Interim FIRST Act aims to address performance royalty disparity

by Dave Mainella

A draft of a bill was released this past Monday to address the issue of performance royalties in today’s environment of modern, digital radio, and streaming services.  Rep. Jerrold Nadler (D-N.Y.) introduced the draft bill, called the Interim FIRST Act, with the intention to amend the disparities between terrestrial, cable, satellite, and internet radio.

The main component of the bill aims to address the fact that traditional broadcast radio, called terrestrial radio, does not currently pay music artists a royalty fee for airplay over radio waves – a royalty Nadler believes artists are entitled to.

“The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair.  We can’t start a race to the bottom when it comes to royalty rates and compensation for artists,” the Representative said in a statement. “The Interim FIRST Act would provide artists with fair compensation for the valuable creations they share with all of us.”

While artists currently do not collect performance royalties from terrestrial radio, stations do pay a royalty fee for online, live-streamed broadcasts.  The draft bill would increase this online fee, making up for the lack of a terrestrial radio royalty and meaning more money for musicians.

The draft legislation would also hold cable and satellite radio stations to the same standard as internet radio: an overall higher royalty fee paid to music artists.

The musicFIRST Coalition, a group of recording artists, musicians, and music businesses that advocate for performance rights, strongly supports the bill.  The Coalition hopes one day for a Congressional mandate that compensates artists for all radio play, but they agree that the Nadler bill is a sincere step in the right direction.

“The only real solution is for Congress to create a legal 
performance right, but raising terrestrial radio’s digital royalties is
an important interim step towards that goal.  By effectively reimbursing performers for lost income, Rep. Nadler’s draft legislation recognizes
the injustice of denying fair pay for airplay.”

But Dennis Wharton, a spokesman for the National Association of Braodcasters, opposes the draft legislation, stating it “fails to recognize the unparalleled promotional value of local radio airplay” and it “would kill jobs at America’s hometown radio stations.”

Rather, the NAB supports private royalty rate agreements, like the recent Clear Channel/Big Machine Label Group deal that creates a royalty system based on advertising.