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Watt Introduces Music Performance Royalty Bill

Label-backed musicFirst says bill “creates a true free market”

As promised, North Carolina Democrat Rep. Mel Watt has introduced a bill in the House that would require broadcast radio to pay music royalties for airing streamed music “performances.”

The Free Market Royalty Act creates an AM/FM performance right for sound recordings.

Label-backed musicFirst says the measure “creates a true free market for digital and AM/FM broadcasters, empowering music creators and users to negotiate for broadcast rights at a price the market determines. And it preserves the critical role of SoundExchange in protecting artists through direct payment and a statutory 50/50 split of royalties.”

Increasingly, as lawmakers encourage radio and the labels to settle their differences, broadcast radio has looked to radio group deals negotiated with individual record labels to solve the perennial streaming music royalty issue. Typically, radio groups get a favorable streaming music royalty rate in exchange for sharing a slice of digital and/or broadcast revenues with the label. Indeed, we’ve reported, several such deals were signed either close to or during the recent Radio Show.

However musicFirst eschews the deals, saying “the handful of deals between broadcasters and record labels that have been done can only be understood as a renegotiation of the webcasting rates since creators do not have any AM/FM performance right to negotiate.”

The new measure could have an uphill climb through Congress as Watt chose to introduce the measure on the eve of a possible government shutdown. As of the most recent count 171 House Members and 12 Senators oppose any new performance royalty for radio as supporters of the “Local Radio Freedom Act,” a nonbinding resolution.