Digital music services like Pandora would pay more under proposed “Oldies” law

Pandora and Sirius XM already pay far more in copyright royalties than AM/FM stations, but that’s not stopping the music industry from demanding that Congress force the digital radio services to pay even more.

SoundExchange, a royalty collection service, announced a heart-tugging campaign called “Project 72.” The campaign is to back the “RESPECT Act,” a law proposed by Reps George Holding (R-NC) and John Conyers (D-MI) that would require digital radio services to pay performance royalties for pre-1972 recordings.

As it stands, Sirius and Pandora don’t pay to perform these early recordings since they are not covered by federal copyright law. The industry claims the issue is one of fairness, arguing that the earlier recordings deserve the same protection as the later ones. Sounds fair, right? After all, what sort of philistine wouldn’t pay those dear old musicians for their oldies?

Alas, it’s not that simple. As I’ve explained before, the vagaries of copyright law mean that Pandora doesn’t pay for pre-1972 recordings -- but neither does any other radio service. What’s more, the digital services are paying large sums to play post-’72 performance rights, while AM/FM stations (which are much richer) pay nothing at all. And, in any case, everyone must pay the songwriters and publishers for the pre-1972 works.

All the RESPECT Act would do is exacerbate these irrational distinctions between traditional and digital radio services (and possibly put Pandora and Sirius XM out of business altogether), while failing to solve the music industry’s deeper problem, which is the permanent decline of CD sales.

Public Knowledge’s Jodie Griffin said, “Public Knowledge supports protecting pre-1972 sound recordings under federal copyright law, but this bill fails to give pre-1972 recordings actual copyright protection and fails to solve the uncertainty created by a patchwork of state laws. Pre-1972 sound recordings should be addressed in a comprehensive approach that considers the many current issues in music licensing. Pre-1972 sound recordings should be given actual copyright protection that lasts for the lifetime of the author. That protections should be balanced by limitations like robust statutory licensing, mechanisms to help users locate authors, and reasonable damages. Additionally, users that are currently relying on limitations in state laws today should be given notice and time to adjust to the new regime. Finally, the windfall that results from new licensing requirements should go the actual artist, so the statutory splits that often currently give half of the collected royalty payments to record labels should be adjusted to increase artists' share of the royalties.”