17 U.S.C. § 114 - Limit on Sound Recording Performance Rights

17 U.S.C. § 114: The Terrestrial Radio Exemption

Under Section 114, the scope of public performance rights in Sound Recordings is strictly limited compared to standard composition copyrights.

Terrestrial AM/FM Exemption Section 114(a) explicitly states that the public performance right in a sound recording does not include any right of public performance on analog, terrestrial, over-the-air AM/FM radio broadcasts. Because of this statutory carve-out: - Traditional US radio stations pay zero royalties to record labels and performing artists. - Only songwriters and publishers collect performance royalties from terrestrial radio (under Section 106(4)).

The Digital Audio Transmission Expansion Section 114(d) establishes that digital services (non-interactive webcasters, satellite radio, digital TV channels) must pay sound recording performance royalties under a statutory license. This is the legal basis for SoundExchange collections.

Global Reciprocity Penalty Because the U.S. fails to pay neighboring rights for analog broadcasts, foreign collection societies (like PPL in the UK or GVL in Germany) frequently refuse to pay neighboring rights royalties to US performing artists for analog broadcast play in their territories, citing a lack of international reciprocity.