Congressman Jerry Nadler Talks Terrestrial Radio Battle, and the Importance of Unity in the Music Industry

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Congressman Jerrold Nadler may be in headlines in recent weeks as part of the impeachment proceedings against President Trump, but hes also been a longtime advocate for creators rights in the music industry and played an enormous role in last years passage of the Music Modernization Act which National Music Publishers Association president/CEO David Israelite called the most important music legislation to happen in our lifetimes. Nadler spoke with Israelite Thursday morning as part of a new lecture series at the music department of New York Universitys Steinhardt School, which is named after legendary music publisher and producer Ralph Peer (who is prominently featured in Ken Burns recent docuseries on country music for being the first to record the Carter Family, Jimmie Rodgers and many others).

While the impeachment proceedings were only mentioned peripherally, Nadler delved deep into issues with Israelite, most prominently the longstanding fact that unlike virtually every other country, terrestrial radio stations in the U.S. pay no performance royalties to labels or artists. That provision was originally expected to be a part of the MMA, but the parties were unable to achieve consensus and decided to fight that battle on another day.

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When asked by Israelite whether anything has changed in the past year that has strengthened the industrys position against National Association of Broadcasters, which has lobbied hard to maintain the status quo regarding performance royalties, Nadler sighed and said, I dont know. I certainly hope we can win this fight and its going to change, as terrestrial radio becomes relatively less important and streaming becomes more important, the question becomes the extent to which broadcasters will see their interest as less opposed to performance rights.

Theyve been negotiating, he continued, although they havent come to an agreement, were still pushing those negotiations. But at some point I think we will get some version of [performing rights], because the NAB and their people will see that their interest is less adversely effected than it was previously, and thats an ongoing process. (Variety has reached out to the NAB for comment.)

Israelite then noted that the NAB pursues differing policies regarding its television and radio interests. On the TV side, they say that when they create and own content, they want to be able to negotiate the value of that content and that someone must get their permission to use it,” Israelite said. “But on the radio side, they believe in not paying anything, or want it to be regulated with prices set by the federal government with a compulsory license. How do they straddle that situation?

Nadler joked, Its unprecedented in human history that people take inconsistent positions, to laughter before continuing more seriously, if inconclusively. They dont really address it. If people point out the inconsistency, [they basically say], Alright so what? Its a question of political strength and financial strength, and yes, intellectually, its an inconsistent principle and in a philosophy class it would be difficult to defend, but thats really not the question.

He was asked later what kind of incentive might be offered to the NAB to encourage it to make a deal. Nadler offered two options. Theres the question of the regulation of streaming, which, without getting into too much detail, they have a lot of interest there, he said, and straight political pressure.

One thing has been taken off the table, he continued. [Republicans] had propaganda in opposition to a performance right which was, Dont impose a music tax, and they actually got a majority of members of the house to sign onto a resolution that said that. So we had to do something highly unusual: We went to the arbiter, Grover Norquist, a right-wing antitax guy, whod gotten every Republican candidate for Congress to sign his pledge, which said I will not vote for any tax increase, no matter what.

We got him to say this is not a tax we told him the revenue does not go to the government, it goes to artists, and he agreed and wrote us a letter to that effect. So that took some of the pressure off of the Republican side, so generally, its just political pressure and [showing them] the relative shares of streaming and terrestrial radio, and how much do they get on the streaming.

Israelite also remarked upon the fact that the House Judiciary Committee, which Nadler heads, is famously partisan, but worked together harmoniously on copyright and music legislation, particularly the MMA.

It is true that the Judiciary tends to be a place for the most liberal Democrats and the most conservative Republicans, he agreed, and the reason for that is very simple: If youre a new member, who just got elected from a competitive district, the party leadership asks what committees youd like to be on. If you say Judiciary, the response would be, You dont really want that, its all these hot-button votes on abortion and gay rights and things like that, why dont you go somewhere safe where you can deliver for your district, like transportation. So as a result you tend to get the people from the most [solidly] Democratic and Republican districts.

But we also have a very wide jurisdiction on the committee almost half the bills that have been considered on the floor of the House this year have come out of it including intellectual property issues: copyright, music or various other issues. Those can be very divisive too, but they dont tend to fall on party lines although sometimes they fall on geographical lines, like Northern California versus Souther California, but then you can have a debate and consideration that isnt under party lines. So you get bills like the MMA, which sponsored by a Democrat, Hakim Jeffries, and a Republican, Doug Collins, and me and Rep. Bob Goodlatte as chairman and ranking member, and there we had to get various parts of the music industry to agree.

On that point, Israelite noted that the MMA was approved by a rare unanimous vote, and asked what lessons that success can carry over to other Congressional battles.

There was one seminal factor, Nadler said. Three or four years ago I spoke to the Entertainment Law Initiative during Grammy Week, and I said If you want some real legislation, the different segments of industry have to get their acts together and try to speak with one voice, instead of urging Congress to go in six different directions.

And to the industrys credit, he continued, they did that. It took a few years, but we were able to pass unanimously legislation based on what became consensus view. Its always easier for a legislative body to pass something that everyone agrees on. The one issue that I regretted we couldnt achieve consensus on, and werent able to put in there, was [terrestrial radio] performance rights, and I hope well be able to do that in the future.

Now, most people in Congress had no idea what was in the bill, he noted, to laughter from the crowd. But they knew that the committee was unanimous in support in the bill and that the people affected the industry supported it, and thats all they had to know. Even people who didnt really understand the ins and outs of it knew that people from their districts wanted the bill, and there was a consensus of involved people, and that also made them pay attention.

Perhaps most surprisingly, when asked how he listens to music, Nadler said he had a lot of records, but basically, I listen on YouTube.

While that seemed surprising given the music industrys multiple issues with YouTubes royalty rates, its likely that, like any good politician, Nadlers music-biz associates are picking their battles.

 

 

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