The Push for Royalties From Traditional Radio Stations

A bipartisan bill to compensate artists when their songs are played on FM/AM radio stations instead of just on digital music platforms, is gaining some traction in Congress. It was first introduced in June 2021, although a second bill reintroduced in May of 2021 directly opposes it.

The American Music Fairness Act (AMFA) would align American standards to the rest of the world if the bill passes. Traditional, also known as terrestrial, radio stations that now only pay songwriters when their songs are aired would have to compensate the music creators and artists for their audio performances.

The bipartisan Local Radio Freedom Act is backed by the National Association of Broadcasters. It reinforces the current loophole by detailing the benefits traditional radio provides to artists and rightsholders, ending with a plea that Congress should refrain from levying any new charges related to public, audio performances on local radio stations.

What the American Music Fairness Act is About

The AMFA would grant the sound recording’s copyright holder exclusive audio transmission performance rights, which currently only apply to digital, subscription transmissions because traditional, non-subscription FM/AM radio stations do not have to procure a license to play copyrighted recordings. The AMFA will change that and require terrestrial radio stations to purchase licenses to play artists’ recordings.

Royalty rates would be assessed by the Copyright Royalty Board with consideration for the radio stations’ other revenue streams related to the audio recordings. Flat license fees would be considered if radio stations do not meet projected revenue targets.

The Basis for the Bill

California Congressman Darrell Issa, who introduced the AMFA again in February 2023 with New York Congressman Jerry Nadler, proclaimed that every American inventor should by law have their intellectual property protected. He vowed to work with stakeholders to ensure reform of old laws protects them going forward.

The dispute heated up last year after iHeartMedia and Cumulus Media released their second quarter 2022 earnings, showing improved net income and revenue. iHeart Media reported revenue of more than $954 million for the three months ending June 30, up $92.4 million from Q2 2021. Year over year quarterly operating income increased 194.64 percent, and net income grew from a $31.96 million loss in Q2 2021 to $15.18 million for the same quarter in 2022.

Additionally, Cumulus Media reported a 5 percent jump in revenue for Q2 2022 over the same quarter in 2021. Net income rose from a net loss of $5.9 million in Q2 2021 to $8.7 million in the same quarter 2022.

Former Lawmaker Weighs in on Radio Companies Stellar Earnings

AMFA supporter and former U.S. Representative Joe Crowley called terrestrial radio station owners brazen hypocrites for bragging about all the money they are making while at the same time whining to Congress that they are too broke to pay royalties to recording artists. Mr. Crowley is the current chairperson of musicFIRST, backed by the Recording Industry Association of America (RIAA), which is promoting royalty payments to musical artists from terrestrial radio stations.

Mr. Crowley called for Congress to stand with recording artists and stop subsidizing profitable, multi-billion-dollar, radio corporations by passing the AMFA. “It’s the right thing to do,” he said.

Lomnitzer Law has music rights lawyers at the ready for anyone who needs legal assistance with music contracts or copyrights. Call us for more information on securing and protecting the royalties you deserve.