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It’s Baaack — Performance Royalty Issue

Nadler’s draft ties broadcast radio to streaming royalties

There’s been a new shot across the bow on the performance royalty issue.

While one lawmaker is drafting a bill to level the music royalty playing field among digital audio services, now New York Rep. Jerrold Nadler is going a step further — drafting a bill that would link broadcast radio to streaming royalties.

A discussion draft states: “Terrestrial broadcasting is the only industry in America that can use another’s intellectual property without permission or compensation. Broadcast radio clings to an old business model that is out of step with the modern, digital marketplace for recorded music.”

Radio, which pays music licensing fees to groups like BMI and ASCAP, has argued before that stations provide new artists with exposure and promotion, and that those have a monetary value that should be considered.

The bill would direct the Copyright Royalty Board to take the value of a song’s intellectual property into account when deciding the royalty paid by a broadcaster for the Internet simulcast of its live radio music feed. If passed, the measure would also treat all audio services the same using a market-based rate standard regardless of platform. Currently satellite radio and audio over cable services pay a lower rate than do newer digital audio services like Pandora.

NAB opposes the draft measure. The broadcast lobby’s EVP Communications Dennis Wharton points out that the draft “fails to recognize the promotional value of local radio airplay” and the extra expenses incurred by stations were the measure to pass would result in lost station jobs. “We continue to support private, company-by-company negotiations that are driven by the free market, as was reflected by the recent deal between Clear Channel and Big Machine Label Group,” said Wharton.

With lawmakers away until next month and little time left in this session of Congress the bill would seem to have little chance of passage, however what’s clear is an effort to pave the way towards raising the issue again come January. The effort supported by record labels to get broadcast radio to pay a performance royalty has twice failed in Congress.