Here in Canada and in most countries around the world, radio stations have to pay a performance fee every time they play a song. That makes sense, given that playing music is how stations attract listeners and thus make money. Even stations with programming not based on music–think news/talk and sports–are still subject to a certain level of costs related to playing music as part of their broadcast day.
In fact, some countries (including Canada) pay more than one performance-style royalty. The fees are a percentage of the station’s gross revenue and comes off the top, pre-tax.
In the US, things are different. Terrestrial broadcasters do not pay performers or those who own the copyright of songs. The songwriter/publisher does get airplay royalties but the performer gets zero. This means that if a hit song gets spun a thousand times a week across all US terrestrial radio stations, the person(s) who perform the song earns nothing. (Internet radio and streaming are different; they do pay performers and those who own the copyright owners.)
Why? Because traditionally American radio has held that airplay constitutes free promotion, something that drives music fans to buy (or in today’s world, stream) the songs on their own time. That’s where the artist makes their money.
However, given that music sales have cratered this century, artists have been pushing to get some kind of slice of the action. There’s now a bill in front of the US Congress called the American Music Fairness Act. If passed, a performance royalty would be added to the balance sheet of over-the-air radio stations across America.
Naturally, the National Association of Broadcasters opposes this. I quote: “We’ve been clear that we welcome the opportunity to sit at the table with the recording industry to work on meaningful solutions to this issue. However, the record labels seem singularly focused on pushing Congress to act on a performance royalty bill that would radically upend one of their greatest promotional tools. Radio cannot sit idly by while the record labels seek to undermine our business at the expense of artists and listeners.”
The NAB is fighting back with the Local Radio Freedom Act, which opposes “any new performance fee, tax, royalty or other charge.” Stations across the US are being encouraged to air a series of commercials that explain their side of the story. Meanwhile, the NAB says it has substantial support in Congress.
Yeah, this is real inside baseball stuff when it comes to the music industry, but just think how much this would benefit performers. We’ll see how this plays out.