Copyright Office Again Endorses Performance Tax

Last week the U.S. Copyright Office issued a report titled “Copyright and the Music Marketplace.”  It was no surprise that this lengthy study endorsed the federal agency’s longtime call for new performance royalty payments to be levied against radio broadcasters, nor that it was lauded by record label representatives. 

Register of Copyrights Maria Pallante, head of the Copyright Office, prefaced the report, “…the reality is that both music creators and the innovators that support them are increasingly doing business in legal quicksand.”  She suggested that this detailed study provided “balanced recommendations to improve the music marketplace.”

The report identified the United States with Iran and North Korea as examples of nations without a performance right for terrestrial radio. It did note broadcaster arguments against the burden of a new performance tax to subsidize the recording industry, but the study later stated those arguments “ring hollow.”  In particular, despite the claim that labels gain great value from the free play of their artists’ music on the airwaves, the Copyright Office saw “the promotional value of radio less apparent,” though it suggested that such arguments could be considered after the creation of a new performance right.  The agency’s view of the importance of free radio airplay to music artists seems to stand in contrast to a recent report by Nielsen, a leading company in measuring media consumption, which found that 91.3 percent of Americans tune in to radio every week and declared, “Radio remains the top method of music discovery, and its local nature makes it an integral part of the daily lives of hundreds of millions of consumers in markets large and small.” 

NRB will continue to oppose a performance fee for broadcasters. The NRB Board of Directors has previously unanimously approved a Resolution declaring, “The radio broadcasting industry has had a long, and mutually beneficial relationship with the music recording industry; further, those radio stations which have played music have… substantially benefited performers and music companies by airing and promoting their music.” The NRB Board consequently urged “Congress to resist any attempt to create a ‘music performance right’ that would impose a new copyright fee on radio stations that play over-the-air music,” as well as a consistent, fair, and non-burdensome webcasting royalty regime.

By Aaron Mercer, Vice President of Government Relations

Published: February 13, 2015

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