Nadler Reiterates Strong Support for Artists' Performance Right in Radio

Today, Congressman Jerrold Nadler (D-NY), a Senior Member of the House Judiciary Committee and Member of the Subcommittee on Intellectual Property, Competition, and the Internet, reiterated his strong support for a performance right, just compensation, and intellectual property protections for artists, musicians, and other creators of content. He delivered a keynote address to the "Grammy's on the Hill Legislative Conference" before an audience of musical artists, technicians, and industry representatives in Washington.

"I have news for former Senator Gordon Smith and the National Association of Broadcasters: this issue of performance rights is not over," said Nadler. "This issue isn't over, and it won't be over until we have a performance right enshrined in law. If the parties can't solve the problem, Congress will."

The following is the full text of Nadler's keynote address, as prepared:

"Good morning. Thank you very much for inviting me to speak with you this morning as you prepare to conduct outreach to Members of Congress and communicate the most pressing needs of artists and professionals in the recording industry.

"As you know, the issues you're facing -- those of performance rights, intellectual property, and copyright -- are among the most current and as-yet-unresolved issues on the national stage. Many legislators who weren't aware of these issues two years ago surely understand today that these are fundamental issues affecting thousands of artists and other professionals and, as such, deserve our attention and earnest efforts.

"For hundreds of years, long before the current terminology existed, people have recognized the importance of protecting intellectual property. The concept of intellectual property is simply about recognizing the creative forces behind works of art -- works of art that have defined our culture, and have always been integral to our society. Protection of the rights of authors and creators of the works is, therefore, the logical means of instilling fairness into the business of producing culture.

"The framers of our Constitution, in fact, thought intellectual property was so important that they listed its safeguarding as one of Congress's enumerated powers. Article I, Section 8, Clause 8 empowers Congress "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.' Such promotion has been achieved through copyright law, patent law, and other critical policies over the years.

"But, of course, these laws cannot be static and must change and improve to meet the needs of the particular times. We're only now confronting the newest ways in which the Internet, the market, and private industries are changing the playing field, necessitating new means of understanding and protecting intellectual property.

"What's clear is that intellectual property, and the creative forces behind it, are an increasingly important part of our economy. Economic activity based on knowledge, innovation, and technology has grown in importance as certain other sectors, like manufacturing, have declined. And, our nation must have robust protections to incentivize and reward that creation, as well as clear and effective means of preventing and penalizing the theft of those creative works -- online or otherwise.

"I understand and agree, like most of my colleagues, that theft of intellectual property online is a major problem. There's been considerable disagreement about the best way to address it, but I do believe that common ground that both protects intellectual property rights and the freedom of the Internet can and must be found.

"Performance rights is another issue still searching for a solution. As you know all too well, current copyright law has a particular and unique problem: it is burdened by a fundamental unfairness and inequity.

"Owners of underlying "musical works,' who, in most cases, include the songwriter or music publisher, are entitled to receive royalties from statutory licenses for the public performance of their works in terrestrial radio broadcasts. However, the copyright owners of "sound recordings' and the artists featured in those recordings don't have a comparable right to royalties for the public performance of their works in terrestrial radio broadcasts.

"Inexplicably, terrestrial radio is treated differently than basically every other medium. Internet broadcasters, cable radio, and satellite radio all pay for both the musical work and sound recording rights. Only broadcast radio is exempt from paying for sound recording rights.

"This is patently absurd.

"To illustrate just how unfair and arbitrary the current policy is, here's a stark example. When the late Whitney Houston's version of the song "I Will Always Love You,' is played on the radio -- as it was many times after her recent death -- she, or her estate, receives no compensation. By contrast, the writer of the song, Dolly Parton, is paid. Whitney's version of that song is iconic -- no one can deny that her rendition was a valuable addition to the art of our nation. That we allow radio stations to use her creation without compensation is unconscionable.

"And, of course, it's not just big stars who are victims here. Backup singers and everyone else, large and small, are denied fair compensation. Their situation has largely been overlooked by the general public and decision makers in the industry.

"The bottom line is that terrestrial radio -- AM/FM radio -- is allowed to use the creation, the intellectual property, of another, for free. I'm aware of no other instance where this is allowed, and this needs to be remedied.

"Not surprisingly, the United States is the only developed country that doesn't provide full compensation for sound recordings on the radio. Other countries like us that deny this right include Iran and North Korea -- not a group we should be proud members of.

"Moreover, even though other countries provide for this sound recording right, the failure of the U.S. to do the same means that our singers and musicians cannot take advantage of it abroad. This costs our economy millions of dollars a year, unnecessarily.

"The National Association of Broadcasters (or "NAB') has vigorously objected to allowing for a performance right in sound recordings, arguing that performers are already compensated -- by gaining exposure and therefore more record sales -- when their works are played on the radio. While some performers may get such a benefit, that is not justification to use their creations without paying for it. And, I doubt that this accurately describes the situation of well-known artists, like Whitney Houston who I mentioned a moment ago.

"Broadcasters also argue that requiring payment for a public performance will destroy small radio stations. While no one wants to put any stations out of business, a business model shouldn't be based on using others' property for free. We don't let people or companies off the hook from paying for property just because it might hurt.

"I know many of you have been fighting for fairness in performance rights for years. I have too. We moved the ball forward in important ways in the 111th Congress, under Chairman John Conyers, a long-time supporter of performers' rights.

"In the last Congress, the Performance Rights Act advanced through the Judiciary Committee with bipartisan support despite a large and aggressive opposition campaign from radio broadcasters. It'd have created a performance right, so that copyright owners and performers could be properly compensated. And, it was fair to radio, including accommodations for small and non-commercial radio stations.

"In late 2009, congressional leaders in both houses and from both sides of the aisle called upon advocates -- pro and con -- to work together to reach an agreement that would finally provide compensation for the use of music by radio broadcasters. As I understand it, negotiating committees representing each side reached an agreement in July 2010. That deal would have, for the first time, provided for a performance royalty. In exchange, the music community agreed to provide radio broadcasters with several concessions, including a discount on Internet streaming rates. This was a breakthrough resolution that would have created net positive revenue for the music community -- amounting to hundreds of millions of dollars over the next few years.

"Unfortunately, the NAB Board later unilaterally changed the terms of the negotiated deal and presented advocates with a new proposal in October 2010. The October proposal undid the balance of the July deal, and the NAB knew or should have known in advance that it could never be accepted. NAB's October proposal was structured so as to be economically worse for the music community than the status quo. Moreover, its proposal included a mandate that every cell phone contain an FM radio chip -- an impossible element for the coalition in support of the performance right to promise.

"I continue to hope that the broadcasters will return to the negotiating table and help to fairly resolve this issue. Unfortunately, the NAB seems to think the issue is over. In remarks prepared for delivery earlier this month, NAB President Gordon Smith talked about NAB's success in "thwart[ing]' the Performance Rights Act last Congress and that this was a "victory' for the NAB. I have news for former Senator Smith and the NAB: this issue of performance rights is not over.

"This issue isn't over, and it won't be over until we have a performance right enshrined in law. If the parties can't solve the problem, Congress will. I'll do my best, with my colleagues in Congress, to make sure that happens. And, of course, we need your continued help.

"I know that, following my remarks, you're going to meet with Members and their staffs to explain the importance of creating a performance right in broadcast radio and of promoting copyright protections more generally. I applaud your activism and I want to thank you in advance for your efforts.

"Like you, I believe that protecting copyrights and making sure creators are paid for their work is critical. It's not only the fair and moral thing to do, but it's vital for our economic well-being. As I said earlier, our economy increasingly depends on intellectual property -- and our society depends on musical and artistic works. We must reward their creation to maintain the right incentives.

"This is a message you need to carry with force and clarity to Members and their staffs today. They need to hear that Americans from across the country, including their own constituents, share these values.

"And, as I said earlier, protecting intellectual property isn't just about big-name super-stars. It's about everyone involved in the creative process -- engineers, technicians, grips, and so on. These are middle-class Americans trying to survive, and it's much harder to do so when the value of their work is diminished or stolen. This reality of the broad impact and benefit of protecting intellectual property rights is something to emphasize in your meetings today.

"Good luck, and I look forward to our continued work together on these very important issues."

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