A significant legislative proposal, the American Music Fairness Act, is set to be considered by Congress, potentially altering the financial landscape for radio stations and musicians across the United States. The bill aims to introduce a new royalty system, requiring radio broadcasters to pay performers for playing their songs, a practice not currently mandated in the country.
This proposed change has ignited a national debate, creating a clear divide between music artists who see it as a long-overdue source of income and radio stations, particularly smaller, local operators, who warn of severe financial consequences.
Key Takeaways
- The American Music Fairness Act proposes new royalties for recording artists when their music is played on terrestrial radio.
- Currently, U.S. radio stations pay songwriters and composers but not the performers of the songs.
- Independent artists support the bill, citing it as a crucial source of direct income.
- Radio broadcasters, especially in small markets, argue the new fees could force them to cut music programming or change formats entirely.
A Fundamental Shift in Music Licensing
For decades, the relationship between radio stations and recording artists in the U.S. has operated under a unique arrangement. While stations pay licensing fees to organizations that represent songwriters and composers, they have never been required to pay the artists who actually perform the recordings. The logic was that radio airplay served as free promotion, driving album sales and concert ticket purchases.
The American Music Fairness Act seeks to end this long-standing exception. If passed, it would align the United States with many other countries where performers receive royalties for radio airplay. Supporters of the bill argue that in the modern music economy, this promotional value has diminished, and artists deserve direct compensation for the use of their work.
The View from the Broadcast Booth
For local radio stations, the proposed legislation represents a significant financial threat. Fritz Moser, Operations Manager for Midwest Communications, which operates local stations including WMBD Radio, expressed concern over the potential impact on smaller markets.
He explained that the new costs could fundamentally change how stations program their content. “It’s just going to be harder for us to justify some of the costs to get some of these newer acts on the air,” Moser stated. He suggested that the financial pressure could lead to drastic measures.
“I think you’re going to see some radio stations either create their own record labels. I mean, that’s a possibility. Or they’ll change formats to where they’re out of the music business altogether.”
Radio's Current Royalty Structure
Under current U.S. law, when a song is played on AM/FM radio, royalties are paid to the songwriter and publisher through performance rights organizations like ASCAP and BMI. However, the owner of the sound recording—typically the record label and the performing artist—receives no compensation for this type of broadcast.
Artists Argue Every Penny Counts
From the perspective of independent musicians, the act is a matter of economic survival. In an industry where streaming services often pay fractions of a cent per play, any new revenue stream is seen as vital. Warith Muhammad, co-founder of the local label God’s Music Productions, champions the bill as a critical step toward fair compensation.
“When you’re an independent artist, every penny counts,” Muhammad said. “You don’t even say dollar because most of the time your streams aren’t making dollars. They’re only making pennies.”
He emphasized the direct benefit the legislation would provide. “So this bill saying, ‘hey, this money is going to go directly to the artist’ is huge,” he added. For many creators, this isn't about getting rich; it's about sustaining a career in music.
Global Standard vs. U.S. Exception
The United States is one of the few developed countries in the world, alongside nations like Iran and North Korea, that does not require terrestrial radio broadcasters to pay performance royalties for sound recordings. Most of Europe, Canada, and Australia have systems in place for such payments.
The Legislative Battle Ahead
The American Music Fairness Act is not a new concept, but it has gained renewed momentum. It has garnered support from major artist advocacy groups and prominent musicians, who are lobbying Congress for its passage.
However, it faces powerful opposition from the National Association of Broadcasters (NAB) and other industry groups representing thousands of local radio stations. They argue that a new performance tax would cripple an industry that provides free, localized content and serves as a launching pad for new talent.
As the bill prepares for another debate when Congress reconvenes, both sides are making their cases heard. The outcome will determine the future of a decades-old business model and could reshape the financial realities for both the artists who create music and the radio stations that bring it to the public.