The Performance Rights Act: A Lack of Impact on a Transitioning Music Industry

INTRODUCTION I. THE MUSIC INDUSTRY--A BASIC BACKGROUND A. Recording Contracts B. Organizations II. THE COPYRIGHT ACT AND THE PERFORMANCE RIGHTS ACT A. The Copyright Act on the Music Industry B. The Performance Rights Act 1. The Great Debate III. CHANGES IN THE MUSIC INDUSTRY DUE TO TECHNOLOGY IV. WHY NOT FORCE ANALOG RADIO STATIONS TO PAY ROYALTIES? A. The Radio as a Medium B. The Difference between Analog and Digital V. CONGRESSIONAL SILENCE IS GOLDEN: FORCE THE RECORD COMPANIES TO ADAPT CONCLUSION INTRODUCTION The music industry is in a decline. Compact disc sales in the United states topped 785 million albums in 2000, (1) and dropped to only 535 million albums sold in 2008. (2) This sales decline is due largely to advances in digital technology, specifically the widespread integration of the Internet. "The Internet appears to be the most consequential technological shift for the business of selling music since the 1920s...." (3) However, major record labels have been slow to adapt to this technological shift, preferring to alienate the new digital consumer base (4) and push for legislation that will prolong the lifespan of their archaic business models. Music sales are not creating the same profits as before, and rather than change or adapt, record labels are petitioning the legislature to create new modes of revenue. one way the music industry is petitioning the legislature to add a new source of revenue, without changing its archaic business model, is by pushing congress to pass the Performance Rights Act. (5) This Act proposes that analog radio stations pay musicians and artists royalties to play their songs on the air, just like on digital radio. (6) While the Performance Rights Act looks great on the surface, it is just a quick fix to a much larger, underlying problem--the record industry in general. For years, artists have complained that the contracts the current business model forces them to sign are unfair and monopolistic. (7) There are many issues within a record contract to deal with, such as contract length, accounting practices, and copyright ownership. (8) Now with the expansion of technology and the Internet, artists are free to take the role of the recording company into their own hands. Nationwide promotion and exposure, once accessible only through record labels, is now accessible to anyone with Internet access. (9) As the paradigm of power shifts towards the artists, record labels are stubbornly still trying to make a profit through old business models. Some congressional advocates and recording artists, who are urging the passage of the Performance Rights Act, say that this Act is equitable and will benefit artists and artists' rights. (10) However, when one looks at the overall policies and practices of the record industry, any policy that prolongs the current structure of the music industry, and allows record companies to continue to profit without adapting to changes in technology, is detrimental to artist equality. Section II of this comment will discuss the background of music industry contracts and the issues artists face. Section III will discuss the proposed Performance Rights Act and what the Act is attempting to change in more detail. Section IV will discuss the changes that have occurred in the industry because of technological advances, and Section V will compare the differences between analog and digital radio. Finally, Section VI will explain how Congress, by staying silent on this issue, can provide artists with a more permanent solution to their right for equality in the music industry. I. THE MUSIC INDUSTRY--A BASIC BACKGROUND During the 1980s and 1990s, a consolidation in the record and music publishing industry took place. (11) This meant that there were fewer "major" labels and now the "[g]iant conglomerates" controlled the record industry. …