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And Then Turns His Attention To The NAB

6-10-14

Portnow called the NAB's Local Radio Freedom Act, "nonsensical and nonbinding" and says the organization has run out of arguments and out of time. "The National Association of Broadcasters  has spent a lot of money lobbying to maintain their free ride. During each session of Congress, they spread myths that never stand up to any reasonable assessment of the facts. Congressional leaders from both parties are working on real legislation to resolve this issue. Any copyright reform simply must include a radio performance right." Portnow went on to counter every argument -- calling them myths -- the NAB has made to describe the relationship radio has with the music industry as one that benefits both. Portnow outlines his six NAB Myths...

NAB Myth: A performance right is a money-grab from record labels.
Fact:
Artists would be the main beneficiaries of a performance right. Artists would receive 50 percent of royalties for their creative contributions, and an increasing number of artists are also copyright owners and would, therefore, get the other 50 percent too. When the performance right campaign launched, hundreds of artists signed on to join. This quest is about them.

NAB Myth: The campaign started because piracy hurt the record business, so record labels needed to look elsewhere for revenue.
Fact: Artists have been fighting for this basic right for nearly 90 years. Legends such as Bing Crosby and Frank Sinatra have spoken on the issue. The renewed focus on the issue is a result of  "new" radio (Internet and satellite) paying this royalty, exposing the hypocrisy of exempting "old" radio from paying their fair share.

NAB Myth: Promotional support by radio creates a "symbiotic relationship" with artists.
Fa
ct: Even by the NAB’s own (dubious) study, the benefit to radio outpaces the benefit to artists by 10 to 1. And any promotional effect would be taken into account by the rate-setting body. Internet and satellite radio also provide promotion, but pay a royalty. Further, a GAO study found "no consistent pattern between the cumulative broadcast radio airplay and the cumulative number of digital-single sales." Even Clear Channel CEO Bob Pittman admitted that, "clearly [promotion] is not enough, or there wouldn't be a decades-long battle over [performance royalties]."

NAB Myth: The royalty would put small stations out of business.
Fact: The last legislation introduced on this subject exempted every small radio station and even medium-sized ones, requiring 75 percent of stations to pay as little as a few dollars a day for music.

NAB Myth: The free market is addressing the issue with private deals.
Fact: There is no "free" market when one side of the transaction does not have a right to its property. Without a performance right, there can be no "free" negotiations. And when a bill was introduced to create a free market where musicians would have a chance to negotiate for fair compensation (the Free Market Royalty Act), the broadcast lobby opposed it.

NAB Myth: A performance royalty is a tax.
Fact: In Civics 101, everyone learns that taxes go to the government. Paychecks go to people who provide goods or services for money. Performance royalties would not go to the government, but rather to those who created the sound recordings. Therefore, they are not a tax. This obvious point was made clearly in a letter signed by seven free-market organizations, including Americans for Tax Reform: "A performance royalty is not a tax…. Paying a private citizen or business for the use of their property is clearly not a tax."




(6/11/2014 10:03:57 AM)
In the end who suffers? Small businesses. Owners of stations aren't going to allow their bottom lines to shrink due to royalty increases. Therefore, ad rates will increase. Large advertisers will simply increase their ad budgets and make up for it in increased cost to their consumers. That leaves less small businesses that are able to advertise on the level that they need to in order to stay competitive with the national franchises.

- Chad Gatlin
(6/11/2014 9:56:01 AM)
Expect a ton of cover songs if this passes.

- Lemonhead

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