Radio Ink - Radio's Premier Management & Marketing Magazine

• News Tips
• Advertise
• Conferences
  • Convergence
  • Forecast
• Back Issues
  • Articles
  • Back Issues
• Lists
• Blogs

WASHINGTON -- May 13, 2009: The Performance Rights Act has passed in the House Judiciary Committee. The bill was introduced by Judiciary Chairman John Conyers (D-MI) and was expected to be approved in committee; it now goes on to a vote in the full House.

There are still several steps before this bill becomes law, if it ever does: A similar bill, introduced by Sen. Patrick Leahy (D-VT), must be passed by the Senate, and then the differences between the versions will need to be reconciled before a final version can be sent to President Obama.

Conyers decided to go ahead with the committee vote on the bill over the objections of civil rights groups and members of the Congressional Black and Hispanic Caucuses, who urged that a hearing be held to examine the impact of a performance royalty on minority radio. Radio One also strongly protested the bill, with a rally sponsored by the Detroit cluster at Conyers' office in the city today.

The Detroit News reports that an amendment, proposed by Conyers, reducing fees that would be charged to small stations was added to the bill. With the amendment, stations grossing less than $100,000 would pay $500 a year, those grossing between $100,000 and $500,000 would pay$2,500, and those making between $500,000 and $1.25 million would pay $5,000. Additionally, there will be a one-year delay in enforcement for larger stations, while payments will be delayed three years for those grossing less than $5 million.

Conyers also asked for a Government Accountability Office report on the bill's effect on broadcasters, but still proceeded with the vote.

A Broadcaster Reacts

Shortly after the bill went through, Radio Ink got in touch with Randy Hawke, OM of Mid-West Family Broadcast Group's WJJO/Madison.

"The concessions that are being made are being made to get the bill through are a Trojan horse," Hawke says. "Once it is on the books that paying this is what radio has to do, they will come back for their pound of flesh."

He continues, "Performance royalties are wrong. They will mean local job and money loss for states. They will harm minority radio and they will deter the growth of music as an art form, period. First, we already pay for our music.  The songwriters like Bono have billions of dollars. If you write a song and no one ever performs it, how much money do you make? How much of their royalties are they providing performers?"

Hawke notes that artists lie Bono will benefit from the bill at the expense of new artists. He says, "The future Bonos need to know that this bill will keep Bono on the radio and them off. Playing unfamiliar songs from unfamiliar artists costs radio listeners, which in turn costs radio money. That is a fact. Adding another cost hurdle to breaking new music will harm music as an art form.  In order to prove a stronger ROI on every song, we will be forced to play U2 'I Still Haven't Found What I'm Looking For' again.

Hawke points out that radio can make money without music, through sports and all talk morning drive shows, as well as spoken-word format. He says, "For decades people like Bono have gotten a cut of morning drive revenue. Why? The formulas [for songwriters' royalties] are based on overall revenue of the station."

NAB Response

"We were pleasantly surprised by the considerable bipartisan opposition to a performance tax, even in a committee where support for the record labels is strongest," said NAB EVP Dennis Wharton.  NAB applauds these nine members for standing with America's hometown radio stations, their 235 million weekly listeners, and the yet-to-break artists who will lose their number one promotional platform if this bill is enacted.

"Nearly half the House of Representatives already opposes RIAA efforts to feather the nest of foreign record labels. Record label abuse of artists from Count Basie to Prince is well-documented, as evidenced by scores of lawsuits filed by musicians cheated out of royalties. Moving forward, the fundamental question is this: If the debate is about 'fairness to artists', why should the record labels get one penny from a performance tax on radio stations?"

One hundred and ninety-two House members have signed on to the Local Radio Freedom Act, a resolution opposing performance royalties on broadcast radio.

The View From SoundExchange

The SoundExchange organization would collect any royalties imposed on behalf of copyright owners and artists under the Performance Rights Act, so Radio Ink asked SoundExchange Exec. Director John Simson for his take on the bill's making it through committee.

"For 80 years radio has been given a windfall: free recordings," he says. "This windfall was simply an accident of history. If songwriters had not had their rights granted before radio started commercial service, it is doubtful that they'd have rights, either." Simson says broadcasters "did everything they could" to stop a royalty for songwriters, but, "Ultimately, they agreed to pay, and radio has prospered."

He goes on, "No other industry gets to use its primary content without the permission of the owner for free. I've heard radio people say that this is free promotion for the artists in exchange for free content. But shouldn't the artist have the right to determine if they want that free promotion? In the 1930's several major artists insisted that their record labels print 'Not Authorized For Radio Play' because they didn’t want radio playing their recordings without compensation.  Every other part of radio, from newscasters to DJs to sports teams to the receptionist answering the phone, has the right to negotiate the terms of their relationship with radio. Only recording artists have no right to do so."

Simson points out that nearly every other country has a broadcast right, and says, "This is a historic occasion; never before has a performance rights bill been voted out of committee to the full House. In years past, we've had bills introduced, but until two years ago, we'd never had a hearing; we've never had the support of the Chairman of the House and Senate Judiciary Committees. But this is only a first step, and we still have a long way to go. Hopefully, broadcasters will understand that we are committed to this fight until we achieve the simple justice we deserve."

He continues, "We have reached out to radio to try and negotiate a fair resolution of this issue, and radio's response has been: 'We won't pay a penny for the recordings that bring us billions of dollars a year in advertising.' Even without radio at the table, we have shown that we are trying to be fair and balanced, as evidenced by the very generous accommodations included in the bill for small and non-commercial stations, including a three-year delay in implementation for stations under $5 million and a one-year delay in implementation for our largest stations. Over 90 percent of all stations will be covered by the various accommodations included in the bill. But it is unfair for broadcasters to complain about the accommodations or the terms when they are unwilling to sit down and engage in a dialogue. It is time for radio to sit down and negotiate a fair and just resolution to this issue."

Send This Story To A Friend