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RAIN 02/05: House, Senate both re-intro royalties bills for radio

Posted on: 02/05/2009


Lawmakers in both houses of Congress have jointly re-introduced the Performance Rights Act bills, which would require AM and FM radio to pay the copyright owners of the recordings they play. Rep. John Conyers (D-Mich., pictured right) and Rep. Darrell Issa (R-Calif.) introduced the bill (H.R. 848) in the House. The Senate bill is sponsored by Patrick Leahy (D-Vt., pictured left), Orrin Hatch (R-Utah), Dianne Feinstein (D-Calif.), Bob Corker (R-Tenn.) and Barbara Boxer (D-Calif.).

“Our ignorance of intellectual-property rights on this issue is a worldwide embarrassment, and it must end now,” said Issa.

[ASCAP, BMI, and SESAC collect royalties from broadcasters and pay the composers and publishers of musical compositions. The Performance Rights Act would require radio to make additional payments to the owners of recording copyrights, which are in most cases record labels, who’d by law be required to split the proceeds with performers. Text of the bill is available here.]

Industry proponents of the bill (which include record industry lobby musicFirst, royalty agency SoundExchange, label organizations like the RIAA and A2IM, and unions like AFTRA) suggest the law is about achieving “fairness,” not only for performers, but across music platforms. “The U.S. recognizes a performance right for artists on all other platforms, including satellite radio, Internet webcast radio, and cable radio channels,” reads the AFTRA press release.

The processes for setting the rate and collecting and distributing royalties would be similar to that set up for webcasting royalties. The rate could be negotiated between radio and the record industry, but a failure to reach an accord would require the Copyright Royalty Board to set a statutory rate. SoundExchange would collect and distribute payments. The proposed law has would allow small broadcasters to pay just $5,000/year, and non-comm stations just $1,000. Talk radio and aired religious services would be exempt.

NAB president/CEO David Rehr framed the legislation as a bail-out for the record industry. “Although the proponents of H.R. 848 claim this bill is about compensating artists, in actuality at least half of this fee will go directly into the pockets of the big record labels… Although the big record labels have seen their revenues decline over the last decade, local radio broadcasters are not the reason the recording industry is losing money, and it should not be the industry to fix it.”

The Free Radio Alliance was set up by broadcasters to fight the push for recording royalties. Spokeswoman Cathy Rought called the measure “bad public policy” in light of the economy. “Any measure which will threaten the family-supporting jobs of more than 125,000 people employed by radio, the more than $6 billion in local community support of non-profit and service organizations, and the ability to introduce more diversity in station ownership is a short-sighted approach.”

More coverage in Billboard here ; BetaNews here ; and MediaWeek here.


“There’s increasing lip service to digital strategies, yet almost none of the recent job shufflings in radio that I’m aware of include any announcements about the beefing up of digital divisions, digital deals, digital sellers, etc.” That’s Mark Ramsey in Hear 2.0 (here). Instead, he observes, radio is cutting staff and fighting harder to sell on-air time. His point: If your digital strategy isn’t yielding the results to make it worth your sales staff’s time, fix it, don’t ignore it!


Last.fm co-founder Martin Stiksel tells The Guardian (UK) he worries Britain’s complicated music royalty system is a very real threat to his business and other like it, and could be “killing online innovation.” He told the paper, “Where we’re standing, it’s not only more complicated, but also more expensive. It’s an absolute nightmare in the grand scheme of things. We are further away from a simple licensing model – the sort of thing FM radio has – than ever before.” While the UK’s copyright system is already criticized as being overly-complex, Communications Minister Lord Carter recently announced plans to create another copyright enforcement agency. Last.fm, purchased by CBS Radio in 2007, is based in London, and (according to Stiksel) boasts 25 million monthly users. He spoke to The Guardian here.


Now Slacker has a touch-screen interface on the Blackberry, with yesterday’s debut of the app for the Storm model (the radio provider had already been available on standard BlackBerrys running version 4.3 and above like the Curve and Bold models). More from CNet’s Crave blog here.


Larry Rosin of Edison Media Research would like radio to revisit the AFTRA streaming ads issue, and is alarmed that the debate has seemingly fallen by the wayside. “Let me see if I can get this started again as an issue,” he writes (here). [Note: AFTRA contracts call for 300% scale payments when creative produced exclusively for broadcast radio is later used online. Many broadcasters, to avoid the hiked charges when simulcasting online, simply replace their ads with online-approved ads, PSAs, or silence.] “Radio listening is evolving and changing. We should be platform neutral!… Advertisers should be delivered ALL listeners to our stations, regardless of the platform… I struggle to understand how this is good for AFTRA talent, who aren’t seeing ANY of their expected gold-mine from Internet usage.”

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