Several countries, including the US, permit consumers to make copies of copyright protected sound recordings. The reproduction is permitted so long as the copy is made for the consumer’s personal, noncommercial use and is made from a legally obtained sound recording (i.e., the consumer making the copy has purchased the sound recording he/she is copying.) These laws also include requirements that the manufacturers of the media, and/or the recording equipment, pay royalties that are then used to compensate featured recording artists and sound recording copyright owners for the lost sales resulting from this reproduction of their sound recordings.
In October 1992, the United States Congress passed the Audio Home Recording Act of 1992 (AHRA), which requires manufacturers or importers of devices and media such as blank CDs, personal audio devices, automobile systems, media centers, and satellite radio devices that have music recording capabilities, to make royalty payments. In 1993, AARC was created by the recording industry to administer these royalties in the most efficient and cost effective manner. Shortly thereafter, in 1995, AARC became the first organization in history to distribute AHRA monies and has continued distributing these royalties on an annual basis.
Under AHRA, royalty payments are deposited with the Copyright Office, a federal government agency, and placed into two separate funds for the two types of copyrighted works affected by audio home recording. The Sound Recordings Fund holds the portion of the royalties allocated to the sound recording for distribution to featured recording artists and sound recording copyright owners, and the Musical Works Fund holds the portion of the royalties allocated to the underlying musical work for distribution to the songwriters and publishers. AARC represents featured recording artists and sound recording copyright owners with regard to Sound Recordings Fund royalties. The US Copyright Office refers to AHRA royalties as “DART” (Digital Audio Recording Technology) funds.
Audio Home Recording Act allocation
Each year, the Copyright Royalty Board administers the distribution of royalties to the individual claimants within each subfund (in the Sound Recordings Fund, the subfunds are the Featured Artist Subfund and Sound Recording Copyright Owners Subfund). AHRA requires the allocation of Sound Recordings Fund royalties on the basis of the record sales of the claimants’ music during the year for which the royalties were collected.
If the claimants within a particular subfund are unable to reach a universal settlement regarding the distribution of the royalties, the Copyright Royalty Board must allocate the royalties. The Board will determine distribution based upon evidence submitted during an administrative trial. The Copyright Royalty Board will not pay out the royalties until either the parties have reached a universal settlement or the Board has determined allocation based on a trial. This process is complicated, time consuming and expensive, which is why signing up with AARC is the fastest and most cost-effective way to get your hometaping royalties.