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Radio News: Congress debates performance royalties for radio

Mar 22, 2015 11:13 pm
The “Local Radio Freedom Act” is winding its way through Congress now, and the name sounds like something almost anyone could get behind. Of course, generic friendly named bills are standard practice in Washington D.C. now. Similar versions of this bill have failed before with names such as the "Performance Rights Act" (2009), and the "Free Market Royalty Act" (2013). So forget the name, this is a non-binding resolution backed by the National Association of Broadcasters (NAB), and introduced by U.S. Representatives Gene Green (D-TX) and K. Michael Conaway (R-TX). The resolution proposes: “…Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for such public performance of sound recordings.” Songwriters get paid each time a song airs on terrestrial radio, but performers do not, though they get paid from airplay on digital or satellite radio, a distinction these days, that's not all that clear. Radio airplay is considered promotion for the record, advertising that drives sales, which leads to the performer getting paid. The radio industry has long argued that heavy airplay leads to record sales. Does that sound reasonable? It does in China, Iran, and North Korea, some of the only other countries that also do not pay performance royalties for airplay, according to Olivia Brown at the Future of Music Coalition. "For decades, local radio airplay has jump-started and sustained the careers of countless musicians and record label moguls," said NAB president and CEO Gordon Smith, in a statement in Billboard magazine last month. "Local radio's unparalleled promotional value drives increased record and merchandise sales and sells out concert venues. NAB applauds lawmakers for standing with hometown broadcasters in opposing a job-killing performance royalty that would damage the number one platform for exposing new music." And while the "Local Radio Freedom Act" sounds like something concerning mom-and-pop locally-owned broadcasters, the NAB mostly represents just five corporations. Billboard says that of 11,357 AM and commercial FM stations in the U.S., 850 are owned by iHeartMedia, 450 belong to Cumulus Media, 300 are run by Townsquare Media, 130 belong to CBS Media, and 130 are owned by Entercom. AllAccess.com reports that last week, 13 more House members signed on as co-sponsors of the bill, with two more Senate co-sponsors. Radio World reports that four lawmakers — Darrell Issa (R-CA), Marsha Blackburn (R-TN), John Conyers (D-MI), and Jerrold Nadler (D-NY) — publicly oppose the LRFA, noting in a letter that the resolution, “impedes future debate, it stifles innovation, and it will continue to maintain an unfair playing field.”
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