In a punchy keynote address at the New Music Seminar in New York yesterday, SoundExchange CEO Michael Huppe provocatively claimed that music sales decrease when radio plays songs, according to a Billboard report. Huppe used that theme to support an argument that broadcast radio should be required to pay performance royalties to artists and labels, from which radio is currently exempt in U.S. music licensing regulations.
SoundExchange is the collection and distribution agency for royalty payments to rights-holders of music recordings.
That question — whether terrestrial radio should pay music royalties in the same way as online radio does — is heating up. The House Judiciary Committee is holding two music-licensing hearings this month to discuss that question, and related copyright issues. The U.S. is unique among Western nations in exempting broadcast radio from performance royalties for the recordings it uses. (Online streams of terrestrial stations do pay performance royalties, as pureplay Internet stations do.)
In addition to citing historical studies of radio’s purported effectiveness as a sales-promotion medium, Huppe described the star-breaking power of online music services in launching the careers of Lorde and Daft Punk. both those acts broke into mainstream awareness from online listening platforms and social media. “That is what’s upside down, when Lorde and Daft Punk demonstrated that people want to hear their songs, FM radio decided to broadcast their music to millions of people for free without paying artists and labels anything at all,” Huppe is quoted in Billboard.
In the debate over music licensing regulation which is happening across many venues at once, the National Association of Broadcasters (NAB) argues publicly against Huppe’s point, and has publicized a majority-backed, non-binding resolution in the U.S. House of Representatives, which supports radio’s exemption from performance royalties. The NAB has also characterized broadcast radio as a nationwide network of small businesses that provide local value to their communities. In short, the NAB promotes the status quo of an arrangement that benefits business, community, and public welfare.
The uneven playing field underlying the broadcast and Internet radio industries is increasingly under discussion this year, when the U.S. government is reviewing how music is licensed generally, whether from artists and labels, or songwriters and publishers. Huppe’s keynote remarks seemed designed to be sharply controversial, garnering attention to SoundExchange’s mission to increase payments to artists.