The Wheat and the Chaff...Do Performance Rights Matter

10.26.09 | Cecil Van Houten | Comments[5]

So last week the Senate Finance Committee voted to approve the Performance Rights Act which, if it ultimately becomes law, will impose performance royalties on broadcast radio.  You may have heard the debate as it's been getting louder in the last year or so.

Basically, it amounts to this:  at present, broadcast radio stations and networks pay royalties to songwriters and publishers through performance rights organizations like ASCAP, BMI and SESAC.  The revenue is distributed through a complicated set of formulas and calculations to compensate songwriters for the use of their works on the radio.  But American broadcasters have never paid a performance right fee to the artists for the use of their songs on the radio, the reasoning being that radio provides considerable promotional value to the artists and record labels. 

Now, with CD sales down roughly 20% from last year (continuing a year-to-year tumble this entire decade), record labels and artists are seeking additional revenue streams.  Performance rights are paid to artists in most other parts of the world; the U.S. stands almost alone in not paying them.  Additonally, the U.S. has no reciprocal agreements with other countries, so a British artist who may receive performance royalties in Europe receives none from airplay in this country and vice-versa; American artists receive no performance royalties when their songs are played on foreign radio stations.  If an artist is also the songwriter, they receive publishing royalties; but for the many who perform other writer's songs there is no additional "artist" performance income.

So what does this mean to Christian radio?  If the proposed legislation becomes law (and it's a long way from becoming that) it could mean dramatically increased costs.  Family Life Network already pays thousands and thousands of dollars a year to ASCAP, BMI and SESAC for the rights to use the songs they license.  Paying an artist royalty on top of that could double those costs or more.  What's interesting to me is that this debate has mostly been waged by secular artists and record labels and radio; most Christian artists and record labels haven't weighed in publicly.  There is some soft support for the PRA among labels but no label has taken a hard stand in favor of it, probably because they realize most Christian stations and networks could not absorb additional fees or because they don't want to appear greedy.  

So is the "workman worthy of his hire?"  Of course.  But are concert revenues, digital downloads, CD sales and general promotional value, all brought about by the free advertising broadcast radio provides by playing an artist's songs, enough?  Or is the artist entitled to something more?

A House version of the PRA has been approved by the House Judiciary Committee.  No votes have been scheduled in the full House or Senate so the PRA is still a long way from becoming law.  But if it does it will fundamentally change the relationship between record labels, artists and broadcast radio networks.  And, in my opinion, not for the better.  One of my reasons is that 50% or more of any royalties collected will go to the record labels, not the artists.  Radio would, in effect, be paying the labels for the privilege of promoting their songs.  The result would be reduced playlists with fewer artists.  Ironically, that would hurt new and emerging artists, who would lose their best opportunity to get their music out to the public.

What do you think?  How should artists be compensated?  Is the current system fair or unfair?  Would you be willing to support an additional $60,000 need in our spring Sharathon so FLN could pay to play Chris Tomlin?  (Or Natalie Grant or Casting Crowns or...)?


Your Comments(please keep them on topic and polite)

on 10.26.09 Bob Butts commented

Cecil - great article! Interesting how artists/record labels get paid and most programmers like us (Truth For Life) pay radio stations for the privilege of airtime - although I think we are on a shared basis with FLN. Airtime should be seen by the artists as a privilege and partnership. This will ultimately kill artists, not help them. Anyone for a second release of Alistair? :-)


on 10.26.09 On Topic and Polite commented

Radio stations will host an event where someone teaches the Bible and musicians open the event in worship. Some stations are willing to pay $20,000-40,000 for the musicians, but $500-$1000 to the Bible teacher. Some Bible teachers do not specify/require any amount when they are invited to teach the Bible (and I think they would travel much less if they required $20K). :)

I find it interesting to see such a vast difference between what is paid to musicians and what is paid to Bible teachers…and both are using the gifts that God has given them. Similarly though, as God tells us in His Word: to whom much is given, much is required.

on 10.31.09 Joe commented

I don't think artists should be paid more by radio stations. I'm sure some don't make a lot of money but it seems that most of them must be doing ok or they wouldn't be touring in big busses with big sound systems and charging high ticket prices. If I buy a t shirt for 18 bucks at a concert I figure they're making at least half of that and I see a lot of people buying them. Are they trying to be ministers of the gospel through music or are they mostly out for the bucks?

on 11.23.09 Randy Negley commented

Cecil - Very nicely written article explaining to listeners the complications of the royalty/performance right discussions that are currently in debate. I'm a very small internet broadcaster that runs a station "Southern Gospel for Central New York" and am using an internet radio hosting service out of California for the station's infrastructure. I have found that other than the primary work that christian radio does aside from the major mission of proclaiming the gospel message of Jesus Christ is that we also provide a media for exposure to artists that are used by those organizations that pay songwriters the royalty via the "BIG three" and we get the artist's promotional music out on the airwaves. From all the christian artists that I have been in contact with , they seem really grateful and helpful of christian radio stations and the role we play in their ministries. So my take on this is that it appears that statan's world once again is attempting to attack the gospel music industry from pressure being forced by secular artists and secular run organizations. The disclaimer is that this is only my opinion/conviction, but for sure has been added to my daily prayer list.

on 11.25.09 Pam Carbone commented

I don't think anything should be added to the expense of airing the music on the airwaves. 90% of all CD's and song downloads I purchase are because I've heard them on the radio and would like to listen to them when I don't have access to the radio. I agree, if this becomes a law, not only will we as listeners suffer but so will the artist because they won't have the exposure they have had before.

Thank you FLN for providing such a great variety of music and programming. I so appreciate all I hear.