Post co-authored by FMC policy intern Bryce Cashman

A new bill has been introduced in the US House of Representatives that we hope will have a positive impact on the music community. On March 19, 2015, Reps. Joe Crowley (D-NY) and Tom Rooney (R-FL) introduced the Allocation for Music Producers Act (AMP, H.R. 1457)—legislation that would make it easier for producers to receive a percentage of digital performance royalties.

Future of Music Coalition has long supported the statutory license that guarantees that recording artists are paid directly and fairly when their music is played on Internet and satellite radio. Now audioworkers stand to benefit from this arrangement.

This is not an expansion of authorship, and would not affect the other exclusive rights enjoyed by creators and copyright owners. Instead, the AMP Act clarifies the role of the nonprofit SoundExchange, which collects revenue generated from digital plays and distributes that money to performers and sound recording owners. Studio professionals already have the ability to receive performance royalties, provided that the artist employ a Letter of Direction (LOD) to authorize payment to an audioworker out of their own 45 percent cut. The AMP Act builds off of that process and empowers SoundExchange to handle administration.

Studio professionals have historically been compensated in two ways: a flat-rate up-front payment for recording time and/or “points” on record sales. Fees vary based on a number of factors, including expertise and the number of tracks recorded. How much studio professionals receive and the process by which they are compensated is typically hammered out at the start of recording.

Currently, the law does not provide for statutory shares of performance royalties to producers. Back in 1995, when the Digital Performance Right in Sound Recordings Act (DPRA) was enacted, Congress directed featured performers (or a band) to receive 45 percent, with 5 percent going to background musicians and singers. The other 50 percent is paid to sound recording owners (typically a label, but sometimes the artist.) This right only extends to digital radio—think webcasters like Pandora or satellite radio like SiriusXM.

If artists wanted to offer studio professionals a cut of this royalty, they would either have to do the accounting manually or allocate a share of royalties through an LOD. The AMP Act makes it easier for SoundExchange to pay studio professionals, so long as the artist authorizes this distribution. 

Basically, the AMP Act amends the DPRA, by codifying the letter of direction process into law. Thereby, the legislation establishes a permanent process through which audioworkers can collect royalty shares in songs they helped create.

Additionally, the AMP Act would give studio professionals a two percent piece of the pie from sound recordings made before 1995—when the digital performance right was first enacted—provided that certain requirements are met. In the event that the studio professional has reasonably attempted to obtain a letter of direction from the recording artist for a pre-1995 song and following a four-month period of non-response to SoundExchange outreach, the AMP Act directs SoundExchange to deduct two percent from the artist’s 45 percent and allocate it to the producer seeking payment.

Supporters of the bill include SoundExchange and the National Academy of Recording Arts and Sciences, whose members number many studio professionals. Add Future of Music Coalition to that list: we’re producers and engineers, too, and consider audioworkers to be a crucial part of our community. We’ll be tracking.