New Royalty Bills Resurface In Congress
August 20, 2012 at 3:27 PM (PT)
Rep. JERROLD NADLER (D-N.Y.) is set to introduce a bill that would increase the royalty-paying field between cable, satellite and Internet radio, THE HILL reports. NADLER's "Interim FIRST Act" would raise artist royalties on cable and satellite radio to the level being assessed to Internet radio.
The draft of the bill also would make traditional radio stations pay a higher fee for live-streaming their broadcast online, which is intended to make up for broadcasters not paying a fee when they play artists' songs over the air.
"The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair," NADLER said in a statement. "We can’t start a race to the bottom when it comes to royalty rates and compensation for artists. The Interim FIRST Act would provide artists with fair compensation for the valuable creations they share with all of us."
It didn't take long before the bill elicited supporters and critics. Supporting it was the MUSICFIRST Coalition, as Exec. Dir. TED KALO declaring, "The only real solution is for Congress to create a legal performance right, but raising terrestrial radio’s digital royalties is an important interim step towards that goal. By effectively reimbursing performers for lost income, Rep. NADLER’s draft legislation recognizes the injustice of denying fair pay for airplay. The discussion draft proposes a 21st century marketplace standard that treats artists and platforms fairly and equally."
Strenuously begging to differ was NAB EVP/Communications DENNIS WHARTON, who issued the following statement:
"NAB strongly opposes Rep. NADLER's draft bill, which fails to recognize the unparalleled promotional value of local radio airplay and which would kill jobs at AMERICA's hometown radio stations. 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. We're pleased that 177 House members and 22 U.S. Senators agree that America's local radio stations should not be subjected to job-killing performance tax legislation that would divert millions of dollars to offshore record labels."
The Chaffetz Version
Adding to the Congressional brouhaha is a bill being introduced by Rep. JASON CHAFFETZ (R-UT), which would put Internet radio services such as PANDORA on the same royalty-setting standard as other digital radio services. PANDORA fully supports this, as it would lower its royalty fees to make it more level with the rates other digital radio services pay. CHAFFETZ argues that current royalty rules force Internet stations to pay much higher rates to stream music than cable and satellite services.
While both bills essentially level the royalty playing field, NADLER noted, "Where he and I differ is that I do not believe establishing such a level playing field means we have to hurt performing artists in the process. Instead, we can create royalty standard parity for all parties and compensate creators fairly." What's more, CHAFFETZ's bill also does not address the lack of a performance right for songs played over broadcast radio.