The American Music Fairness Act of 2025 mandates that terrestrial radio stations pay performance royalties for playing sound recordings while establishing a fair licensing framework that includes special protections for small broadcasters.
Darrell Issa
Representative
CA-48
The American Music Fairness Act of 2025 updates copyright law to require terrestrial AM/FM radio stations to pay royalties for the music they broadcast, ensuring performers and record labels are compensated similarly to digital platforms. The bill establishes a new royalty framework while providing special, reduced rates for small and noncommercial broadcasters to protect their operations. Additionally, it includes safeguards to ensure these changes do not negatively impact songwriter royalties and mandates that the promotional value of radio airplay be considered during rate-setting proceedings.
AM/FM Radio to Pay Artists for Music: American Music Fairness Act Sets New Royalty Rules and Small Station Protections
For decades, traditional AM/FM radio has operated under a unique loophole: while digital services like Spotify or SiriusXM pay artists and record labels every time a song plays, your local terrestrial station hasn't had to pay a dime for the sound recording itself. The American Music Fairness Act of 2025 aims to close this gap by requiring AM/FM stations to obtain licenses and pay royalties, effectively treating analog broadcasts the same as digital ones under the Copyright Act. This means when you hear a hit song on your car radio, the performer and the label would finally get a cut of the action, just like they do on streaming platforms.
The Tab for Traditional Radio
The bill expands the 'performance right' for sound recordings to include all audio transmissions, removing the long-standing exemption for over-the-air broadcasts (Section 2). For a mid-sized station in a suburban market, this is a significant shift in the business model. To keep things from getting too chaotic, the bill integrates radio into the existing statutory license system, meaning stations don't have to negotiate with every single artist individually; instead, they pay a government-set rate. These new rates will be hammered out by Copyright Royalty Judges starting shortly after the bill passes, with the first set of payments covering the period through 2028 (Section 3).
Life Rafts for Local Stations
Recognizing that a massive royalty bill could sink a small-town station or a college radio booth, the legislation carves out a 'small broadcaster' protection (Section 4). If a station brings in less than $100,000 a year, their total royalty bill is capped at a flat $10 per year. For stations making between $100,000 and $1.5 million, the fee is either $100 (for public/non-commercial stations) or $500 (for commercial ones). This ensures that the local DJ playing indie tracks in a rural county isn't priced out of existence, provided their parent company doesn't pull in more than $10 million across all its holdings.
Balancing the Books
One of the more nuanced parts of the bill requires judges to consider the 'promotional value' of radio when setting these rates (Section 7). This is a nod to the old-school reality that getting a song played on the radio can actually boost an artist's ticket sales or streaming numbers. However, because 'promotional value' is a bit of a subjective term, this could lead to some intense legal tug-of-war during rate-setting hearings. Additionally, the bill includes a 'no-harm' clause for songwriters (Section 6), ensuring that this new payment to performers doesn't come out of the pocket of the people who actually wrote the lyrics and melodies.