PROMOTE Act Moves Music Royalty Discussion in the Right Direction

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By: Holly Sadler

Last week, Darrell Issa (R-Calif.), Chairman of the House Judiciary Subcommittee for the Courts, Intellectual Property, and the Internet, along with fellow subcommittee member Ted Deutch (D-Fla.) introduced the long overdue PROMOTE Act. The PROMOTE Act, aimed at leveling the playing field and creating an environment where music performers can be fairly compensated for their work, would finally move the royalty debate in a free-market direction and we applaud this effort.

Currently, as copyright law stands, AM/FM radio stations are exempted from compensating performers in order to play their music over the airwaves, while satellite, Internet radio, and television stations pay royalties to play the same content.

The AM/FM radio stations have argued that the promotional value of a performer’s work being played on the radio is compensation enough, but as Congressman Deutch points out “those artists have never been given the opportunity to decide for themselves.” It is also worth noting that AM/FM radio stations do compensate the songwriters – just not the performers.

Under the PROMOTE Act, artists would finally be enabled to weigh the benefit of radio promotion against any loss in royalties they may experience. It also creates an avenue for free-market negotiation between the artists and the AM/FM stations to determine a fair rate of compensation.

No matter the industry, intellectual property must be protected. Not only are property rights among the founding principles of this nation and guaranteed to every individual, but protecting intellectual property has economic benefits outside of the obvious (and proper) benefit to the creator. According to a 2016 U.S. Commerce Department report, “IP-intensive industries support at least 45 million U.S. jobs and contribute more than $6 trillion dollars to, or 38.2 percent of, U.S. gross domestic product.”

We encourage this effort to remove government mandates that unjustly require individuals to turn over their property without compensation.  Furthermore, we encourage discussion about how we can reverse this and other policies that undermine IP-rights and stifle creation, innovation, and economic growth.