MBW Views is a series of op-eds from eminent music industry people… with something to say. The following MBW op/ed comes from Michael Huppe, President and CEO of the Washington, D.C.-headquartered SoundExchange.
Some EU member states are currently lobbying the European Commission to reverse a 2020 European Court of Justice ruling that entitles American recording artists to remuneration when their music is played on European radio. This move, says Huppe, would cut off nearly $300 million a year in royalties paid to US artists.
At the heart of the dispute is a transatlantic asymmetry: across the EU, performers and record labels are paid when their recordings are played on terrestrial radio, via local collecting societies. In the US, no equivalent right exists for AM/FM radio – performers and labels receive no royalties from terrestrial broadcast in the country. (Songwriters and publishers do, via ASCAP, BMI, GMR, and SESAC.)
Here, Huppe puts forward the case of US rightsholders who, he says, are “legally entitled” to that money – and warns that if Europe succeeds in excluding them, the White House and Congress should treat the move as “outright trade discrimination against American artists…”…
If European countries refused to pay for American movies, machinery, or the U.S. software and cloud services they rely on, the White House and Congress would immediately spring into action to make sure American companies and workers were treated fairly.
Yet, that is exactly what is happening with music. The European Union is angling to potentially deny all American artists compensation when their songs are played on European radio stations. We can’t let this happen.
This is not only an egregious act, but contrary to rulings by Europe’s highest court. Six years ago, the European Court of Justice ruled that American recording artists are entitled to be paid when their music is played on European radio.
The court was emphatic: under EU law, you cannot exclude artists from royalties based on nationality. If you pay your own artists for a particular use, then you must similarly pay artists from other countries. The court considered this economic right to be a fundamental human right.
The Netherlands, Denmark, and Sweden changed their laws to comply with that ruling, bringing to 21 (out of 27) the number EU countries complying with the court decision – almost 80%.
“The European Court of Justice confirmed American artists are legally entitled to that money.”
Those that adjusted their laws did not experience significant reductions in payments to their own nationals but rather demonstrated that expanding eligible repertoire “grows the pie for all.” There remain only six states failing to comply with the law.
Now, some European countries are lobbying the European Commission to amend EU law and overturn the court’s ruling so that American artists can be excluded all over again. If they succeed, nearly $300 million dollars will stop flowing to American Artists every year.
What makes this especially galling is how much European radio stations rely on U.S. music. Songs by American artists make up more than one-third of music played on all European radio stations.
The European Court of Justice confirmed American artists are legally entitled to that money.
The defenders of this move will argue that the United States doesn’t extend the same right to European artists, so Europe shouldn’t extend it to Americans. It’s an argument the European Court of Justice already considered and rejected.
And it’s an argument that ignores the money flow. The United States treats foreign artists equally on all of our paying radio platforms, including platforms that don’t even exist in Europe (such as satellite radio).
Here’s the most important point: SoundExchange collects and pays out more (almost double) for satellite and internet radio than all of Europe collects from terrestrial radio.
Europe’s violation of basic trade principles deserves a response by the White House and Congress. Trade negotiators should make clear to the European Commission that any legislative effort to overturn the court’s ruling and exclude American artists will be treated as a discriminatory trade measure.
The U.S. has used trade pressure to protect American movies and software from this kind of European carve-out, and we are simply requesting the same consideration for music.
The European Court has already said American artists are entitled to this money. The European Union has signaled it may consider denying payments that our artists need to live and support their families.
The facts are clear. The only question now is whether the U.S. government will let Europe legislate outright trade discrimination against American artists.Music Business Worldwide
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