The owners of copyrighted music should be protected in their rights. But a glaring void in the law allows AM and FM radio stations to play copyrighted sound recordings without obtaining permission or paying the owners. Legislation introduced in Congress on November 21 called the "Ask Musicians for Music Act" (AM-FM Act) would, if passed, fill that void and secure to sound recording owners the legal protections they deserve.
The U.S. Constitution's Copyright Clause gives Congress the responsibility to secure exclusive rights in the creative works of musical and other artists. Yet existing law gives terrestrial AM and FM radio broadcasters an unfair privilege by allowing them to retransmit copyrighted sound recordings without having to pay any royalties to the owners of those recordings. No matter how many stations play their music, no matter how many plays their music receives, and no matter how much money those stations make, sound recording owners receive no royalties from AM and FM broadcasters.
According to the FCC's Communications Marketplace Report (2018), total broadcast radio revenue exceeded $16.5 billion in 2016. (This figure excludes digital/online revenue received by broadcast stations.) SoundExchange has estimated that American copyright owners of sound recordings are denied about $200 million in annual royalties that would have been paid to them for radio broadcasts in other nations. The law also confers an unfair advantage on terrestrial AM/FM broadcasters, since competing satellite radio broadcasters and non-interactive online services (or webcasters) do have to pay royalties for transmissions of copyright sound recordings.
Congress should better secure copyright protections in sound recordings. Promising legislation introduced soon in the Senate by Senator Marsha Blackburn and in the House by Representative Jerry Nadler would serve that constitutional purpose.
The AM-FM Act would amend the Copyright Act by requiring AM and FM stations to get the consent of copyright owners before broadcasting their sound recordings. In other words, the AMFM Act would finally give sound recording owners the say over whether their own sound recordings may be used by terrestrial radio broadcasters. And it would allow them to seek payment for such usage. Also, creative artists and other sound recording owners who prefer letting stations to play their music over the air for free may let them to do so.
Additionally, the AM-FM Act would protect small broadcasters as well as public and education stations by capping the compensation that sound recording owners may annually receive from those stations. The focus of the AM-FM Act is on large commercial broadcasters.
Interestingly, many broadcasters have called for reforms that would better respect their own copyrights by allowing them to negotiate with cable operators over retransmission rights for broadcast TV programming. Existing law provides cable operators a compulsory license to retransmit to their subscribers copyrighted broadcast TV programming by paying royalties to the programming owners at government-prescribed rates. Broadcasters have claimed that the compulsory license unfairly restricts their exclusive rights in their TV programming and that it results in royalty payments below what they could negotiate in a free market setting. So, it's a bit odd – indeed, inconsistent – for broadcasters to steadfastly oppose payments for radio broadcasts of copyrighted sound recordings.
The AM-FM Act constitutes an important step in respecting exclusive rights in creative works in all circumstances, regardless of medium or commercial industries involved. By passing the AM-FM Act, Congress can better secure copyrights in sound recordings and meet its obligation under the Constitution's Copyright Clause.