All Access Analysis: Battle Over Radio Performance Royalties
August 1, 2007 at 5:46 AM (PT)
YESTERDAY (7/31), some of the NAB's worst fears about radio paying performance royalties to artists and labels were realized in the form of Rep. HOWARD BERMAN (D-CA). According to a report in HOLLYWOOD REPORTER.COM, the chairman of the HOUSE INTELLECTUAL PROPERTY SUBCOMMITTEE began a hearing on the performance royalty issue by declaring that he wants to create a bill that would pay performers and the record labels a royalty for music played on terrestrial radio.
"I've wanted to hold this hearing for a very long time, not only because of my constituents but because as a policy matter it is time for Congress to re-evaluate the limitations of the current performance right for sound recordings," BERMAN said.
If such a bill passes both Houses, the only thing saving radio from getting an expensive reason not to play music ... is a veto from Pres. Bush
His notion was buttressed by the testimony of artists SAM MOORE and JUDY COLLINS. Arguing against that was ICBC BROADCAST HOLDINGS President CHARLES WARFIELD (NET NEWS 7/31), who tried to tar the issue by calling the royalty a "tax" on listeners."We oppose a performance tax because compensation to the record labels and artists is provided under the current system, and the effort to upset the careful balance, envisioned by Congress and beneficial parties for the past 80 years, is misguided," he said. "The existing model works for one very significant reason: The promotional value that the record labels and artists receive from free airplay on local stations drives consumers to purchase music."
Fewer Stations Playing New Music?
It certainly did when there were more music stations, playing a lot more current/new music than it does now. Even so, studies that allege that radio play actually hurts record sales would virtually be laughed out of court if there wasn't a similar "tax" on satellite radio.
Maybe that's why few on the House committee bought the "tax" angle to this issue. "This is patently not accurate," said Rep. SHEILA JACKSON LEE (D-TX). The REPORTER story quotes insiders predicting a BERMAN bill by the Fall, with a companion bill expected to come from the Senate.
If such a bill passes both Houses (not a sure thing, but still...), the only thing saving radio from getting an expensive reason not to play music ... is a veto from Pres. BUSH. Such a prospect will do little to calm radio's fears.
What's The Future Hold?
How did this potential calamity get this far? The ELECTRONIC FRONTIER FOUNDATION's FRED VON LOHMANN wrote to an L.A. TIMES blogger that "collecting more royalties wouldn't serve the basic purpose of copyright law. The point of copyrights is to provide an incentive for those who create music. With plenty of music being created ... there's no reason to obligate terrestrial broadcasters to provide more incentive by paying royalties. If anything ... the obligation should be dropped from webcasters so that they'll have parity with local stations."
Would radio and the NAB sign off on that in order to preserve the status quo?