Some very basic background on an overly complicated system is in order. Songwriters — the people who write the lyrics, compose the melodies, etc. — are compensated by AM and FM stations, but those who actually sing the words and play the instruments are not. These terrestrial radio stations have a special carve-out: Internet radio stations such as Pandora provide royalties for performers, as does satellite giant SiriusXM (albeit at a special, cheaper rate).
The compensation that Internet-based radio stations provide artists is determined by a panel of judges on the Copyright Royalty Board, which set a rate of 17 cents per 100 plays by those who listen on stations supported by advertising and 22 cents per 100 plays by those who pay a subscription at the end of last year. The Fair Play Fair Pay Act would require AM and FM stations, as well as SiriusXM, to pay the same fee that Internet radio stations pay — to level the playing field.
The National Association of Broadcasters is entirely opposed to this effort, as one might expect, going so far as to label the effort to impose a performance royalty on radio stations a “tax.”* The NAB says that forcing radio stations to make such payments would lead to job cuts and endanger smaller, locally owned stations. Their argument is that the system has served everyone just swell for years: Songwriters get a little money while record labels and performers receive free publicity in the form of radio airplay that translates into album sales. As Michael Scott might say: A classic win-win-win!
Of course, the economics of the music industry have shifted so radically that a central tenet of this deal — free airplay converting into album sales — no longer really applies. One small stat from Michael Nelson at Stereogum to give you an idea of just how precipitous the decline in album sales has been: In the last six weeks of 2015, Adele sold more CDs than the next eight artists did.***
Combined. For the whole year.
That’s great for Adele, but pretty terrible for everyone else. With the exception of vinyl, which is doing quite well even if it remains a tiny niche, the market for albums is down drastically. This goes for digital sales on platforms like iTunes as well as traditional, hard media like CDs. Streaming is the future. And, except for the very top tier of artists, streaming doesn’t pay the bills.
All of this is to say that in the new system, the old assurances from the NAB and its allies don’t make a ton of sense. The question we should be asking ourselves is whether they ever really made sense in the first place. Not from an economic perspective, necessarily. But from a moral one.
Under the system we use currently, broadcasters — as long as they pay their songwriter royalties — have the right to air whatever they want. If an artist sells an album, anyone with a radio station can broadcast any song they like off that album. They can play it on a loop, if they want, regardless of whether the artist wants them to. Britney Spears can pull her music from Spotify, but she can’t stop Mix 107.3 from playing “…Baby One More Time” every hour on the hour from now until Ragnarök, as long as it pays songwriter royalties to writer Max Martin.
From an intellectual property perspective, this strikes me as fundamentally wrong. It’d be like saying every broadcast network should have the right to air “The Sopranos” so long as it pays HBO a couple of bucks a day. Or it’d be like allowing a website (say, the Huffington Post) to republish a 5,000-word investigative piece by The Washington Post or a 1,200-word movie review by the New Yorker or a 60-word listicle by BuzzFeed, racking up advertisement revenue in the process, so long as it paid a few pennies per thousand clicks to the person who wrote it, regardless of whether the author (or the organization that paid for the work originally) had any interest in it appearing elsewhere.
The current system fundamentally undermines the ability of artists and record labels to bargain for better pay. Taylor Swift didn’t like the revenue she was getting from Spotify, so she pulled her music from the service, eventually signing with Tidal. But she has no leverage on radio stations, no power to force a better deal: As long as they pay her a fraction of a penny for every spin of a song she has written, she has no recourse.
It’s not just a function of economics: There’s a freedom of association issue here, too. Artists who have a beef — political, artistic, whatever — with, say, Clear Channel can’t pull their music from the stations. I may think artists such as Pearl Jam are silly for pulling out of concerts in North Carolina, but I certainly think they have the right to throw a snit fit. In the case of broadcast stations, that’s not the case: An artist’s labor belongs to the radio moguls whether he wants it to or not.**
The Fair Play Fair Pay Act is a start, and it’s good that someone is fighting for performers to be compensated by radio stations that profit off of their work. But I hope for a day when an artist has a total right to his labor and can say no to the radio stations that profit from it without permission. Sure: No musician has a right to a certain amount of pay for a certain amount of work. Similarly, though, no business has a right to your labor if you don’t want to sell your labor to it.
*They call it a tax despite the fact that the money wouldn’t be going to the government. This is so transparently silly that Grover Norquist’s Americans for Tax Reform denounced the use of the word “tax” to describe a performance royalty a few years back.
**This is why musical artists might not actually be able to stop a politician from using their songs at rallies, if a politician ever decided to push the issue.
***Clarification: The sentence on Adele’s album sales has been updated to more accurately reflect Michael Nelson’s point. As he noted on Twitter, when you combine all album sales, single song sales, and on-demand streams, ‘25’ still sold more total units than the next three best-selling albums combined.