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Thursday
Apr232015

Music Artists take Charge - The Fair Play Fair Pay Act

 

Franchise Agreement LawyerIntellectual Property Attorney

 

by Tal Grinblat
818.907.3284

 

Music RoyaltiesOn April 13th, four Congressional members introduced the Fair Play, Fair Pay Act of 2015 (FPFPA), which requires traditional radio stations to pay song writers and performers royalties – just as their internet and satellite counterparts do.

Additionally, FPFPA seeks to put a stop to broadcasters exploiting music released before 1972. Currently royalty rights for recordings made before 1972 are governed by state law and not the federal Copyright Act. And brick and mortar radio stations must only pay royalties to the composers or publishing companies, not to the actual performers and musicians for the songs.

The Act’s goals are to settle other legal questions regarding royalty payments.

Companies like Muzak began streaming music to Dish Network before the Digital Millennium Copyright Act was signed into law by President Clinton in 1998, and were "grandfathered" into paying 8.5 percent of revenue towards royalties, rather than the 15 percent currently mandated.  A recently filed suit contends that Muzak should not be allowed to pay the lower royalty rate as it expands to other platforms like DirecTV's Sonic Tap.

The FPFPA was introduced by Representatives Jerrold Nadler of New York and Marsha Blackburn of Tennessee, and is co-sponsored by John Conyers of Michigan and Ted Deutch of Florida. A whole marching band of music greats (Cyndi Lauper, Marshall Crenshaw, Gloria Gaynor, to name a few) have also come out in support of FPFP.

Copyright Attorney

What else is on track for the Fair Play Fair Pay Act

  • Grounding: Brick and mortar AM/FM stations will have to pay performance royalties just as cyber stations do, under new terrestrial performance rights.

  • Pay Parity: Unified royalty standards for all radio platforms to ensure that streamers and stations pay the same rates.

  • Un-Equalization: Capping royalty obligations for stations with less than $1M annual revenue at $500 per year (and at $100 a year for non-commercial stations); and exempting incidental or religious uses of music from royalty obligations.

  • Messaging: Providing a mechanism for pre-1972 recordings and artists to be paid royalties.

  • Publisher Protections: Prohibits use of the FPFPA to lower royalties for artists and publishers.

  • Canon: Streamlining royalty payment practices. 

In the past, broadcast stations were allowed to play recorded music free of charge – programmed music was considered a promotional use that prompted listeners to buy records, tapes and CDs, not to mention tickets to concerts.  But those sales have dropped dramatically with the advent of free streaming services – and both satellite and internet services have exploited the lack of federal copyright protection for pre-1972 recordings.

 

Tal Grinblat is an Intellectual Property Attorney. Contact him via phone: 818.907.3284, or by email: tgrinblat@lewitthackman.com.

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