Music Revenue Report Should Spur Congress to Secure Copyrights Fully

On March 26, the Recording Industry Association of America (RIAA) released its "Year-End 2023 RIAA Revenue Statistics." On the positive side for music sound recording artists and copyright owners, RIAA's report reveals annual increases in U.S. recorded music market revenues. But the report's release also ought to remind Congress that it ought to secure broader legal recognition of music copyrights and promote creative and economic opportunities by passing the American Music Fairness Act – S.253 and H.R. 791.

According to RIAA's report, total revenues retail for the U.S. sound recording grew 8% to $17.1 at retail estimated value, up from $15.9 billion in 2023. Revenues from paid subscriptions to streaming music services grew 9% last year $11.2 billion, amounting to 78% of streaming revenues and almost two-thirds of total revenues. Paid subscriptions to on-demand music services totaled 96.8 million, constituting an annual growth rate of 5.7%

 

Although annual revenues from digital downloads dropped again in 2023 – slipping to $434.1 million compared to nearly $495 million in 2023 – revenues from sales of physical copies of sound recordings rose again last year. In 2013, vinyl record sales revenues rose to $1.4 billion, up 11% compared to the year before, marking the seventeenth consecutive year of vinyl sales increases and the second consecutive year in which vinyl unit sales have exceeded CD unit sales. Last year, CD sales revenues also rose 11% to $537 million.

 

These positive annual revenue totals and trends reflect the high value and growth potential of copyrighted music. Copyrighted property deserves legal protections and a market environment favorable to creative and economic flourishing. As Free State Foundation President Randolph May and I observed in our book Modernizing Copyright Law: Constitutional Foundations for Reform (Carolina Academic Press, 2020), the American Founders believed that one of the key roles of government is to protect and promote the creation, acquisition, use, and value of private property. The U.S. Constitution's Article I, Section 8 Copyright Clause gives the federal government a direct charge to secure rights in creative works, declaring that Congress shall have power "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

Congress should take action to promote creative and economic opportunity in the U.S. recorded music market. It should advance the American Music Fairness Act – S.253 and H.R. 791. 

The American Music Fairness Act would ensure equal legal treatment of different music distribution platforms and alleviate unfairness to copyrighted owners of recorded music who receive no compensation when their recorded songs are commercially by terrestrial AM/FM stations. Under current copyright law, terrestrial AM/FM radio stations have a special exemption from paying royalties to owners of copyrighted sound recordings when those stations play the music on the air. But S.253 and H.R. 791, would require AM/FM stations to pay royalties to owners of sound recordings for the use of their intellectual property just like online streaming services do.  

 

Under existing international agreements, foreign terrestrial AM/FM radio stations do not have to pay royalties for playing copyrighted music owned by Americans so long as domestic terrestrial AM/FM radio stations in the U.S. have no obligation to pay such royalties. Passage of the American Music Fairness Act would open up those foreign royalty streams to U.S. copyright owners. Importantly, the legislation is sensitive to the limited financial resources of smaller commercial and non-profit stations by treating them to a low, flat royalty rate. 

 

For further background on the American Music Fairness Act, see my February 2022 Perspectives from FSF Scholars, "American Music Fairness Act Would Secure Copyrights in Sound Recordings."