The Fair Play Fair Pay Act of 2015: A Folk Summary

It is the opinion of the Board that the foundation of advocacy is education. So we’ve set up this area of the site to make you aware of current issues facing our community. We hope to provide information so you can form your own opinion and decide what, if any, action to take on specific issues.

We have recently turned our attention to two matters repeatedly identified by our membership as being of the utmost importance: safe travel with instruments and copyright and royalties. After considerable time and effort, we are please to report that:

• You can now find a fact-filled page full of tips for traveling with your instruments on our website.  The page also features a handy download of the new (effective March 2015) Department of Transportation/FAA regulation governing flying with instruments in the United States.

• In February, we published a white paper entitled "Understanding Copyright, Royalties and Practical Application in Folk Music". While this was written specifically to explain how the system of copyright and royalties works to our membership and the Folk Music community at large, this paper is also full of practical information - making it a valuable resource for the general public.

We are now turning our attention to a new subject: the Fair Play Fair Pay Act of 2015. Why? Because critical discussions are underway in Washington that will affect the way our members are compensated when their songs are played on the radio.  We want to make sure our Folk Community (in the US and other countries, too) is aware of this legislation and the impact it has in our globally connected world.

The Fair Play Fair Pay Act of 2015: A Folk Summary

Our friends at the Future of Music Coalition have posted a helpful summary of the legislation. The following are some additional observations about how it affects our Folk community.

A main intent of this bill is to even the playing field when it comes to broadcast-related performance rights. Today, only songwriters and publishers get paid when their songs are played on AM/FM radio in the United States - performers and master recording copyright holders (often the label) don’t get a cent. They ARE compensated for airplay on newer forms of “radio” (satellite radio, internet) - this would make it uniform across all “broadcast” platforms, new and old.  The Act would also set in place public performance rights for recordings made before 1972.

Individual sections of the Act deal with different issues:

SECTION 2: EQUITABLE TREATMENT FOR TERRESTRIAL BROADCASTS AND INTERNET SERVICES

Among other changes, Paragraph (6) of section 106 of title 17, United States Code, would be amended to read: “(6) in the case of sound recordings, to perform the copyrighted work publicly by means of an audio transmission.” and Section 114(d)(1) of title 17, United States Code, would be amended to strike “digital” - thereby including terrestrial radio in the existing performance right and statutory license.

What This Means For Folk:  New media (satellite radio & Pandora, etc) already pay these types of royalties. AM/FM radio would be held to the same standard. This effectively levels the playing field across media, and at the same time that it holds terrestrial radio accountable, it also is an indicator that digital broadcasting has come of age.  Many of our Folk radio programs have online or digital/mobile platform presence, and we are proud of the fact that the largest media outlets in Folk already pay the royalties the bill proposes.

Enacting this law would also lead to parity with our foreign counterparts.  Because the US doesn't have a public performance right for sound recordings, any royalties that are generated when US performers' music is played on foreign radio stations cannot flow back to US creators.  This legislation would establish reciprocal rights, and allow radio airplay royalties generated in foreign countries to flow back to US performers and record labels more easily.

SECTION 4: ENSURING PLATFORM PARITY

The bill identifies the criteria that will be considered when setting uniform statutory rates.  Among those criteria are “(I) whether use of the service may substitute for or may promote the sales of phonorecords or otherwise may interfere with or may enhance the sound recording copyright owner’s other streams of revenue from the copyright owner’s sound recordings;” and “(ii) may consider the rates and terms for comparable types of audio transmission services and comparable circumstances under voluntary license agreements.”

What This Means For Folk: As this conversation continues, we should watch it carefully.  Independents have a much different experience than majors in this regard, and independents are arguably becoming the music industry majority.  At the heart of this is the debate over whether radio is still a promotional media, monetized by driving sales in other channels, or if it is simply how listeners consume music now, cross-platform, and is itself the product, further indicated by commercial radio’s advertising-supported revenue model.  Either way, the rights of copyright holders must be recognized.

The good news about this section is that it doesn’t set the rates for what broadcasters and services will pay. It identifies criteria.  And these two elements of the bill in particular acknowledge the factors at play, enabling the rate-setters to address the unique differences between platforms and shifting consumer use of them, while still establishing a uniform rate system.  It has provision for emerging technology, and by no means suggests the rates set in this system are final.

SECTION 5: SPECIAL PROTECTION FOR SMALL BROADCASTERS, PUBLIC AND EDUCATIONAL RADIO, RELIGIOUS SERVICES, AND INCIDENTAL USE OF MUSIC

The bill includes protections for small, public, non-commercial and college radio broadcasters. Small commercial stations with revenues less than $1,000,000/year would pay $500/year. Public broadcasting stations would pay $100.

What This Means For Folk: Without this, Folk Alliance would not be supporting the act. It recognizes the difference between radio stations that operate for the purpose of profit, using music programming to generate revenue through advertising sales, and those operating as a public community service, and are partially or entirely funded through membership drives and foundation support/donations. Analysis of the 2014 Folk DJs list found that all our reporting DJs work at stations likely to be protected by this provision.

SECTION 7: EQUITABLE TREATMENT OF LEGACY SOUND RECORDINGS

There is a loophole in copyright law that has left sound recordings made before February 15, 1972 without a public performance right.  The bill proposes amending Section 114(f)(3) of title 17, United States Code so copyright holders of pre-1972 sound recordings are paid royalties for transmissions.

What This Means For Folk: Folk songs recorded before 1972 but still aired frequently for profit on commercial ratio, are not treated the way recordings made since 1972 are treated, even if copyright ownership is clearly held. The Act seeks to address this disparity.  One known weakness of the Act is that it does not solve the issue of creators’ ability to recapture copyright.  But given that we represent artists of all ages, and music of all eras, we felt strongly that we should seize the opportunity to express support for the rights of artists and labels whose recordings predate 1972.  As a genre dedicated to songs old and new, Folk is uniquely suited to support this element in the bill.

SECTION 8: NO HARMFUL EFFECTS ON SONGWRITERS

The writers of the bill included this provision to protect the existing rights of songwriters, so the rights of Artists and Labels would not be earned at the expense of Songwriters and Publishers.  It also recognizes that a recording cannot be aired if licenses are not obtained for the work from the copyright owner (usually songwriter and/or publisher), or a performing rights society representing the copyright owner.

What This Means For Folk: Protections are included that prohibit the use of the Fair Play, Fair Pay Act to lower the royalties currently paid to songwriters and publishers in order to pay artists and labels.

SECTION 9: ALLOCATION OF PAYMENTS TO MUSIC PRODUCERS

The bill includes a provision to make it easier for artists to designate a percentage of performance royalties to producers or engineers if they issue a “Letter of Direction” stating as such.  It also assigns 2% of performance royalties for recordings fixed before November 1, 1995 as long as the producer/engineer certifies that they attempted for at least 4 months, to make reasonable effort to contact the artist to obtain a letter of direction.  An artist has an opportunity to object to royalty distribution to the producer/engineer, as long as it happens 10 business days before the first distribution.  To be eligible for payment, the producer/engineer still has to present a written contract with the artist or label showing that they are entitle to participate in royalty payments based on exploitation of the recording.

What This Means For Folk: In the major music industry, it is common practice for producers to be paid “points” on records on sales and royalties earned of an album they worked on.  In our community, that is still the case, but we also have a lot of seemingly “work for hire” production gigs.  We always recommend that artists, producers, studios and labels have clear contracts or deal memos, to memorialize the agreements they have made when making music together.  This provision illustrates one of the reasons why.

The other way it affects Folk is that the infrastructure around an artist, or at a record label, in our community tends to be lean, with administrators and helpers and volunteers wearing many hats.  For our artists and labels who do have points-based relationships with producers and engineers, this certainly alleviates one part of the manual process of accounting, and it likely increases the likelihood that our producers will be paid reliably and promptly.

Want to learn more about The Fair Play Fair Pay Act of 2015?

• Information and news updates at the musicFIRST Coalition website
• Billboard’s article includes perspectives from Martha Reeves and other artists
• New York Times: Bill Seeks to Broadens Royalties Paid By Radio Stations
• CommLawBlog: A communications law blog on “Copyright Tug of War: How May "Fair Play Fair Pay" Fare?”

Make your opinion known. We have.

The Board of Folk Alliance International feels strongly enough about this issue to speak out in favor of it.

We’ve sent letters to Reps. Jerrold Nadler (D-NY), Marsha Blackburn (R-TN.), John Conyers Jr. (D-MI.), and Ted Deutch (D-FL.) in support of their introducing the Fair Play Fair Pay Act of 2015 (H.R. 1733) to Congress.

As an international organization representing members of all ages and eras of Folk Music across the world, we feel it is our responsibility to acknowledge the work they, the musicFIRST Coalition, and others are doing to ensure music creators receive fair pay for their work.

Our goal is to provide enough information about this issue so that you can form your own opinion and speak out, too.

Follow others, and share your perspectives, opinions and ideas on social media.

Use #FairPlayFairPay when you post.

FACEBOOK
facebook.com/folkalliance
facebook.com/musicFIRSTcoalition
facebook.com/CongressmanNadler
facebook.com/marshablackburn
facebook.com/CongressmanConyers
facebook.com/CongressmanTedDeutch

TWITTER
@folkalliance
@musicFIRST
@RepJerryNadler
@MarshaBlackburn
@repteddeutch

If you still have questions about the Fair Play Fair Pay Act of 2015, please send them to: FPFPA@folk.org. If we can’t answer them, we’ll put you in touch with someone who can!