Okay, sorry for the long post, but I feel I really have to comment on some of the things said by “Auditrix.”

For background: according to her profile, “Auditrix” is Cedar Boschan, a partner at Hurewitz, Boschan & Co. LLP, which is a royalty audit firm. In other words, while she knows what she’s talking about, she is also economically biased in favor of anything that creates royalty payments.

I, on the other hand, am an independent artist, who (like most) will probably never collect radio royalties of any kind. On the one hand, I’d like to see radio freed up for independent artists; but on the other hand, if every radio station went out of business tomorrow, I wouldn’t lose a penny. Neither am I a lawyer or an industry professional.

Now then.

Currently, radio stations pay royalty fees to ASCAP, BMI, and SESAC. (Harry Fox does collect radio fees as well, but I’d have to research the circumstances.) These organizations represent songwriters and music publishers – who, assuming you write your own music, are also the performers.

The bills in question are H.R.848 (which I think started as H.R.4789) and S.379. Both have nearly identical wording. They establish, by law, an additional system of fees to performers placed on terrestrial radio stations. It is not specified in either bill who would do the collecting, or what constitutes a “performer.” Since they obviously do not mean “songwriter,” likely they mean the “copyright holder.”

It isn’t a tax. The money does not go to the government. It is a license fee.

You’re right, it’s not. But it is a compulsory fee – one that you cannot opt out of, unlike a civil contract. (For an example of “opting out,” look at the history of ASCAP vs. BMI.)

It is, in other words, a law, not just a “fee.”

A radio station can opt to use creative commons license or public domain recordings and songs[…]

I’m not so sure about that. SoundExchange collects money “for” everyone, not just people on the RIAA’s roster. Not even the people at Creative Commons know what’s going on with that. The proposed laws’ intent is to create another SoundExchange, so who knows what would be covered.

The government got involved many years ago to exempt radio stations from paying sound recording royalties.

That’s a bit disingenuous. Until a decade ago, nobody paid those royalties for broadcast music. The government only “got involved” when the RIAA claimed digitial distribution was “piracy,” and created those royalties.

I guess they did get involved when they outlawed “payola” – the voluntary payment to get songs played on the radio for free. Funny how they’ve done a 180, and now want to legally require radio stations to give payola to the record labels.

Even if radio promotes recordings, radio derives profit from the recordings through ad sales, so it is only fair that the artists and labels are paid for radio’s use of the music.

Music that is put on the radio is an advertisement for an album. But by law, radio station cannot charge the record companies anything for that advertisement. So they must get money through other means – other types of advertisements (“commercials”), donations, public funding, etc.

In other words, it would be much more fair if record labels paid the radio stations. Unfortunately, the government got involved many years ago to exempt record labels from paying for advertising.

Not that radio stations had a right to complain. For almost 100 years, labels and radio stations both made a lot of money this way.

There are always problems, but, sound recording performance royalties are paid from the collection agent directly to the artist and record companies, so the artist share will not pass through the record companies…

If the proposed collection agency is modeled on SoundExchange, then you are wrong. SoundExchange represents nobody but “Sound Recording Copyright Owners” (SCRO’s), which are almost always record labels. It has, in its relatively short history, already gotten a terrible reputation for screwing over artists. Hardly surprising, given its beginnings as a subsidiary of the RIAA, its current status as a lobbying partner with musicFIRST, and its de facto status as a monopoly fee collector (even for artists who are not represented by the RIAA).
http://www.dailykos.com/storyonly/2007/4/24/141326/870
http://www.tinymixtapes.com/news/soundexchange-nonprofit-caught-lobbying-big-surprise-next-story
http://www.wired.com/listening_post/2007/08/music-lawyer-to/
http://www.royaltylogic.com/release/February-02-2009

50 percent – Sound recording copyright owner (while often a record label, some artists own the copyright for their master recordings)
45 percent – DIRECTLY to the featured artist (not to the record label or RIAA)
5 percent – non-featured artists [AFTRA] and [AFM]

I have no idea where those figures come from. From what I’ve been able to find, the figures for SoundExchange are much, much lower for artists, and that’s what the current legislation is based on. If you actually have any evidence that 45% of royalties get paid to artists, then I’d love to see it.

The handful big media companies who own nearly all of the USA’s commercial radio stations are going to great lengths to mislead the public to think that artists will not receive a significant share of the performance royalties. This is a lie.

No mention of the fact that the RIAA represents corporations who are much, MUCH larger than the ones that own commercial radio stations, and have far more connections in Washington. Nor any mention of the fact that those corporations have a long and sordid history of never paying artists, then lying about it.

And no mention of the fact that much of the criticism of this bill has come from NON-commercial radio stations (public radio, college radio, etc), the aforementioned songwriting organizations, groups like Creative Commons, and plain ol’ indie artists. Not one of these people has been paid a dime by the “big media companies.” In contrast, the corporations represented by the RIAA seem to be the only ones who believe this law is a good one.

And all this happens at a time when terrestrial radio is perhaps the only industry on the planet doing worse than major labels.

This law isn’t going to help indie artists, it won’t help most artists on major labels, and in the long run it won’t even help the labels themselves. The only thing it will do is force radio stations under. Any that remain will be those horrible Top 40 stations that you’re forced to listen to at work. That and talk radio, of course.