American Music Fairness Act
- Sponsor
- Sen. Blackburn, Marsha [R-TN]
- Committees
- Judiciary Committee (primary)
- Last action
- Jan 30, 2025
Bottom line
The American Music Fairness Act seeks to compensate artists and record labels for terrestrial radio airplay, a right currently enjoyed by other music services, while providing protections for small broadcasters and ensuring artist payments.
What it actually does
This bill amends Title 17 of the U.S. Code to establish a public performance right for sound recordings played on terrestrial (AM/FM) radio, requiring broadcasters to pay royalties to copyright holders and artists. It sets up a process for Copyright Royalty Judges to determine these rates, creates special lower rates for small broadcasters, and ensures artists receive a share of royalties even from direct licensing agreements between labels and broadcasters. The bill also directs CRJs to consider the promotional value of radio airplay when setting rates.
Proponents argue
Proponents argue that this bill rectifies a long-standing inequity where terrestrial radio stations profit from playing sound recordings without compensating the artists and copyright owners, unlike digital streaming services. They contend it ensures fair pay for artists, particularly those who rely on royalties, and aligns U.S. copyright law with international standards. Supporters emphasize the economic hardship faced by many artists and the need for a sustainable music ecosystem.
Opponents contend
Opponents, primarily large terrestrial radio broadcasters, argue that radio provides invaluable promotional value to artists, driving music sales and concert attendance, which serves as sufficient compensation. They contend that imposing new performance royalties would financially cripple many local radio stations, leading to reduced programming, job losses, and less music discovery, especially for emerging artists. They also express concern that the new costs could force stations to play less diverse music or rely more on older, royalty-free content.
The bill is relatively short and clearly structured, making it accessible for an informed reader to understand its core provisions within a reasonable timeframe.
Section 2(a), (b), (c)
Establishment of a Public Performance Right for Terrestrial Radio
This section extends the existing public performance right for sound recordings to all "audio transmissions," explicitly including terrestrial AM/FM radio broadcasts. Previously, this right primarily applied to digital transmissions. It also makes conforming changes throughout Title 17 to remove the word "digital" where it limited the scope of audio transmissions.
Supporters argue
Supporters argue this provision corrects a historical anomaly and ensures artists and labels are fairly compensated for the commercial use of their work, aligning the U.S. with most other developed nations. They assert it creates a level playing field with digital streaming services that already pay such royalties.
Critics contend
Opponents contend that this provision imposes an unfair new cost on terrestrial radio, which already provides substantial promotional value to artists, leading to album sales and concert ticket purchases. They argue it could harm local radio stations and reduce their ability to serve communities.
Tradeoffs
The core tension is between compensating creators for their work and acknowledging the promotional value that terrestrial radio provides, which historically has been considered a form of indirect compensation.
Section 3
Expedited Royalty Rate Setting for Terrestrial Broadcasts
This section mandates that the Copyright Royalty Judges (CRJs) commence a new proceeding as soon as practicable after the bill's enactment to determine royalty rates and terms for nonsubscription broadcast transmissions. These rates will be effective from the enactment date until December 31, 2028, with subsequent proceedings every five years. It also delays the initial payment due date until the CRJs determine the rates.
Section 4(a)
Tiered Royalty Rates for Small Broadcasters
This provision establishes significantly reduced, tiered annual royalty rates for small terrestrial broadcast stations. Stations with less than $100,000 in annual revenue pay $10; public broadcasters with $100,000 to $1.5 million revenue pay $100; and other non-public broadcasters in the same revenue range pay $500. Eligibility requires individual station revenue under $1.5 million and aggregate owner/operator/affiliate revenue under $10 million, along with annual certification. These special rates cannot be used as evidence in other rate-setting proceedings.
Section 5
Artist Share of Direct Licensing Royalties
This section mandates that if a copyright owner (typically a record label) directly licenses a sound recording to a transmitting entity (like a broadcaster), 50% of the royalties paid under that direct license must be remitted to the designated collective (SoundExchange). This collective then distributes these funds to featured and nonfeatured artists according to existing statutory proportions, ensuring artists receive their share even when labels bypass the statutory licensing system.
Section 7
Consideration of Promotional Value in Rate Setting
This section explicitly directs the Copyright Royalty Judges (CRJs) to consider the "value of promotion" when determining royalty rates for terrestrial broadcast radio stations. Specifically, CRJs must take into account whether a station's use of sound recordings promotes sales of phonorecords or enhances other revenue streams for the copyright owner, or conversely, interferes with them.
This clause explicitly states that the special, low royalty rates established for small broadcasters cannot be used as evidence or considered by the Copyright Royalty Judges (CRJs) when setting general royalty rates for other broadcasters or other types of transmissions.
Section 4(a)(iv)
Why it matters:This is standard legislative practice to prevent unintended consequences. Without this clause, the very low rates for small broadcasters could be cited by larger broadcasters in future rate-setting proceedings as a precedent for lower rates across the board, undermining the intent of fair compensation for most stations.
Case for: Prevents the nominal rates for small broadcasters from distorting the market-based rate determinations for larger entities, ensuring that the CRJs can set appropriate rates based on economic realities for the majority of the industry.
Case against: No strong case against, as it protects the integrity of the rate-setting process. Some might argue it adds complexity, but its purpose is clear.
Estimated impact: Prevents potentially billions of dollars in lost royalties for artists and labels by ensuring that the small broadcaster carve-out does not become a loophole for larger entities.