US Copyright Office Suggests Performance Royalties for Sound Recordings

In a nutshell:  Those who perform on a sound recording may be able to collect royalties for radio play.

The US Copyright Office just released a report making points and recommendations regarding the current state of US copyright law.  Basically, the current system regarding compensation for artists is old and broken.  It doesn’t work to foster creativity the way that it should.  The USCO’s report pretty much comes out and says this.  This could be huge news for musicians and, in my opinion, the state of music in general.

Read the full report here: Copyright and the Music Marketplace

Currently, terrestrial radio stations (AM/FM) pay one type of royalty to PROs.  This is a performance royalty for the composition of the song.  This royalty is intended to go to whoever wrote the song.  These royalties are what BMI, ASCAP and SESAC collect on behalf of writers and publishers.  When the radio plays Johnny Cash’s cover of Hurt, only Trent Reznor gets a royalty payment for it.

On the other hand, more recently developed sources of music have a different approach.  Examples of these are SiriusXM, online streaming companies, etc.  These companies pay a performance royalty for the composition of the song as well as a performance royalty for the sound recording of the song.  This means that the writer and the players are both compensated for their contributions.

The United States is one of few industrialized countries that allows for an exemption for terrestrial radio.  Most European countries have had policies in place that compensate both the writers and the performers of songs.  If you think about it, it really on makes sense.

At this point, the US Copyright Office’s report is nothing more than a recommendation.  However, it’s a great indication of the Office’s willingness to adapt and reward creativity.  Hopefully there will be much more to write about this in the future.