Rehr Urges Congress To Oppose Performance Tax
May 9, 2007 at 2:28 PM (PT)
NAB President/CEO DAVID REHR sent a letter to every senator and representative today, urging lawmakers to oppose any attempt to levy a "performance tax" on local radio broadcasters for music airplay.
REHR wrote, in part, "The recording industry is asking CONGRESS to support the creation of a new 'performance right' that would require local broadcasters to pay for the use of sound recordings when they are aired on the radio. But this is not a right -- this is a new tax.
"Not only would this new performance tax upend the longstanding mutually beneficial business relationship that exists today between record labels, recording artists and broadcasters, but it would have a serious financial impact on broadcasters that could affect their ability to serve their local markets.
The existing system actually provides the epitome of fairness for all parties: free music for free promotion.
"For the last 70 years, a symbiotic relationship has existed between radio and the recording industry. Radio has prospered with the use of recorded music, and record labels and performers have benefited from airplay and other promotional activities of local broadcasters. From this free airplay, the recording industry enjoys increased popularity, visibility and record sales. Performers also benefit from radio airplay and on-air interviews, often timed to coincide with concert appearances in the radio stations' service areas. In many cases, radio stations promote new and emerging musicians giving them needed exposure and access to a listening market.
"The system in place today adequately compensates everyone. Radio stations pay hundreds of millions of dollars every year to composers and publishers through fees paid to ASCAP, BMI and SESAC. While record labels and performers may not receive payments from broadcasters, the free promotion that they receive by having their music played on the radio increases album and concert sales, which ultimately results in compensation for performers and record labels.
"The existing system actually provides the epitome of fairness for all parties: free music for free promotion. It has allowed American music and the recording industry to thrive and grow and has allowed local radio broadcasters to better serve their communities. Levying a tax on local broadcasters to play recorded music will compromise these benefits and will upset longstanding business relationships among record labels, composers, performers and broadcasters that have served all of these industries well for decades."
The full letter can be read here.