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NAB’s Smith Changes the Performance Royalty Argument

But 'no' still means 'no'

It was interesting listening to new National Association of Broadcasters President/CEO Gordon Smith speak to the Media Institute this week. You can listen here.

It sounds like NAB is taking a new tack in the performance rights issue. Smith said he could understand how the labels and performers feel, because “their business model is broken.”

I don’t remember his predecessor showing empathy with the labels over this issue; quite the contrary. Is this the first sign of a new, more conciliatory strategy at NAB on this issue?

Note, however, Smith and the NAB also are now saying that the roughly $500 million radio pays for performances rights each year should be re-distributed; different argument, but still a line in the sand.

This week’s Hill meeting may not have changed anything but it’s notable that the language used by both sides in issuing press releases afterwards had little of the rancor we’ve come to expect in this ongoing fight. At the least, members of Congress seem to have gotten NAB and the labels to be more polite.

Smith also doesn’t care much for current way the bills (H.R. 848 and S. 379) are written; they would cap the fees to $5,000 for small, non-com and religious stations with under $1.5 million in gross yearly revenues. Smith says the idea of “peeling off” small stations and just including big stations “says to every broadcaster, particularly minority broadcasters, ‘You can be little but you can never be big.'” Finding that “offensive,” he said he couldn’t recommend that kind of a formula to the NAB board.

Changing gears, I got a kick out of what Smith said is THE most-asked question since he left the law firm of Covington & Burling:

“Why NAB? Don’t you know that’s an industry that’s dying?”

The hours and pay of this job are better, Smith quipped.