Radio, Music, and Copyrights: 100 Years of Inequity for Recording Artists (U.S. House Committee on the Judiciary, Subcommittee on Courts, Intellectual Property, and the Internet)

Hearing	Radio, Music, and Copyrights: 100 Years of Inequity for Recording Artists
Committee	U.S. House Committee on the Judiciary, Subcommittee on Courts, Intellectual Property, and the Internet
Date	June 26, 2024

 

Hearing Takeaways:

• Terrestrial Radio Performance Royalties for Music Artists: The hearing focused on the U.S.’s current policies governing the payment of performance royalty payments for music artists the terrestrial radio airplay of their music. The U.S. currently exempts terrestrial radio stations from paying royalties to music artists for performances of their works. The rationale for this exemption is that music artists receive promotional value from the airplay of their music on terrestrial radio. However, music artists receive performance royalties for the airplay of their music on all other mediums (including satellite radio, streaming services, online video websites, social media websites, public venues, and restaurants). Moreover, radio broadcasters will pay performance royalties to music artists when their stations are simulcast on the internet.
  • Terrestrial Radio’s Current Expenses and Royalty Payments: Mr. LeGeyt and Mr. Harrell highlighted how terrestrial radio stations incur significant expenses. Mr. LeGeyt mentioned how radio stations pay substantial regulatory fees to the U.S. Federal Communications Commission (FCC) and how terrestrial radio stations pay hundreds of millions of dollars in annual copyright royalties to performing rights organizations (including the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI), the Society of European Stage Authors and Composers (SESAC), and Global Music Rights (GMR)) and to streaming collectives (including SoundExchange). He also noted how terrestrial radio stations pay performance royalties to songwriters when their music is played on terrestrial radio. Mrs. Travis questioned the fairness of providing songwriters with a performance right for terrestrial radio airplay and not providing music artists with a similar performance right for terrestrial radio airplay. She commented that the music artist is necessary for enabling a song to be aired on terrestrial radio and therefore deserves royalty payments.
  • Unique Features of Terrestrial Radio: Mr. LeGeyt and Mr. Harrell stated that the local and free nature of terrestrial radio makes it fundamentally different from other music platforms. Mr. LeGeyt added that terrestrial radio is available in all areas (including areas without access to broadband service). He also stated that other democratic countries that pay performance royalties for terrestrial radio airplay do not have commercial locally-focused broadcast radio systems that are comparable to the U.S.’s local broadcast radio systems. He noted how other countries have either nationalized syndicated radio broadcasting or government-funded broadcast radio. He remarked that the resources necessary to enable a freely available locally-focused broadcast radio model are significant and commented that U.S. policies recognize this dynamic. Mr. LeGeyt and Mr. Harrell contended that terrestrial radio stations should there be exempt from paying performance royalties to U.S. music artists based on these unique features. Subcommittee Chairman Darrell Isa (R-CA) disputed Mr. LeGeyt’s characterization of U.S. broadcast radio being unique and highlighted how Canada has a vibrant local broadcast radio market.
  • Promotional Benefits of Terrestrial Radio: Mr. LeGeyt and Mr. Harrell contended that terrestrial radio provides unique promotional value to music artists given how it is always on and freely available without the need for subscriptions or data services. They also stated that record labels and music artists are often requesting that terrestrial radio stations play their music for promotional reasons. Mr. LeGeyt testified that the National Association of Broadcasters has estimated that the promotional value of broadcast radio is as high as $2.4 billion. Subcommittee Chairman Issa, Full Committee Ranking Member Jerrold Nadler (D-NY), Mrs. Travis, and Mr. Huppe argued however that the promotional value terrestrial radio airplay is overstated and does not justify the absence of a performance right for U.S. music artists on terrestrial radio. They stated that while this promotional value may have been justifiable when physical music sales were the main revenue source for U.S. music artists, they contended that the shift toward music streaming significantly diminishes the promotional value of terrestrial radio. Mr. Huppe further noted how 72 percent of the music played on terrestrial radio is not new music and commented that this raises questions regarding the promotional value of terrestrial radio airplay.
  • Public Service Benefits of Terrestrial Radio: Rep. Nathaniel Moran (R-TX), Rep. Laurel Lee (R-FL), Mr. LeGeyt, and Mr. Harrell highlighted how terrestrial radio stations provide important public service benefits. They indicated that these benefits include the provision of locally-focused news and emergency information (especially during periods of civil unrest, extreme weather, and natural disasters) and community service initiatives. Mr. LeGeyt and Mr. Harrell added that terrestrial radio stations can swiftly change their programing to provide this emergency information and that the information is freely available. Mr. Huppe argued however music artists should not be expected to pay for the community service initiatives of terrestrial radio stations through forgoing performance royalties. Mrs. Travis added that music artists music artists often engage in charitable activities and emphasized that broadcast radio stations are not the only parties engaged in these activities.
  • Foreign Payment of Performance Royalties for Terrestrial Radio Airplay of Music: Subcommittee Chairman Issa, Full Committee Ranking Member Nadler, and Mr. Huppe expressed frustration that the U.S.’s failure to establish a performance right on terrestrial radio causes U.S. music artists to miss out on performance royalties when their music is broadcasted overseas on terrestrial radio. They noted that foreign countries will collect performance royalties for the terrestrial radio airplay of this music and not remit the royalties to the U.S. music artists responsible for the music. Mr. Huppe estimated that U.S. artists lose almost $300 million of taxable U.S. income each year because the U.S. lacks a performance right for terrestrial radio. Mr. LeGeyt asserted however that this $300 million estimate remains unsubstantiated. Rep. Scott Fitzgerald (R-WI), Mr. LeGeyt, and Mr. Huppe also alleged that music labels are failing to collect and remit performance royalties generated overseas to U.S. music artists. 
• The American Music Fairness Act of 2023: The hearing considered the American Music Fairness Act of 2023, which would require terrestrial radio stations to pay copyright royalties to performing artists, record labels, and other sound recording copyright owners for the right to transmit their music over the air. The legislation’s supporters, including Subcommittee Chairman Darrell Issa (R-CA), Full Committee Ranking Member Jerrold Nadler (R-NY), Rep. Adam Schiff (D-CA), Mrs. Travis, and Mr. Huppe, argued that this bill is necessary to fairly compensate music artists for the use of their works. They also highlighted how the U.S. is the only democratic nation in the world without a performance right for music artists on terrestrial radio. The legislation’s opponents, including Mr. LeGeyt and Mr. Harrell, argued however that that the terrestrial radio business model is predicated on current royalty arrangements and that the imposition of a new performance royalty on terrestrial radio stations would threaten the continued viability of terrestrial radio stations.
  • Impact on Terrestrial Radio Stations: The legislation’s opponents argued that the bill’s imposition of a new royalty on terrestrial radio would be financially untenable for radio broadcasters of all sizes. They discussed how local terrestrial radio stations are increasingly competing against large technology companies for advertising revenues and that the imposition of this new royalty would weaken their ability to remain in business. They also warned that the imposition of performance royalty obligations on terrestrial radio stations would diminish the community service activities and the emergency service capabilities of local broadcast radio stations. Mr. LeGeyt further warned that these additional costs would prevent these stations from innovating within the music streaming space. However, Mr. Huppe disputed the contentions that the broadcast radio industry faces imminent destruction and noted how the broadcast radio industry had made $15 billion in revenue in 2023. He emphasized that none of this revenue went to the music artists that attract listeners to their radio stations. He added that the U.S. already has news, talk, and sports broadcast radio stations that are required to provide emergency services and pay their talent. Mrs. Travis further stated that the legislation would make artists, musicians, and producers more willing to collaborate with terrestrial radio stations on projects and events if the stations were to compensate these professionals for their performance rights.
  • Considerations for Smaller Terrestrial Radio Stations: The legislation’s supporters argued that the bill would protect smaller terrestrial radio stations through providing special accommodations to these stations. They explained that the bill would base the size of the radio station’s royalty payments on the amount of annual revenue that the radio stations and their parent organizations generate. Mr. Harrell reiterated his concerns however that the impositions of these fees (albeit reduced) would still decrease revenues for struggling terrestrial radio stations.
  • Consideration of Promotional Value in the Copyright Rate Setting Process: The legislation’s supporters noted that the bill would direct the U.S. Copyright Royalty Board (CRB) to consider promotional value when setting terrestrial radio performance royalty rates for music artists. They stated that the CRB has a long history of successfully setting performance royalty rates and that the bill’s consideration of promotional value would ensure that these royalty rates would not be overly burdensome for terrestrial radio stations. Mr. LeGeyt reiterated his concerns however that the CRB’s imposition of new performance royalties on terrestrial broadcast stations would threaten the viability of these stations.
  • Impact on Music Artists: The legislation’s supporters highlighted how many musicians are working class and stated that the provision of a performance right to music artists for the terrestrial radio airplay of their music would enable these music artists to financially survive. Mrs. Travis noted that music artists function as small businesses that retain staff and bands and that incur travel and insurance expenses. She also testified that music royalties have been key to supporting her family since her musician husband had experienced a stroke (which inhibits her husband’s ability to tour).
  • Impact on Restaurants and Bars: Rep. Scott Fitzgerald (R-WI) mentioned how there are concerns that the bill could lead to the elimination of all transmission and retransmission exemptions granted in the Digital Performance Right in Sound Recordings Act of 1995 (DPRA). He expressed concerns that the elimination of these exemptions could impact the ability of restaurants and bars to play music. Mr. Huppe asserted however that restaurants and bars are fundamentally different from broadcast radio. He elaborated that the main value propositions of restaurants and bars are food and drinks while the main value proposition of broadcast radio is music.
  • Concerns over the Legislation’s Targeted Approach: Mr. LeGeyt remarked that the American Music Fairness Act of 2023’s “abrupt” change in law would be wholly inconsistent with Congress’s long held approach to copyright policy where updates have been made to account for new and emerging technologies. He asserted that it would be “virtually unprecedented” for Congress to upend copyright laws that have governed decades-long relationships and upon which entire industries have been premised on for over a century.
  • Negotiations to Develop a Performance Right for Music Artists for the Terrestrial Radio Airplay of their Music: Subcommittee Chairman Issa and Mr. Huppe accused the broadcast industry of refusing to negotiate in good faith to establish a performance right for music artists for the terrestrial radio airplay of their music. Subcommittee Chairman Issa commented that terrestrial radio stations will pay high annual fees to the National Association of Broadcasters and criticized these broadcast radio stations for failing to consider paying a flat rate to provide performance royalties to music artists. He also predicted that broadcast radio stations would face significant financial problems if recording artists were to ever advocate that their fans only consume their music via streaming platforms. Mr. LeGeyt stated however that the National Association of Broadcasters has expressed their desire to participate in the development of reforms to the U.S.’s music royalty payments system. He asserted that the recording industry has not sufficiently engaged in these negotiations.
  • Use of Free Markets to Set Performance Royalty Rates: Rep. Thomas Massie (R-KY) questioned whether the CRB could fairly decide what would constitute appropriate royalty rates for the performance of music. He stated that music artists would likely vary significantly in terms of how they value the use of their works on music delivery platforms. He elaborated that some music artists may prioritize the promotion of their works while other music artists may prioritize the receipt of royalties for their works. He suggested that there might exist a solution to the payment of performance royalties for the airing of music that involves free markets. Mr. LeGeyt noted however that the U.S. broadcast radio market involves 15,000 broadcast radio stations and thousands of different music ownership groups. He stated that the CRB provides efficiencies in setting performance royalty rates across this fragmented market. He commented that having individual market negotiations across these various parties would be difficult to achieve.
• The Local Radio Freedom Act: Mr. LeGeyt and Mr. Harrell thanked Congress for its broad bipartisan support for a resolution supporting the Local Radio Freedom Act. They explained that this resolution opposes the imposition of any new fee or tax on local radio. 
• Impact of Artificial Intelligence (AI) Technology on the Music Industry: Subcommittee Members and the hearing’s witnesses further expressed interest in how AI technology will impact the music industry. They highlighted that while generative AI technology can serve as a useful tool for music creators, they also stated that this technology could pose dangers when it uses a music artist’s work or likeness without obtaining permission or providing compensation.
  • Use of AI Technology to Create Music: Mrs. Travis discussed how her husband has recently released his first song since he had suffered his stroke 11 years prior and indicated that AI technology had enabled the creation of this song. She explained that this song was creating using stems from around 45 previous songs from Mr. Travis and studio musicians. She warned however that there exist harmful applications of AI technology and mentioned how there are an estimated 179,000 unauthorized songs created using AI technology that are already available on the internet. She asserted that there need to exist laws to prevent people from using a music artist’s work without authorization to create new music through AI technologies. Several Subcommittee Members expressed support for the No Artificial Intelligence Fake Replicas And Unauthorized Duplications (No AI FRAUD) Act of 2024, which would provide a property right to voices and likenesses for all Americans.
  • Impact of AI Technology on Radio Stations: Mr. Harrell noted that while radio stations will employ AI tools to find new efficiencies in their back office operations, he asserted that AI technology will not replace the essence of local broadcasting. He also asserted that AI technology will not replicate the entrepreneurial spirit or programming expertise of humans, which he described as key for radio broadcasting.

Hearing Witnesses:

1. Mr. Randy Travis (assisted by Mrs. Mary Travis), Recording Artist 
2. Mr. Curtis LeGeyt, President and Chief Executive Officer, National Association of Broadcasters
3. Mr. Michael Huppe, President and Chief Executive Officer, SoundExchange 
4. Mr. Eddie Harrell Jr., Regional Vice President and General Manager, Radio One, Inc.

Member Opening Statements:

Subcommittee Chairman Darrell Issa (R-CA):

• He discussed how the broadcast radio industry has argued that performers should not receive compensation for airings of their performances on terrestrial radio because the airings provide promotional value to the performers.
  • He noted how the U.S. is unique in how it does not compensate performers for the terrestrial radio airings of their performances.
• He stated that terrestrial radio has played an “invaluable” role in U.S. history and noted how terrestrial radio broadcast news, weather, and sports programming.
  • He emphasized that terrestrial radio stations pay to broadcast this programming.
• He expressed frustration however that the U.S. does not recognize public performance rights in radio music broadcasts.
  • He highlighted how China had even recently modernized its copyright law to provide for performance rights for sound records.
• He also expressed frustration with how foreign countries collect royalties for the broadcasting of U.S. music and do not remit these royalties to U.S. artists.
• He mentioned how he had proposed the bipartisan American Music Fairness Act of 2023 to ensure that U.S. artists are compensated for the use of their performance rights on terrestrial radio.
  • He asserted that U.S. artists have earned this money and that compensation for the use of their performance rights on terrestrial radio is necessary for supporting less successful performance artists.

Subcommittee Ranking Member Hank Johnson (D-GA):

• He discussed how music is very important for the U.S. and his state of Georgia’s economies and mentioned how many recording artists reside within his Congressional District.
  • He described Atlanta, Georgia as the “capital” of hip hop and rhythm and blues (R&B) music and commented that Atlanta has a “vibrant network” of music creators, writers, music labels, recording studios, and music venues.
  • He added that Atlanta has music creators in genres beyond hip hop and R&B music.
• He mentioned how the Georgia Institute of Technology had found that Georgia’s music industry had generated $3.5 billion and employed over 16,000 people in 2016.
  • He indicated that Georgia’s music industry currently supports over 45,000 jobs and that Georgia has over 13,000 music royalty recipients and over 91,000 songwriters.
• He remarked that while the music industry contributes significantly to the U.S. economy on the individual level, he asserted that it is currently difficult to be an “up and coming” musical artist.
  • He elaborated that music artists face challenges maintaining a steady stream of performances and achieving widespread notoriety.
• He stated that music creators are often working-class professionals and often have second jobs.
  • He asserted that technology advancements and changes in music consumption patterns have exacerbated economic disparities among music artists.
• He noted how Congress had exempted terrestrial radio from paying performance royalties to music artists when it had created performance royalties for the digital distribution of musical works in 1995.
  • He explained that Congress’s justification for this exemption had been that terrestrial radio airplay of music could serve as promotion for a music artist’s albums.
• He remarked however that music consumption has changed significantly since 1995 and commented that consumers now stream individual songs (rather than purchase entire albums).
  • He noted that statutory arrangements may become “less balanced” as a result of technological developments and industry evolutions and asserted that Congress must now address radio broadcast performance rights in response to these changes.
• He stated that music artists must receive compensation for the use of their works and that these artists require steady royalty revenue streams because other revenue streams may not always be reliable.
• He remarked however that Congress must also consider the concerns of broadcasters and local radio stations when addressing radio broadcast performance rights.
  • He noted how local radio stations and their hosts raise important health and social issues, support local journalism, and provide “much needed” information on emergency services during disaster events.
• He acknowledged that while all the stakeholders involved in the radio broadcast performance rights issue vary in terms of their ability to accommodate change, he asserted that Congress must ensure the fair treatment of all of these stakeholders.
• He expressed interest in exploring if and how Congress should act to ensure that all elements of the music industry are properly supported as technology changes music consumption habits.

Full Committee Ranking Member Jerrold Nadler (D-NY):

• He discussed how music artists are not paid when their recordings are played on terrestrial radio under U.S. copyright law.
  • He noted however that the same recordings will generate compensation for the music artist when distributed over any other medium (including satellite radio, streaming services, public venues, and restaurants).
• He contended that there is no reason for terrestrial radio to be treated differently from all other music platforms and that this differential treatment should not come at the expense of music artists.
• He noted how many creators whose performances are transmitted over terrestrial radio are working class musicians.
  • He lamented how increasing inequities have made it more difficult for these creators to make a living wage.
• He highlighted how the current lack of compensation for the terrestrial radio airings of music can harm music artists that no longer engage in live performances due to changing consumer preferences and/or an inability to perform.
  • He mentioned how witnesses Randy Travis will share his experience suffering from an illness that renders him no longer able to perform his music live.
• He also discussed how the failure of U.S. law to establish a performance right on terrestrial radio causes U.S. musicians and other music performers to miss out on royalties when their music is broadcasted overseas.
  • He noted that nearly every other developed nation compensates music artists for the terrestrial radio airings of their music.
• He highlighted how the U.S.’s lack of a performance right on terrestrial radio deprives music artists up to $200 million annually in compensation for the airing of their performances on foreign terrestrial radio stations. 
• He expressed disagreement with the argument that music artists benefit from the lack of a performance right on terrestrial radio through receiving free publicity and asserted that this argument does not account for current music consumption habits and preferences.
  • He noted how most people no longer purchase physical copies of music and highlighted how over 72 percent of U.S. music revenue had come from streaming services in 2023.
• He remarked that music artists should not receive differential treatment when their songs are played on terrestrial radio or streamed online.
• He mentioned how he has joined Subcommittee Chairman Darrell Issa (R-CA) in introducing the American Music Fairness Act of 2023.
  • He explained that this legislation would require broadcast radio stations to pay copyright royalties to performing artists, record labels, and other sound recording copyright owners for the right to transmit their music over the air.
• He stated that the American Music Fairness Act of 2023 has been “carefully constructed” to ensure that smaller broadcast radio stations will pay fewer royalties than larger broadcast radio stations.
  • He indicated that the legislation would base the size of the radio station’s royalty payments on the annual revenue that the radio stations and their parent organizations generate.
• He further stated that the U.S.’s current lack of a performance right on terrestrial radio harms artists, music labels, and the arts in general.

Witness Opening Statements:

Mrs. Mary Travis (on behalf of Mr. Randy Travis, Recording Artist):

• Note: Mrs. Travis delivered the opening statement on behalf of Mr. Travis (whose physical ailments limit his ability to communicate).
• She called the American Music Fairness Act of 2023 essential to correct the non-payment of music artists for the airing of their works on terrestrial radio.
  • She commented that music artists have helped to build and sustain the terrestrial radio industry and therefore deserve a performance right on terrestrial radio.
• She recounted how her husband, recording artist Randy Travis, had experienced viral cardiomyopathy 11 years ago, which had resulted in numerous serious health problems, long-term hospital stays, and a need to engage in daily rehabilitation.
  • She indicated that her husband has subsequently been able to return to the music industry.
• She then discussed how the music industry has changed significantly and noted how the advent of streaming has “all but replaced” physical music recording sales.
  • She emphasized that there are no guarantees that radio listeners will purchase concert tickets and an artist’s merchandise after hearing a music artist’s music played on the radio.
  • She noted how consumers can now listen to all the music that they want on demand for “pennies a day.”
• She remarked however that music artists remain the “mandatory bridge” between music writers and music listeners and asserted that music artists deserve compensation when their music recordings are played on terrestrial radio.
• She contended that passing the American Music Fairness Act of 2023 would rectify this current injustice and would provide numerous benefits.
  • She stated that this legislation would provide artists, musicians, and producers with a gratuity for their works, which would make them more willing to collaborate with radio stations on projects and events.
  • She also stated that this legislation would enable music artists to spend less time touring and more time with their families.
• She also highlighted how the American Music Fairness Act of 2023 would have the size and the nature of the broadcast radio station determine the scaled fee (starting at just $10 per year) to music artists for the use of their performance rights.
  • She commented that this structure is meant to protect and assure the continued success of radio stations of all sizes.
• She remarked that Congress must swiftly address performance rights on terrestrial radio given the impending advancement of AI technology.
  • She mentioned how AI technology had enabled her husband to release a new song and indicated that this song was the first song ever recorded and released with full artist consent and involvement in a studio setting.
• She warned however that there exist harmful applications of AI technology and noted how this technology is growing significantly.
  • She mentioned how there are an estimated 179,000 unauthorized songs created using AI technology that are already available on the internet.
• She called on Congress to both pass the American Music Fairness Act of 2023 and adopt AI protections for music.
  • She commented that these policies would ensure that artists are paid for their works, that artists control their identities, and that music can continue to be produced moving forward.

Mr. Curtis LeGeyt (National Association of Broadcasters):

• He discussed how local broadcast radio stations have played music for over 100 years and noted how these radio stations expose music artists to new listeners and engage artists with unique interviews and partnerships with local venues.
  • He further highlighted how these radio stations inform, educate, and alert listeners to important events, issues, and emergencies, entertain listeners with sports and talk programming, and serve their local communities and the public interest.
• He stated that broadcast radio stations play a “critical” role as fact-based first informers and emergency lifelines.
  • He commented that this role is especially important given the proliferation of online misinformation and disinformation and the frequency of natural disasters and cellular phone outages.
  • He highlighted how local broadcast radio remains trusted, always on, and freely available without the need for expensive subscriptions or data services.
• He discussed how broadcast radio stations have helped to launch the careers of many music artists and have provided many lasting memories for their listeners.
  • He commented that broadcast radio airplay of music continues to drive music discovery for both new musicians and legacy artists, even considering the “drastic changes” in the media landscape.
• He warned that the American Music Fairness Act of 2023 would undermine the broadcast radio medium and the mutually beneficial relationship between broadcast radio stations and music artists.
  • He contended that this legislation would impose a new royalty on local radio that is financially untenable for radio broadcasters of all sizes.
• He remarked that the American Music Fairness Act of 2023’s “abrupt” change in law would be wholly inconsistent with Congress’s long held approach to copyright policy where updates have been made to account for new and emerging technologies.
  • He asserted that it would be “virtually unprecedented” for Congress to upend copyright laws that have governed decades-long relationships and upon which entire industries have been premised on for over a century.
• He discussed how broadcast radio stations invest “considerable sums” in producing content, employing on-air talent, and updating the equipment needed to run successful radio stations.
  • He mentioned how radio stations pay substantial regulatory fees to the FCC. 
  • He also mentioned how radio stations pay hundreds of millions of dollars in annual copyright royalties to performing rights organizations, including ASCAP, BMI, SESAC, and GMR, and to streaming collectives (including SoundExchange).
• He highlighted how local broadcast radio stations are supported solely by advertising revenue and do not charge expensive subscription fees (like streaming and satellite radio competitors charge).
  • He asserted that large technology companies have leveraged their market power to siphon away local advertising revenue and warned that a new performance royalty for music artists could threaten the continued viability of many local broadcast radio stations.
• He noted how 225 U.S. Representatives (including 12 Committee Members) have co-sponsored a resolution supporting the Local Radio Freedom Act and explained that this resolution opposes the imposition of any new fees or taxes on local radio.
  • He expressed the gratitude of his organization, the National Association of Broadcasters, for the support of these Members for the resolution.
• He expressed the National Association of Broadcasters’s readiness and willingness to engage in “good faith” discussions on a holistic legislative proposal that enhances the unique value of broadcast radio to artists without diminishing the ability of broadcast radio stations to serve Americans.
  • He noted how Congress has repeatedly chosen not to impose the recording industry’s “one-sided” royalty proposal on free local radio stations and called on the Subcommittee to continue rejecting this proposal.
• He lastly stated that while the hearing focuses on the singular legislative issue where the radio and recording industries disagree, he expressed hope that the hearing could provide an opportunity to discuss areas of shared interest between the industries.
  • He indicated that one such area of shared interest involves the novel threats and opportunities posed by generative AI technology.

Mr. Michael Huppe (SoundExchange):

• He expressed support for the American Music Fairness Act of 2023 and stated that this legislation would remedy the “egregious fact” that the U.S. remains the only democratic nation in the world without a performance right for music artists on terrestrial radio.
  • He called it embarrassing that the U.S. denies this performance right to music artists given how the U.S. is a leader in intellectual property (IP) and protecting free expression.
• He discussed how IP is a significant contributor to the U.S.’s gross domestic product (GDP) and one of the U.S.’s largest exports.
• He called it “shocking” that the U.S. joins countries like North Korea, Iran, and Cuba in not paying artists when their music is played on terrestrial radio.
  • He emphasized that even Russia and China maintain a public performance right for sound recordings.
• He expressed frustration that certain mediums (such as satellite radio and streaming) provide a performance right while terrestrial radio does not provide such a right, even though these mediums are providing the same music, the same product, and the same consumer experience.
  • He highlighted how Apple, Spotify, Pandora, SiriusXM, TikTok, and YouTube must provide a performance right to music artists while terrestrial radio is not subject to this requirement.
• He noted how the broadcast radio industry had made $15 billion in revenue in 2023 and emphasized that none of this revenue went to the music artists that attract listeners to their radio stations.
• He asserted that radio broadcasters are justifying their non-payment of a performance right to music artists on the “outdated” concept of promotion.
  • He called the use of this justification “ironic” given how 72 percent of the music currently being played on broadcast radio stations is not new music.
• He acknowledged that while broadcast radio stations may provide some promotion of an artist’s music, he asserted that this should never justify a mandatory and non-permissioned taking of the music.
  • He noted how licenses are required for other promotional activities (such as the adoption of a book into a film and the broadcasting of sports) and asserted that music should not be treated differently with respect to its airing on terrestrial radio.
• He remarked that Congress must require that creators be compensated whenever and wherever their music is played, especially when their creations form the basis of the business model of an entire industry.
  • He emphasized that music forms the basis of the terrestrial radio business model.
• He asserted that the provision of a performance right to music artists for terrestrial radio airplay will become even more critical as the music industry responds to the growth of AI technology.
• He further lamented how the U.S.’s lack of a performance right for U.S. music artists for the terrestrial radio airplay of their music causes U.S. music artists to lose out on royalties generated overseas.
  • He explained how foreign countries will collect performance royalties for U.S. music played overseas on terrestrial radio and will not remit these royalties to the U.S. music artists.
• He estimated that U.S. artists lose almost $300 million of taxable U.S. income each year because the U.S. lacks a performance right for music artists on terrestrial radio.
  • He indicated that this lost money is in addition to the hundreds of millions of dollars that U.S. artists are already missing out on domestically because of the U.S.’s lack of a performance right for music artists for terrestrial radio airplay of their music.
• He remarked that music artists deserve to be compensated for the use of their work on terrestrial radio and that this lack of a performance royalty for music artists on terrestrial radio deprives smaller music artists of deserved compensation.
  • He indicated that these smaller artists include backup singers, session musicians, studio producers, mixers, and other professionals.
• He noted how the dozen states represented on the Subcommittee have over 100,000 music creators who would be eligible for royalties from terrestrial radio airplay if the American Music Fairness Act of 2023 were to be enacted into law.
• He stated that every U.S. administration since the Carter administration (including the Trump and Biden administrations) has expressed support for the concepts embodied in the American Music Fairness Act of 2023.
  • He also mentioned how the U.S. Conference of Mayors had recently passed a resolution in favor of this legislation.
• He concluded his opening statement by reiterating his call for Congress to pass the American Music Fairness Act of 2023 and asserting that music artists deserve a performance right for the airing of their music on terrestrial radio.

Mr. Eddie Harrell, Jr. (Radio One, Inc):

• He remarked that the imposition of a new performance royalty for music artists imposed on local broadcast radio stations would create harm for local broadcast radio stations, radio listeners, and the recording industry.
• He discussed how his company, Radio One, Inc., is the U.S.’s largest network of urban broadcast radio stations that encompasses over 70 broadcast radio stations across 13 U.S. markets.
  • He testified that Radio One currently reaches 17 million weekly listeners and connects one million annual local event attendees with music and musicians.
  • He also testified that Radio One employs more than 1,200 people.
• He remarked that broadcast radio stations (including his company’s radio stations) provide a “uniquely free service” and highlighted how Radio One broadcast radio stations serve as the source for the latest R&B, hip hop, and gospel music.
• He discussed how broadcast radio stations serve as trusted sources of information during natural disasters and emergency situations.
  • He mentioned how Radio One’s Cleveland, Ohio broadcast radio stations have consistently served as a conduit for communication between the city’s mayor, police chief, and the general public.
• He also stated that broadcast radio provides a “key platform” for recording artists and noted how U.S. broadcasters have helped to publicize new music artists.
  • He testified that record labels are constantly contacting his company’s broadcast radio stations to promote new music artists and seek out radio airplay to publicize their music.
• He further discussed how broadcast radio stations hold music events that provide audiences to new music artists.
  • He recounted how one of his company’s radio stations had held a 2014 event that brought significant attention to the then-up-and-coming hip hop group Migos.
• He noted however that local radio stations are currently competing against large technology companies and global streaming services.
  • He commented that these large technology companies and global streaming services are using new AI tools to attempt to replicate the unique sounds and service of local broadcast radio.
• He remarked that imposing a performance royalty for music artists on broadcast radio would diminish the music that broadcast radio stations play for their audiences, decrease radio station investments in staff and community service, reduce music marketplace competition, and destroy a promotional platform that benefits music artists.
• He noted that while broadcast radio stations will employ AI tools to find new efficiencies in their back office operations, he asserted that AI technology will not replace the essence of local broadcasting.
  • He also asserted that AI technology will not replicate the entrepreneurial spirit or programming expertise of humans.
• He lastly thanked the U.S. House of Representatives for their broad support of the resolution supporting the Local Radio Freedom Act and called on the Committee to refrain from imposing a performance royalty for music artists on terrestrial radio.
  • He warned that such a performance royalty would jeopardize the continued viability of local broadcast radio stations employing local staffs, prevent new music artists from being discovered, and harm Americans that rely upon free local radio for news, entertainment, talk, sports, and reliable information. 

Congressional Question Period:

Rep. Scott Fitzgerald (R-WI):

• Rep. Fitzgerlad asked Mr. LeGeyt to indicate whether terrestrial radio stations already pay performance royalties to music artists for sound recordings when their stations are streamed online.
  • Mr. LeGeyt noted how terrestrial radio stations pay “significant” performance royalties to songwriters for sound recordings that are aired via terrestrial radio and streaming. He explained that these royalties are paid through ASCAP, BMI, SESAC, and GMR and indicated that these payments total hundreds of millions of dollars. He also mentioned how terrestrial radio stations pay an additional royalty on sound recordings when those performances take place online.
• Rep. Fitzgerald asked Mr. LeGeyt to indicate whether the American Music Fairness Act of 2023 would require terrestrial radio stations to make two separate performance royalty payments if enacted.
  • Mr. LeGeyt answered affirmatively. He remarked that the “burdensome” costs associated with providing performance royalties to music artists has made it “extremely difficult” for local broadcast radio stations to innovate on their online offerings. He contended that it would be “devastating” to add a performance royalty for music artists on terrestrial radio airplay. He stated that broadcast radio stations are already generating “significant” promotional value for music artists.
• Rep. Fitzgerald then noted how some stakeholders have argued that the American Music Fairness Act of 2023 could lead to the elimination of all transmission and retransmission exemptions granted in the DPRA. He expressed concerns that the elimination of these exemptions could impact the ability of restaurants and bars to play music. He asked Mr. Huppe to respond to these concerns regarding the American Music Fairness Act of 2023.
  • Mr. Huppe remarked that the recording industry is interested in ensuring that all music creators are paid fairly for the use of their content on terrestrial radio. He expressed the recording industry’s desire for developing a technology neutral solution to this issue and for ensuring that large broadcast radio stations do not receive unfair treatment. He asserted that restaurants and bars are fundamentally different from broadcast radio. He elaborated that the main value proposition of restaurants and bars is food and drink while the main value proposition of broadcast radio is music.
• Rep. Fitzgerald then noted how supporters of the American Music Fairness Act of 2023 argue that U.S. music artists are losing $300 million per year in overseas revenue from terrestrial radio performances of their works. He expressed sympathy for this argument and commented that the U.S. should work to ensure that U.S. music artists receive compensation owed to them. He stated however that it remains unclear whether major record labels are already collecting international performance royalties for U.S. artists. He asked Mr. LeGeyt to address this situation.
  • Mr. LeGeyt remarked that U.S. music artists should be permitted to collect royalties generated overseas that the artists are entitled to under a foreign country’s laws. He argued however that it is unfair to compare the relationship between the broadcast and recording industries in the U.S. to the relationship between these industries in other countries. He stated that it has been difficult to substantiate the amount of performance royalties that U.S. artists generate when their music is performed overseas. He called it appropriate to question how the recording industry’s international subsidiaries are currently collecting these performance royalties.
• Rep. Fitzgerald expressed interest in determining whether U.S. music publishers that operate globally are already collecting performance royalties abroad on behalf of their U.S. music artists and keeping these performance royalties for themselves. He asked Mr. LeGeyt to address how U.S. music publishers are operating abroad.
  • Mr. LeGeyt stated that he does not have a primary understanding of whether U.S. record labels collect and remit performance royalties generated overseas to their U.S. music artists. He suggested that Rep. Fitzgerald direct this question to U.S. record labels. He testified that he has heard anecdotes of U.S. record labels failing to remit performance royalties generated overseas to their U.S. music artists.
  • Mr. Huppe mentioned how SoundExchange maintains between 50 and 60 reciprocal agreements globally covering 85 percent of the world. He stated that record labels often fail to collect and remit performance royalties generated overseas to U.S. music artists. He estimated that up to $300 million in performance royalties being generated abroad are not being repatriated to the U.S.

Subcommittee Ranking Member Jerrold Nadler (D-NY):

• Ranking Member Nadler noted that Congress had extended copyright procedures to sound recordings in 1971 largely in response to the increasing piracy of records and tapes. He mentioned how a contemporary U.S. House of Representatives report had found that piracy had caused over $100 million in economic losses at the time. He also stated that Congress had “presciently” found that the digital transmission of sound recordings would become increasingly important and that appropriate copyright protections were required when it had extended digital performance rights in 1995. He emphasized that Congress had made changes to U.S. copyright laws in 1971 and 1995 in response to technological evolutions. He asked Mr. Huppe to indicate whether the U.S. is currently experiencing a significant change in its music ecosystem that warrants an update to U.S. copyright laws.
  • Mr. Huppe answered affirmatively. He highlighted how music streaming currently accounts for 85 percent of the music industry’s revenue. He mentioned how the music industry had previously relied upon a sales-based model and noted how physical music purchases had been key to sustaining the music industry. He expressed frustration that radio broadcasting receives special treatment and that the radio broadcasting compensation model does not account for these new market realities.
• Ranking Member Nadler then noted how Mr. Travis’s music is regularly played on terrestrial radio stations. He asked Mr. and Mrs. Travis to discuss why it is important for Mr. Travis’s long-term care that Mr. Travis receive performance royalties when his music is aired on terrestrial radio stations.
  • Mrs. Travis testified that her family has financially relied upon music royalties since her husband had experienced his stroke. She also remarked that a performance royalty for music artists for terrestrial radio airplay is key for enabling the next generation of music artists to pursue financially viable careers. She stated that while terrestrial radio had been key to building her husband’s music career, she commented that the role of terrestrial radio in the music industry has changed significantly since the launch of her husband’s music career 40 years ago.
• Ranking Member Nadler then expressed interest in the music industry’s use of generative AI technology. He stated that while generative AI technology can serve as a useful tool for music creators, he also stated that this technology could pose dangers when it uses a music artist’s work or likeness without obtaining permission or providing compensation. He asked Mr. and Mrs. Travis to discuss how AI technology is helping Mr. Travis to continue to create music.
  • Mrs. Travis mentioned how her husband has recently released his first song since he had suffered his stroke 11 years prior and indicated that AI technology had enabled the creation of this song. She explained that this song was created using stems from around 45 of her husband’s previous songs and studio musicians. She described the process of creating this song as “pretty emotional” and stated that the song is very “authentic, artistic, and humanistic.”
• Ranking Member Nadler asked Mr. and Mrs. Travis to indicate whether AI technology users should be allowed to create unauthorized copies of a singer’s voice.
  • Mrs. Travis answered no.
• Ranking Member Nadler then noted how some argue that small radio broadcasters cannot afford to compensate musicians for the performance of their sound recordings. He asked Mr. Huppe to indicate whether the American Music Fairness Act of 2023 adequately accounts for this concern.
  • Mr. Huppe remarked that the American Music Fairness Act of 2023 would adequately protect small radio broadcasters. He stated that this legislation seeks to preserve small radio broadcasters so that there is more competition and variety in radio. He noted how radio stations that make $1.5 million or less will need to pay just $500 annually in performance royalties to music artists. He indicated that this $500 amount is equivalent to the lowest fee to join the National Association of Broadcasters. He added that $500 is less than the cost for a student to attend the National Association of Broadcasters Radio Show.
• Ranking Member Nadler quipped that small radio stations could easily afford the American Music Fairness Act of 2023’s $500 performance royalty fee through simply forgoing membership in the National Association of Broadcasters.

Full Committee Chairman Jim Jordan (R-OH):

• Chairman Jordan noted how Congress has considered whether music artists deserve a performance right on terrestrial radio for over 100 years. He remarked that Congress must address this issue given how music is one of the U.S.’s most important cultural exports. He also stated that terrestrial radio is an important American institution that provides millions of Americans with news and entertainment. He noted how the Committee has jurisdiction over copyright matters and commented that the Committee must strike the appropriate balance between the interests and rights of content creators and the interests and rights of content distributors. He stated that Congress has historically required broad stakeholder participation to make reforms to U.S. copyright laws. He expressed optimism that the Committee can reach an agreement that is fair to music creators, radio broadcasters, U.S. taxpayers, and consumers. He noted how the Committee has historically advanced copyright policies on a consensus basis and asserted that copyright policy should not be a partisan issue.

Rep. Zoe Lofgren (D-CA):

• Rep. Lofgren asked Mr. Huppe and Mr. LeGeyt to address how the American Music Fairness Act of 2023 would impact the ability of broadcast radio stations to provide critical emergency broadcasts. She noted how Mr. LeGeyt had argued that providing a performance royalty to U.S. music artists for terrestrial radio airplay of their recordings would come at the expense of investments in emergency broadcast systems. She noted however that Mr. Huppe had contended that other countries have proven that it is possible for broadcast radio stations to both pay music artists royalties for the terrestrial radio airplay of their recordings and fund robust emergency broadcast systems.
  • Mr. LeGeyt remarked that the U.S.’s locally-focused freely available broadcast radio business model cannot be compared to broadcast radio business models in other countries. He described the U.S.’s broadcast radio business model as “time-tested.” He stated that federal copyright and communications laws include special exemptions and provisions to ensure that U.S. broadcast radio stations remain locally-focused, functioning during times of emergency, and freely accessible to all consumers (including Americans that lack broadband service access).
• Rep. Lofgren interjected to ask Mr. LeGeyt to address whether the American Music Fairness Act of 2023 would impact consumer access to emergency broadcast services.
  • Mr. LeGeyt asserted that local U.S. broadcasters are currently operating on “extremely tight margins.” He stated that the U.S. media landscape has been very disrupted and noted how large technology platforms are taking advertising revenues that have traditionally gone to local broadcasters. He acknowledged that while the American Music Fairness Act of 2023 provides lower performance royalty rates for smaller broadcast radio stations, he called the focus on these lower rates a “red herring.” He stated that this legislation would subject more than 4,000 local broadcast stations to CRB set rates, which would total hundreds of millions of dollars. He asserted that these high costs would make local broadcast radio service unviable.
• Rep. Lofgren then asked Mr. Huppe to address whether the American Music Fairness Act of 2023 would impact consumer access to emergency broadcast services.
  • Mr. Huppe noted how the U.S. already has news, talk, and sports broadcast radio stations that are required to provide emergency services and pay their talent. He highlighted how these broadcast radio stations remain profitable. He contended that U.S. broadband radio stations therefore could pay music artists for the use of their recorded works. He then disputed the assertions that the U.S. broadcast radio industry is facing insurmountable financial pressures. He noted how the U.S. broadcast radio industry is valued at $15 billion and how 88 percent of all Americans listen to broadcast radio. He stated that the U.S.’s largest radio broadcast groups are becoming bigger and more powerful. He further noted how iHeartRadio’s earnings before interest, taxes, and amortization (EBITA) has consistently been around 25 percent over the previous eight years.
• Rep. Lofgren lastly expressed interest in how Mr. Travis had been able to create new music using AI technology. She remarked that AI technology has many potential benefits. She discussed how the Library of Congress (through the U.S. Copyright Office) is examining how to determine if AI technology is being used as a tool to help create a given work or if AI technology is being used as the sole creator of a given work. She noted how works created without a human component cannot receive federal copyright protection. She expressed hope that Mr. and Mrs. Travis would provide input to the U.S. Copyright Office. She commented that Mr. and Mrs. Travis’s experience would be instructive to the U.S. Copyright Office as it works to address AI technology.

Rep. Nathaniel Moran (R-TX):

• Rep. Moran discussed how local broadcast radio stations play an important role in rural America and often serve as the only source of local news and information for their communities. He added that local broadcast radio stations provide critical emergency information following severe weather events. He asked Mr. LeGeyt to discuss how local broadcast radio stations promote music and the recording artists who perform the music.
  • Mr. LeGeyt remarked that broadcasters are unique among media companies in that broadcasters are located in the communities in which they serve. He commented that the local nature of broadcasters results in broadcasters having stronger relationships with their audiences. He further noted how the free nature of broadcast radio provides broadcast radio with significantly greater reach than other services (especially within rural areas). He concluded that broadcast radio’s promotional value is unmatched because it is freely available and tethered to a local focus.
• Rep. Moran asked Mr. LeGeyt to indicate whether there exists a way to quantify the promotional value provided by local broadcast radio stations.
  • Mr. LeGeyt testified that the National Association of Broadcasters has estimated that the promotional value of broadcast radio is as high as $2.4 billion. He acknowledged that while consumer music listening habits have changed “dramatically” over the history of radio, he asserted that broadcast radio stations maintain an unparalleled ability to drive music discovery.
• Rep. Moran asked Mr. LeGeyt to confirm that broadcast radio stations do not charge music artists for their promotional services.
  • Mr. LeGeyt testified that broadcast radio stations do not charge music artists for their promotional services. He mentioned how there exist payola laws that prevent radio stations from charging music artists for promotional services.
• Rep. Moran acknowledged that music artists want to be compensated for their time, talents, and efforts on broadcast radio. He stated however that broadcast radio also provides music artists with promotional value. He asked Mr. LeGeyt to indicate whether record label promoters are expressing this sentiment.
  • Mr. LeGeyt commented that Mr. Harrell would be better situated to answer Rep. Moran’s question because Mr. Harrell manages broadcast radio stations. He stated however that record label promoters are likely not requesting that broadcast radio stations abstain from playing the music of their artists.
• Rep. Moran asked Mr. Harrell to indicate whether record label promoters view broadcast radio as providing promotional value for their artists.
  • Mr. Harrell expressed agreement with Mr. LeGeyt’s response. He testified that music artists are making daily requests to his broadcast radio stations to play their music. He described the relationship between record labels and broadcast radio stations as symbiotic and highlighted how broadcast radio stations provide important promotional capabilities for music artists.
• Rep. Moran mentioned how many music artists have indicated that local broadcast radio stations have played key roles in launching their careers. He noted how the American Music Fairness Act of 2023 would charge as little as $10 for smaller broadcast radio stations to play music. He asked Mr. Harrell to explain why smaller radio broadcasters remain opposed to the American Music Fairness Act of 2023.
  • Mr. Harrell highlighted how topline revenues for broadcast radio stations are not growing and stated that the imposition of new expenses (such as the imposition of performance royalties for music artists) would force broadcast radio stations to reduce their expenditures. He commented that the imposition of new expenses could cause broadcast radio stations to reduce or eliminate their community service projects.
• Rep. Moran then stated that he does not intend to diminish the arguments in favor of the American Music Fairness Act of 2023 and called himself an advocate for music artists. He mentioned how he supports the No AI FRAUD Act of 2024 and commented that this legislation would protect music artists from intrusive AI technology. He expressed interest in working to achieve consensus on the provision of a performance right for music artists on terrestrial radio.
  • Mr. Huppe stated that there may or may not exist promotional value for music played on terrestrial radio. He noted that the American Music Fairness Act of 2023 would direct the CRB to consider promotional value when setting performance royalty rates for music artists. He stated that if radio broadcasters believe that their stations provide promotional value to music artists, then these radio broadcasters should feel confident that the promotional value of their services would be factored into the CRB’s performance royalty rates for music artists.

Rep. Adam Schiff (D-CA):

• Rep. Schiff mentioned how he is a co-sponsor of the American Music Fairness Act of 2023. He noted how his Congressional District includes many music creators that financially rely upon music royalty payments. He then expressed interest in how Mr. Travis had recently created a song using generative AI technology. He asked Mr. and Mrs. Travis to discuss the process of creating a song using generative AI technology. He also asked Mr. and Mrs. Travis to indicate how they would feel if someone else employed AI technology to recreate Mr. Travis’s voice without their permission. He further asked Mr. and Mrs. Travis to discuss the importance of providing artists with ownership over the ability to train a generative AI model using the artist’s voice.
  • Mrs. Travis described the experience of her husband hearing his voice again in a new song as “very emotional” and commented that her and her husband did not believe that her husband could ever record new music again. She stated that Mr. Travis’s song created using generative AI technology was “humanistic and artistic.” She mentioned how Mr. Travis had taken 11 months to record his new song using generative AI technology and commented that this technology had exceeded expectations.
• Rep. Schiff asked Mr. and Mrs. Travis to comment on the potential for other people to use AI technologies to recreate Mr. Travis’s voice without permission or authorization and without compensating Mr. Travis. He also asked Mr. and Mrs. Travis to address how this use of AI technologies to create unauthorized works based on Mr. Travis’s previous works would dilute Mr. Travis’s personal brand.
  • Mrs. Travis compared the use of AI technologies to make unauthorized use of her husband’s voice to identity theft and asserted that this unauthorized use constitutes an infringement on her husband’s IP and likeness. She commented that all music artists likely have similar views on this type of situation. She asserted that there need to exist laws to prevent people from using a music artist’s work without authorization and AI technologies to create new music. She remarked that people seeking to make use of a music artist’s work to create their own music should obtain consent from the original music artist, provide compensation to the original music artist, and provide attribution to the original music artist. She further stated that AI technology is quickly evolving, which necessitates swift legislative action to protect music artists.
• Rep. Schiff expressed gratitude for the fact that Mr. Travis can continue creating new music.

Rep. Laurel Lee (R-FL):

• Rep. Lee expressed interest in exploring how U.S. music artists are treated differently than foreign music artists in terms of compensation, the granting of performance rights, and the provision of royalties. She asked Mr. Huppe to elaborate on how U.S. music artists are treated relative to foreign music artists.
  • Mr. Huppe noted how the U.S. is the only democratic nation in the industrialized world that does not pay performance rights to music artists for terrestrial radio airplay. He stated that the U.S.’s failure to provide a performance right to music artists causes many countries to not pay U.S. music artists performance rights for terrestrial radio airplay in their countries. He estimated that this lack of a performance right for music artists on terrestrial radio is causing U.S. artists to forgo $300 million annually. He described this situation as a “tremendous injustice” that has existed for over 100 years. He expressed hope that Congress would address this situation.
• Rep. Lee asked Mr. Huppe to indicate whether the $300 million that U.S. artists are forgoing annually due to the U.S.’s lack of a performance right for terrestrial radio airplay exceeds what the U.S. would pay to foreign artists if the U.S. were to establish a performance right for terrestrial radio airplay.
  • Mr. Huppe stated that it is difficult to project whether the American Music Fairness Act of 2023 would cause the amount of foreign terrestrial radio royalties paid out to U.S. music artists to exceed the amount of U.S. terrestrial radio royalties paid out to foreign music artists. He noted how this legislation would have music undergo a performance royalty rate setting process. He highlighted how many parts of the music industry already undergo a royalty rate setting process that considers promotional value, substitution, capital investments, and the value propositions of involved parties. He remarked that the American Music Fairness Act of 2023 ultimately seeks to ensure that music artists are fairly compensated for their works.
• Rep. Lee asked Mr. Huppe to indicate whether there exist procedural impediments that would prevent or inhibit the expansion of royalties for the performance of sound recordings to cover terrestrial radio.
  • Mr. Huppe described the American Music Fairness Act of 2023 as “fairly simple” legislation that would remove the exemption that radio broadcasters have from paying performance royalties to music artists when their songs are played on terrestrial radio. He stated that this legislation would treat radio broadcasters the same as every other music delivery platform. He highlighted how other music services (including Spotify and SiriusXM) provide performance royalties to music artists. He also noted how terrestrial radio stations that simulcast their broadcasts online must pay performance royalties to music artists for these online airings. He reiterated that this legislation would remove the exemption that these broadcast radio stations have from paying performance royalties to music artists for the airing of their songs on terrestrial radio and treat these stations the same as other music delivery platforms. He further asserted that it would be “fairly simple” for broadcast radio stations to pay out performance royalties to music artists for terrestrial radio airplay. He emphasized that these stations are already paying out performance royalties to music artists for online simulcasts and commented that the payment of additional performance royalties would not be administratively complex to implement.
• Rep. Lee then discussed how local broadcast radio stations often engage in beneficial community service efforts. She asked Mr. Harrell to discuss how the passage of the American Music Fairness Act of 2023 would impact local broadcast radio stations.
  • Mr. Harrell remarked that broadcast radio stations are different from other music delivery platforms and noted how other music delivery platforms do not provide the same local services as broadcast radio stations. He recounted how all 21 broadcast radio stations in Cleveland, Ohio (which were owned by competitor companies) had stopped music in response to racial tensions in the city to host a forum on race. He commented that other music delivery platforms cannot hold such a forum. He further highlighted how broadcast radio stations can immediately change their programming to provide emergency alerts and noted how other music delivery platforms lack this capability.

Rep. Madeleine Dean (D-PA):

• Rep. Dean expressed appreciation for the hearing’s discussion regarding the No AI FRAUD Act of 2024 and indicated that she is a co-author of this legislation. She stated that this legislation would provide all Americans with a property right for voices and likenesses. She then expressed interest in how Mr. Travis had been able to use generative AI technology to release new music, despite his physical ailments. She asked Mr. and Mrs. Travis to discuss the primary AI technology-related challenges that music artists face. She also asked Mr. and Mrs. Travis to discuss how other music artists view the impact of AI technology on music.
  • Mrs. Travis mentioned how other music artists have expressed mixed views regarding the use of AI technology. She noted how these music artists are afraid that AI technology could be used to perpetrate fraud. She stated however that many music artists view AI technology as having potential benefits and are merely unsure how this technology will be deployed. She remarked that AI technology can be deployed beneficially in music so long as it relies upon the consent of artists and human involvement. She contended that there must exist laws to prevent the fraudulent use of AI technology in music.
• Rep. Dean expressed interest in identifying potential guardrails for the use of AI technology in generating music. She requested that Mr. and Mrs. Travis provide recommendations for how music artists can control their own voices, images, likenesses, and sounds when AI technology is used. She then indicated that her question period time had expired.

Rep. Thomas Massie (R-KY):

• Rep. Massie asked Mr. Harrell to explain the CRB’s role and function.
  • Mr. Harrell indicated that he is not familiar enough with the CRB to provide an answer to Rep. Massie’s question.
  • Mr. LeGeyt stated that Mr. Harrell’s lack of familiarity with the CRB highlights the challenges faced by local broadcast radio stations navigating various copyright fees. He commented that local broadcast radio stations largely view copyright fees as an expense that limits their ability to serve their communities. He then explained that the CRB sets royalty rates for certain types of public performances. He noted how the CRB uses a three-judge panel within the U.S. Copyright Office to set these rates.
• Rep. Massie mentioned how many music artists will release cover versions of popular songs. He asked the witnesses to indicate whether different music artists will be paid the same amount in royalties for their cover versions of the same song.
  • Mr. Huppe discussed how the CRB is a system established by Congress and noted how the U.S. has maintained a copyright rate setting tribunal for over 100 years. He highlighted how many areas of copyright law employ similar systems and commented that the CRB system is functioning well. He mentioned how Congress had reaffirmed its belief in the CRB system in 2018 through its passage of the Orrin G. Hatch–Bob Goodlatte Music Modernization Act.
• Rep. Massie asked Mr. Huppe to indicate whether different music artists will be paid the same amount in royalties for their cover versions of the same song.
  • Mr. Huppe answered affirmatively.
• Rep. Massie then questioned whether a tribunal of judges could fairly decide what would constitute appropriate royalty rates for the performance of music. He stated that music artists would likely vary significantly in terms of how they value the use of their works on music delivery platforms. He elaborated that some music artists may prioritize the promotion of their works while other music artists may prioritize generating royalties for their works. He asked Mr. LeGeyt why the U.S. could not provide a free market for performance rights where music artists would set their performance rights rates for broadcast radio.
  • Mr. LeGeyt stated that the CRB applies a “one size fits all” approach in setting performance royalty rates and commented that this system is not a free market. He noted however that the U.S. broadcast radio market involves 15,000 broadcast radio stations and thousands of different music ownership groups. He stated that the CRB provides efficiencies in setting performance royalty rates across this fragmented market. He commented that having individual market negotiations across these various parties would be difficult to achieve.
• Rep. Massie stated that many commonplace technologies were once viewed as inconceivable. He suggested that there might exist a solution to the payment of performance royalties for the airing of music that involves free markets.

Subcommittee Chairman Darrell Issa (R-CA):

• Chairman Issa highlighted how the U.S. motion picture industry has a willing buyer, willing seller model for the use of copyrighted works. He commented however that this model often limits the ability of films to use certain copyrighted works.

Note: The Subcommittee took an approximately one-hour recess at this point of the hearing for votes.

Subcommittee Ranking Member Hank Johnson (D-GA):

• Ranking Member Johnson noted that while music album sales have fallen “drastically” over the previous 20 years, he highlighted how broadcast radio has remained relatively popular over the same period. He mentioned how the Pew Research Center had found that the percentage of Americans aged 12 or order who listen to traditional terrestrial radio in a given week had fallen just 10 percentage points between 2009 and 2022. He asked Mr. Huppe to respond to the concerns that providing a performance royalty to music artists for terrestrial radio airplay would harm the continued viability of local broadcast radio stations. He commented that these local broadcast radio stations appear to be weathering technological changes well.
  • Mr. Huppe noted how broadcast radio stations pay for other types of content while achieving profitability and providing community services. He highlighted how music is the largest part of the broadcast radio industry’s revenue. He also noted how the American Music Fairness Act of 2023 would provide special accommodations to small local radio broadcasters. He indicated that any independent broadcast radio station making $1.5 million annually or less would pay just $500 per year for all of their music under the legislation. He noted that while opponents of the American Music Fairness Act of 2023 are highlighting the promotional value of broadcast radio airplay of music, he stated that the promotional value of broadcast radio airplay would be accounted for in the CRB’s royalty rate setting process under the legislation. He asserted that this legislation’s establishment of a performance royalty for music artists for the terrestrial radio airplay of their music would therefore not harm the viability of broadcast radio stations.
• Ranking Member Johnson asked Mr. LeGeyt to estimate how much the average broadcast radio station with annual revenues exceeding $1.5 million would pay in performance royalties to music artists under the American Music Fairness Act of 2023.
  • Mr. LeGeyt estimated that individual broadcast radio stations would have to pay millions of dollars in royalties to music artists if the U.S. were to establish a performance right for music artists for terrestrial radio airplay. He commented that this estimate is largely based on the CRB’s current framework for setting performance royalties for the streaming of terrestrial radio stations. He asserted that these royalty payment obligations would impact the ability of local terrestrial radio stations to serve their communities.
• Ranking Member Johnson asked Mr. LeGeyt to confirm that the American Music Fairness Act of 2023 would require broadcast radio stations to pay out millions of dollars in performance royalties to music artists. He noted how the U.S. radio broadcast industry receives $15 billion in annual revenues.
  • Mr. LeGeyt asserted that broadcast radio stations would pay out a significant amount in performance royalties to music artists under the American Music Fairness Act of 2023. He acknowledged that the American Music Fairness Act of 2023 would not set performance royalty rates and would instead establish criteria for setting performance royalty rates. He asserted however that the performance royalty rates imposed on broadcast radio stations would be “devastating.” He stated that current performance royalty rates for the streaming of broadcast radio stations are unsustainable and prevent these stations from innovating within the music streaming space.
• Ranking Member Johnson asked Mr. Huppe to respond to Mr. LeGeyt’s previous statements.
  • Mr. Huppe expressed disagreement with Mr. LeGety’s previous statements. He noted how the CRB considers numerous factors when setting royalty rates and indicated that one of these factors is the licensee’s ability to pay. He also stated that the CRB will consider promotional value and the value provided by all involved parties when setting royalty rates. He commented that the CRB uses these factors to set royalty rates that will be affordable for broadcasters.

Rep. Ben Cline (R-VA):

• Rep. Cline mentioned how many songwriters had begun their careers in his Congressional District and indicated that he serves as co-chair of the Congressional Songwriters Caucus. He also mentioned how his Congressional District contains many local broadcast radio stations across three markets. He stated that Congress should protect the IP of music artists while acknowledging the community benefits that local broadcast stations provide to their communities. He then noted how Mr. and Mrs. Travis had discussed how the shift from physical album sales to online music streaming has impacted the livelihoods of recording artists. He asked Mr. and Mrs. Travis to address whether the changes in how listeners find new music have impacted the balance between the benefits of broadcast radio play and the loss of royalties.
  • Mrs. Travis testified that music streaming platforms provide robust royalty payments to music artists for the use of their works. She added that people can find the music of their favorite music artists on these streaming platforms. She stated however that music artists are missing out on hundreds of millions of dollars each year in performance royalties from the broadcast radio airplay of their music. She expressed her and her husband’s dissatisfaction with this situation.
• Rep. Cline interjected to note that recording artists do not receive royalties for broadcast radio airplay of their music while songwriters do receive royalties for the radio airplay of the recording artist’s music. He asked Mr. and Mrs. Travis to indicate whether this dynamic has any impact on the decision of music artists to record their own music.
  • Mrs. Travis stated that music artists are cognizant of this dynamic and noted how some music artists are not songwriters. She acknowledged that while many local broadcast radio stations are small businesses, she emphasized that music artists also function as small businesses. She elaborated that music artists retain staff and bands and incur travel and insurance expenses. She commented that a lack of compensation for music artists undermines their ability to financially survive.
• Rep. Cline then noted how Mr. Harrell’s testimony had indicated that Radio One’s broadcast radio stations host talk radio programming. He asked Mr. Harrell to indicate whether the talk radio hosts on Radio One’s broadcast radio stations are paid for the airing of their content.
  • Mr. Harrell indicated that the talk radio hosts on Radio One’s broadcast radio stations are paid for the airing of their content. He also stated that these talk radio hosts serve as “ambassadors in their cities.”
• Rep. Cline interjected to ask Mr. Harrell to indicate why talk radio hosts receive compensation for the airing of their content while music artists do not receive compensation for the airing of their content.
  • Mr. Harrell stated that talk radio hosts receive compensation because they are staff members of broadcast radio stations. He noted how talk radio hosts will participate in job fairs, health fairs, hospital visits, and small business events.
• Rep. Cline asked Mr. Harrell to indicate whether music artists also engage in community activities and volunteering activities.
  • Mr. Harrell answered affirmatively. He also stated that broadcast radio stations provide value to music artists beyond the airing of their music. He mentioned how broadcast radio stations will engage in partnerships with music artists and indicated that music artists are paid for these partnerships.

Subcommittee Chairman Darrell Issa (R-CA):

• Chairman Issa noted how Radio One’s broadcast radio stations will air syndicated talk radio programming. He asked Mr. Harrell to indicate whether these syndicated talk radio hosts engage in community activities in all of the markets in which their programs are played.
  • Mr. Harrell stated that syndicated talk radio hosts will travel to different markets to participate in community events.

Rep. Glenn Ivey (D-MD):

• Rep. Ivey expressed interest in developing a performance right for music artists on terrestrial radio that does not threaten the viability of broadcast radio stations. He then asked Mr. Huppe and Mr. LeGeyt to explain how Spotify pays performance royalties to music artists for the streaming of their music on the Spotify platform.
  • Mr. Huppe noted that Spotify typically operates under direct licenses with the owners of sound recordings. He commented that Spotify is a more complex and interactive service than broadcast radio, which means that Spotify must typically obtain the rights to sound recordings from record labels. He then remarked that SoundExchange does not want terrestrial radio to disappear and that SoundExchange recognizes the value that terrestrial radio plays in the music space. He added that broadcast radio stations engage in valuable community service activities. He stated however that music artists should not be expected to support the community service activities of broadcast radio stations. He asserted that broadcast radio stations should pay music artists for the use of their performance rights given that these music artists serve as the basis for the broadcast radio business model.
  • Mr. LeGeyt testified that the National Association of Broadcasters has engaged in conversations with Congress on developing reforms for the U.S.’s current performance royalty system. He stated that the current rules and royalty rates for music streaming are inhibiting music airplay on broadcast radio stations and the ability of radio broadcasters to expand their streaming capabilities.
• Rep. Ivey interjected to ask Mr. LeGeyt to explain how current rules and royalty rates for music streaming are inhibiting radio broadcasters.
  • Mr. LeGeyt noted that local broadcast radio stations cannot charge subscriptions for their services and commented that this makes local broadcast radio fundamentally different from music streaming services. He also stated that local broadcast radio stations cannot nationalize their programming without losing their competitive advantage. He emphasized that broadcast radio stations are located within the communities that they serve and offer critical local news and emergency service functions. He stated that while broadcast radio stations view internet streaming as a way to expand their reach, he asserted that the CRB’s royalty rates are inhibiting the ability of these broadcast radio stations to make use of internet streaming. He remarked that reforms to the U.S.’s performance royalty system should address royalty rates for internet streaming of broadcast radio stations. He commented that these reforms would increase the number of listeners of broadcast radio content, which would result in more royalties for all parties.
• Rep. Ivey asked the witnesses to indicate whether the current legal and regulatory regime governing music royalty payments prevents reforms to the system absent Congressional action.
  • Mr. Huppe remarked that stakeholders have previously attempted to negotiate reforms to the U.S. music royalty payments system. He stated however that the broadcast radio industry has repeatedly delayed these negotiations in the hopes that a future Congress would impose a system that would be more favorable to their industry.
  • Mr. LeGeyt disputed Mr. Huppe’s characterization of the negotiations surrounding reforms to the U.S.’s music royalty payments system. He remarked that the National Association of Broadcasters has expressed its desire to participate in the development of reforms to the U.S.’s music royalty payments system. He asserted however that the recording industry has not sufficiently engaged in these negotiations. He expressed optimism that the U.S. could develop a solution to the issue that benefits listeners, local communities, and music artists. He reiterated his commitment to engage in these negotiations.
• Rep. Ivey expressed interest in working with the recording and broadcast industries on developing reforms to the U.S.’s music royalty payments system.

Rep. Russell Fry (R-SC):

• Rep. Fry asked the witnesses to address how the creation of a performance royalty for music artists for the terrestrial radio airplay of music would impact local broadcast radio stations.
  • Mrs. Travis remarked that there exist opportunities for music artists and broadcast radio stations to work together on the provision of performance royalties to music artists for the airing of their music on broadcast radio. She asserted that music artists deserve to be compensated when their music is played on broadcast radio. She stated that the payment of such a performance royalty would make music artists more willing to work with broadcast radio stations. She also noted how music artists engage in charitable activities and emphasized that broadcast radio stations are not the only parties engaged in these activities.
  • Mr. Huppe noted how the American Music Fairness Act of 2023 would provide special accommodations for small and independent local broadcast radio stations. He remarked that the provision of performance royalties to music artists for the airing of their work on broadcast radio would ensure that all parties are fairly compensated for their efforts. He stated that broadcasters are “very ardent” about being compensated for the use of their property. He elaborated that broadcasters are focused on obtaining retransmission consent, receiving special treatment for their news content when used by third-party aggregators (such as Google), and ensuring that AI technology applications do not improperly use their content. He contended that music artists are seeking the same level of treatment as broadcasters for the third-party use of their content. He stated that it is difficult for music artists to engage in negotiations with radio broadcasters when the property rights of music artists are not recognized.
  • Mr. LeGeyt remarked that the National Association of Broadcasters is advocating for policies that will enable local broadcast radio stations to serve their local communities. He stated that local broadcast radio stations are the most trusted media sources, freely available, and have unmatched reach. He asserted that his organization’s policy agenda seeks to ensure that local broadcast radio stations have the means to support local communities and provide these communities with otherwise unavailable information.
• Rep. Fry asked Mr. LeGeyt to discuss how the American Music Fairness Act of 2023 would impact the ability of local broadcast radio stations to serve the public during weather emergency situations.
  • Mr. LeGeyt discussed how local broadcast stations provide critical information throughout weather emergency situations. He noted how these broadcast stations will support disaster preparedness efforts, provide news coverage during the weather emergencies when other forms of communication fail, and support rebuilding efforts following weather emergencies. He remarked that broadcast radio and television stations are unique in providing these services. He stated that these services entail people, equipment, and significant expenses. He indicated that broadcast radio stations do not segregate their businesses across music, news, and sports verticals and commented that increased expenses for any vertical will impact all of the verticals. He asserted that the American Music Fairness Act of 2023 would therefore undermine the ability of broadcast radio stations to provide services during emergency weather situations.
• Rep. Fry interjected to ask Mr. LeGeyt to respond to the concerns that the U.S. is the only democratic country in the world to not provide a performance right to music artists for terrestrial radio airplay of their music.
  • Mr. LeGeyt stated that other democratic countries do not have commercial locally-focused broadcast radio systems that are comparable to the U.S.’s local broadcast radio system. He noted how other countries have either nationalized syndicated radio broadcasting or government-funded broadcast radio. He remarked that the resources necessary to enable a freely available locally-focused broadcast radio model are significant and commented that U.S. policies recognize this dynamic. He asserted that the U.S.’s lack of a performance right for music artists for terrestrial radio airplay of their music does not constitute a “loophole.” He stated that this policy is instead a “well-considered” exemption that recognizes terrestrial radio is different from music streaming services. He then emphasized that radio broadcasters pay performance royalties to songwriters when their music is played on terrestrial radio. He also mentioned that radio broadcasters pay performance royalties to music artists when their stations are simulcast on the internet. He testified that the U.S. broadcast radio industry had paid $70 million in performance royalties to SoundExchange in 2023 for these simulcasts. He reiterated his assertion that terrestrial radio is fundamentally different from music streaming.

Subcommittee Chairman Darrell Issa (R-CA):

• Chairman Issa first predicted that the Committee would engage in a bipartisan effort to develop copyright protections for works involving AI technology. He indicated that the recording and broadcast industries appear to be largely in agreement regarding the need to develop such protections. He then asked Mr. Harrell to indicate whether Radio One would be willing to pay some amount of money to resolve the current disputes surrounding the provision of a performance right for music artists for the terrestrial radio airplay of their music.
  • Mr. Harrell answered no.
• Chairman Issa interjected to ask Mr. LeGeyt to confirm that the U.S. broadcasting industry has never proposed a policy solution that would provide performers with a net increase in their revenues absent hypothetical growth.
  • Mr. LeGeyt disputed Chairman Issa’s characterization of the U.S. broadcasting industry’s position. He stated that the U.S. broadcasting industry is basing its position on the recording industry’s claims that there exist $300 million in international performance royalties that are not being repatriated. He commented that these claims remain unsubstantiated.
• Chairman Issa interjected to state that there exists a “high chance” that Europe would find reasons to delay or not pay performance royalties to U.S. artists if they viewed U.S. royalty reforms as not being in good faith. He also asserted that these performance royalties for foreign terrestrial radio airplay are owed to U.S. music artists and that radio broadcasters should not make claim to this money as part of negotiations. He stated that if U.S. broadcasters owned foreign broadcast radio stations, then these broadcasters would be paying performance royalties to music artists for terrestrial radio airplay on these stations. He also disputed Mr. LeGeyt’s characterization of U.S. broadcast radio being unique and highlighted how Canada has a vibrant local broadcast radio market. He remarked that neither broadcast radio stations nor the National Association of Broadcasters are willing to offer a net additional amount to music artists to address the issue of a performance right for music artists on terrestrial radio. He then discussed how music streaming is increasing and serves as the only source of performance revenue for music artists. He noted how the CRB must account for the fact that terrestrial radio does not pay performance royalties when setting performance royalty rates for music streaming. He asked the witnesses to indicate whether music streaming is promoting terrestrial radio listenership.
  • Mr. Harrell asserted that broadcast radio stations are promoting music streaming listenership.
• Chairman Issa interjected to comment that broadcast radio stations can promote music streaming listenership. He asked the witnesses to indicate whether music streaming provides any benefits to broadcast radio stations.
  • Mr. LeGeyt remarked that broadcast radio stations must engage their audiences through every possible mechanism and indicated that these mechanisms may include broadcasting, internet streaming, and social media.
• Chairman Issa expressed frustration that the U.S. has not developed a performance right for music artists on terrestrial radio. He also expressed frustration that the National Association of Broadcasters has failed to offer any payment increases to music artists. He noted how broadcast radio stations will pay high annual fees to the National Association of Broadcasters and criticized these broadcast radio stations for failing to consider paying a flat rate to provide performance royalties to music artists. He also predicted that broadcast radio stations would face significant financial problems if recording artists were to ever advocate that their fans only consume their music via streaming platforms. He expressed his interest in negotiating with the National Association of Broadcasters on developing a performance right for music artists on terrestrial radio. He warned that there will be consequences if the National Association of Broadcasters remains unwilling to negotiate a solution to this issue that does not include a net increase in payments to music artists.

Rep. Kevin Kiley (R-CA):

• Rep. Kiley remarked that he remains “torn” on the issue of the establishment of a performance right for music artists on terrestrial radio. He stated that he remains sympathetic to the concerns of performance rights holders and commented that current federal copyright law appears somewhat arbitrary in its treatment of these rights. He expressed concerns however that redefining the scope of performance rights could create disruption given how industries have built their business models on the status quo. He asked Mr. Harrell to project how the American Music Fairness Act of 2023 would impact the financial viability of local broadcast radio stations. He also provided the other witnesses with an opportunity to address other considerations related to the legislation.
  • Mr. Harrell remarked that the imposition of a new performance royalty on broadcast radio stations would force broadcast radio stations to reduce their local staffs. He warned that these staff reductions would diminish the community service activities and the emergency service capabilities of local broadcast radio stations. He mentioned how he had served as the CEO of the Columbus Urban League prior to joining Radio One and noted how broadcast radio stations had partnered with that organization on their community service efforts. He cautioned that the imposition of new fees (such as new performance royalties for music artists) on broadcast radio stations would diminish the capacity of these stations to provide community services.
  • Mr. LeGeyt remarked that the U.S. copyright regime governing terrestrial radio is not arbitrary. He mentioned how Congress had decided in the 1990s to establish a unique performance right for music artists on music streaming and satellite services. He also noted how broadcast radio stations have long paid a performance royalty to songwriters for the airplay of their music on terrestrial radio. He remarked however that Congress had granted broadcast radio stations with an explicit exemption from paying performance royalties to music artists for terrestrial radio airplay because terrestrial radio is freely available and community-based. He stated that these features of broadcast radio stations have not changed in the ensuing years.
  • Mr. Huppe remarked that the U.S.’s performance royalty system for music artists has long been unfair and that the system’s long existence does not justify its continuation. He noted how the recording industry has long advocated for the establishment of a performance right for music artists on terrestrial radio. He commented that while broadcast radio stations may engage in laudable community service activities, he stated that the U.S. broadcast radio industry is valued at $15 billion and does not pay the music artists responsible for their content. He remarked that the U.S. music industry has changed significantly since the 1990s and highlighted how streaming now accounts for 85 percent of recorded music revenue. He also noted how numerous music streaming platforms have emerged since the 1990s and how these streaming platforms must pay performance royalties to music artists for the airplay of their music. He further stated that the emergence of AI technology poses additional challenges to recorded music and emphasized that this technology had not existed during the 1990s. He remarked that Congress must provide a performance right for music artists on terrestrial radio as part of any effort to address the use of AI technology within the music space.
  • Mrs. Travis stated that Congress should establish a performance right for music artists on terrestrial radio. She also questioned the fairness of providing songwriters with a performance right for terrestrial radio airplay and not providing music artists with a similar performance right for terrestrial radio airplay. She commented that the music artist is necessary for enabling a song to be aired on terrestrial radio.