Congress is considering legislation that would expand copyright protection for sound recordings. In particular, the proposed Performance Rights Act would eliminate an exemption that currently allows analog, non-subscription AM and FM radio to broadcast a sound recording without acquiring permission from and paying a royalty to the copyright holder, performers, and musicians. This report reviewed: (1) the current economic challenges facing the recording and broadcast radio industries; (2) the benefits both industries receive from their current relationship; (3) the potential effects of the proposed act on the broadcast radio industry; and (4) the potential effects of the proposed act on the recording industry. Charts and tables.

Preliminary Observations on the Potential Effects of the Proposed Performance Rights Act on the Recording and Broadcast Radio Industries

"The recording and broadcast radio industries touch the lives of most Americans through the development and distribution of music. Congress is considering legislation, the proposed Performance Rights Act (H.R. 848), that would expand copyright protection for the public performance of sound recordings. The proposed act would require AM/FM radio stations that broadcast music to pay a royalty, and this royalty would be distributed to the copyright holder, performers, and musicians.This report addresses (1) the benefits received by the recording and broadcast radio industries from their current relationship, (2) the possible effects of the proposed act on the broadcast radio industry, and (3) the possible effects of the proposed act on the recording industry. To address these objectives, GAO analyzed data on music sales, broadcast radio airplay, and broadcast radio stations' revenues; calculated potential royalty payments; and interviewed stakeholders from both industries as well as experts and government officials.The Federal Communications Commission (FCC) and the U.S. Copyright Office of the Library of Congress reviewed a draft of this report. FCC noted that it has an interest in legislation that might..."