an envelope, Bo Carter opens his royalty check. Sure, his voice earned him a nomination for the Texas Music Awards Male Vocalist of the Year, but it’s not Carter’s voice that pays the bills—it’s the lyrics he writes.
Since it was introduced in Congress last year, the Performance Rights Act has rocked the music industry. Currently royalty payments go into the pockets of songwriters and not the musicians or record labels. If passed, the act would require both commercial and noncommercial radio stations to pay annual performance royalty fees to labels and artists while imposing song usage reports.
“I would like for everyone to get paid more but that’s not how I see myself making money as an artist,” Carter said. “If people don’t hear my music on the radio, they don’t know to come to the shows or buy the CD. I don’t see any reason to nickel and dime the people who are promoting us.”
Lawmakers in Washington agree.
Representing the state that houses the “Live Music Capital of the World,” Congressman Mike Conaway and Congressman Gene Green from Texas are rallying support in an effort to get lawmakers backing the Performance Rights Act to sing a different tune.
“This has been a battle for a number of years but this economy makes it even tougher because of some of the fees they would charge,” Green said. “Even urban stations, which are typically higher market, couldn’t afford it.”
Almost a week after the performance act was introduced; Conaway presented the House with the Local Radio Freedom Act. The bill acts as a direct opposition to the performance tax, noting the benefits of song play and the financial impact on radio stations.
For Green, the Local Radio Freedom Act is the first step in bringing radio stations and record labels to the negotiating table so both parties can understand the shared benefits of the status quo.
Will Robedee, general manager for Rice University’s KTRU radio station and executive director of Collegiate Broadcasters, says the Performance Rights Act ignores the advantages of free airplay and puts many smaller stations—like college and religious stations—at risk.
“There’s been a long recognized promotional value from radio airplay,” Robedee said. “New and upcoming artists literally beg to be on the radio because they want the exposure and that exposure helps them draw a crowd when they go to play at local venues.
“What we’re concerned about is the financial impact and that some stations won’t be able to comply and they will cease to exist. Some of these artists will literally give their product away for airplay and this will take away a venue for doing that.”
Currently about 260 House members have signed on to the Local Radio Freedom Act with large bipartisan support from both Republicans and Democrats.
“I joked with [fellow representatives] Howard Berman (R-California) and John Conyers (D-Michigan) when they were moving it out of committee and told them, ‘I have my whip-list already,’ ” Green said.
Though Green is confident his list of co-sponsors will be enough to keep the performance tax at bay, supporters of the Performance Rights Act say they will remain focused on doing what is fair for the industry.
Marty Machowsky, spokesperson for the musicFIRST Coalition, a league of record companies and numerous music artists, says the performers are being used by radio stations for profit and should be rewarded accordingly for their work.
“These stations are making billions of dollars in ad revenue and how do they do it? They play music. You listen. They sell your ears to advertisers,” Machowsky said, “Music is the core of their business model and without music, there is no music radio.”
The Performance Rights Act was given the green light by both the Senate and House judiciary committees; however, it has not been scheduled for a vote. According to Green, it is the large opposition to the act that has leaders delaying the vote.
“Floor time is valuable. Our leadership isn’t going to bring something up that’s going to take up floor time and not be successful,” Green said.
Performance royalty fees are currently collected for songs played online and satellite radio through a group called SoundExchange. According to the group’s spokesperson, Laura Williams, SoundExchange distributed $147.5 million in royalty payments last year and has already dispersed $51.7 million in the first quarter.
The purpose of the non-profit organization is to seek out artists in order to send them their royalty payments. If artists fail to register with SoundExchange, the group can dissolve the funds after three years and distribute the money to the artists who are already signed up—an action some feel is a conflict of interests.
“In order to pay the royalties, they have to locate the artists and if they can’t find the artists, they get to keep the money. There’s a large disincentive for them to earnestly go out and find everybody,” Robedee said.
With more than 400 royalty checks in hand, the Washington-based company made an appearance at Austin’s weekend-long SXSW music festival in an attempt to find some of the local artists and give them their payment.
However, Williams says finding the artist is the easy part—it’s getting them to register with SoundExchange that is the barrier between artists and their checks.
“The hardest part is convincing the artists that it’s not a scam,” Williams said. “We’re still educating people that this royalty is even available. It’s hard convincing them that we’re legit and we really do just want to give them their money.”
Because SoundExchange is a non-profit, Williams says that close to all of the group’s operating expenses are deducted from the royalties they pay out but says eventually those expenses will come from the royalties that are not claimable, like those of deceased artists. SoundExchange, a large supporter of the musicFIRST Coalition, is primarily funded by royalty fees collected from webcasting services.
“They’re fighting for this new royalty with money from royalties that they’ve already collected,” Robedee said.