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Strong Reactions to Performance Royalty Bill

NAB, NRB opposes, while music groups call Watt’s bill “free market” measure

Reactions continue to arrive to the introduction of North Carolina Democrat Rep. Mel Watt’s latest bill to require radio to pay a streaming performance royalty for airing copyright covered music. How much attention the measure will get in Congress is unclear, since committees related to communications and broadcasting have postponed their meetings originally slated for this week due to the government shutdown.

NAB EVP Communications Dennis Wharton says the trade group “respectfully” opposes the “Free Market Royalty Act,” and appreciates the support of 183 lawmakers who back the “Local Radio Freedom Act,” a nonbinding resolution opposing a new performance royalty for radio.

NAB believes market-based negotiations like the recent Warner Music Group-Clear Channel agreement (which covers on-air and digital revenue in exchange for a lowered streaming music royalty fee,) “demonstrates that this issue is being addressed in the free market. This legislation would impose new costs” on radio stations “that jeopardize the future of our free, over-the-air service,” according to Wharton.

Future of Music Coalition Interim Executive Director Casey Rae countered that the recent deals do not ensure fair compensation to artists and only apply to those at the negotiating table.

Label-backed musicFirst too, argued that the Watt legislation is a free market negotiation measure. “Under this legislation, the amount broadcasters pay in performance royalties is the amount they negotiate themselves in a free market,” stated musicFirst Coalition’s Executive Director Ted Kalo. “They have long said that the promotional value they provide is worth more to performers than performances are worth to radio. If that is true, they would continue to pay nothing. However, if they have been getting a free ride for decades on the backs of performers, a free market negotiation would finally compensate artists for their performances.”

The National Religious Broadcasters is “strongly opposed” to the bill. NRB President/CEO Dr. Frank Wright says “performance tax legislation would be a crushing blow to many Christian radio stations” and suggests the measure is “fundamentally flawed as it rests on the faulty premise that all the value in radio airplay of music flows to broadcasters — an assumption refuted by reason and experience.”

“The demonstrable value of radio airtime is ignored by many advocates of a new over-the-air performance tax,” adds Wright who says NRB, too, supports the Local Radio Freedom Act.

Wright offers an olive branch to Christian music artists, saying the trade group would welcome a “more coordinated collaboration” with them “to both preserve Christian radio and to benefit the music of those artists.”