car runs on compressed air

Do you know that U.S. terrestrial broadcasters are exempt from paying a public performance right for sound recordings?  This leaves hundreds of thousands of U.S. songwriters and composers in the lurch.  The royalties are generated when a copyrighted song is performed publicly, whether on a traditional radio station, satellite radio, at a sports event or on an Internet music blog.

In the U.S. royalties are collected by ASCAP, BMI and SESAC and is then distributed to its members – songwriters and publishers.  To put all this in perspective as to the significance of the revenue stream, ASCAP reported in 2006 that it was distributing over $680 million to its members.

Although royalties are distributed to songwriters and publishers for public performances, no royalties are paid to performers for terrestrial radio play or the sound recording copyright owner which is usually the record label.

So when you hear a song on the radio, the songwriter and its publisher gets compensated through BMI but the performer, studio musicians, backing vocalists or the record label receive no pay for performance from terrestrial radio broadcasters.

Terrestrial radio broadcasters have long contended that the reason that the performers and record labels benefit from the free promotion they receive through radio play.  These broadcasters have argued that radio play increases album sales which in turns leads to adequate compensation for record labels and performers.

Our next article will examine how this issue is handled by other industrialized nations around the world so you can be educated.