Did you know that the U.S. is grouped with China and Ghana as one of the only countries that does not pay royalties to the performers of a song that is aired publicly (Radio/TV)?  Weird, right?  Well this odd and troubling (for some) fact may be changing soon.  Here is my fellow L4M’er, Eric Malnar with his take on the Performance Rights Act and what changes may be on the horizon:

The Performance Rights Act (the “PRA”) was introduced in the U.S. Senate (S.379) and the House of Representatives (H.R. 848) in February of last year.  So why are we talking about this now?  Well, as most of you should now, L4M was recently in Austin, Texas for the 2010 SXSW festival and the PRA was the topic of an interesting and heated panel.  Interestingly, all sides of the issue were represented, except of course the radio stations (these are the guys who are supposedly adversely affected by the bill).  Perhaps invitations were sent but nobody from the radio world wanted to appear on the panel…who knows.  It is a shame because it would have been nice to hear their perspective especially since it appears as though the Obama administration is supporting the PRA and it might actually become law.

As a musician or someone who makes money through music,  should you care about the Performance Rights Act?  Well, it depends on what you do.  As many of you know, every time a song is played on terrestrial radio a royalty is supposed to be paid to the songwriter.  However, there is no payday for the artist who appeared on the song (singer, guitar player, chime and etc).  For example, if I wrote a song for a famous pop singer I would receive the royalty not the singer.  This is currently the system for terrestrial radio.  Think of Aretha Franklin singing RESPECT.  Everyone in the world has probably heard that song, but every time it is played the royalties for public performance go to the writer (specifically his estate) Otis Redding.

Give it to me. Give it to me. Give it to me. R-O-Y-A-L-T-I-E-S!

Digital sources of music are governed under a different law.  Under the Digital Performance Right in Sound Recordings Act of 1995 (“DPRSRA”) digital music providers are required to pay performance royalties for performance of the sound recordings.  Many feel that the difference in the way royalties are paid for terrestrial radio versus digital providers is unfair. The PRA would remedy this scenario by requiring a royalty for the singer as well as the background musicians.  So as you can imagine, the digital folks, like Pandora and LALA are excited about the passage of the PRA because they feel it will provide a level playing field.

Another often heard argument in favor of the PRA is the fact that other countries do not have the same terrestrial radio exception that we have here in the States.  In other words, money is being collected overseas for American artists but it is not being paid because the U.S. does not have a reciprocal system.

Wow, so this all sounds too good to be true, what is the catch you ask?  Well terrestrial radio stations are not happy about the PRA.  They argue that this will drive up costs and either put them out of business or force them to change their format to talk radio.  Thus the dilemma, is it worth receiving new rights under the PRA to the potential detriment of your opportunity (as an artist) to have your music played on terrestrial radio?  Back in the day when my band was struggling to get exposure we would have done almost anything to get played on big radio.  If the radio industry, which claims to be struggling, pulls music from most of its stations, another avenue for musicians to get exposed is closed.

Regardless of what happens it is important for every artist to understand his or her rights as a songwriter, performer or both.  As recording contracts morph into more intricate deals (e.g. 360 Contracts) artists need to be versed on all avenues of revenue.  It is no fun talking about music and money in the same sentence but at the end of the day, you need to pay the bills so you can live to play another day.

Stay tuned for updates on the PRA and more insight into some of the hot topic areas of music in film.