Artist And Radio Pile-On In Washington, D.C.
June 12, 2008 at 5:31 AM (PT)
The Capitol has been in the eye of a lobbying hurricane this week from both the radio and record label/artists interests, While NANCY SINATRA was the star witness at a House hearing on instituting a performance royalty for radio, Internet broadcasters were personally contacting Congressmen and women to lobby against a recently mandated increase in royalty rates.
At the HOUSE JUDICIARY SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY hearing chaired by bill sponsor HOWARD BERMAN (D-CA), NANCY SINATRA told the representative. "Imagine people taking [artists'] product to build their own hugely successful businesses. Imagine those people telling you that they are doing you a favor ... When most people are asked how much you think artists are paid on radio, [they] usually say a few cents, but ... we are paid zero ."Although SINATRA maintained that "We are in no way seeking to harm broadcasters. Please believe me. We just want to be paid our fair share,"
Imagine people taking [artists'] product to build their own hugely successful businesses. Imagine those people telling you that they are doing you a favor.
Speakers from radio interests certainly begged to differ. COMMONWEALTH BROADCASTING CEO STEVEN W. NEWBERRY, asserted that broadcasters promote artists' music through airplay that equals $1.5 to $2.4 billion a year in promotional value.
Just how much money is at stake here? CNNMONEY.COM reports that WACHOVIA CAPITAL MARKETS analyst MARCI RYVICKER estimated that broadcast performance royalties sought by the RIAA could cost broadcasters $2 to $7 billion annually, or 10% to 35% of industry revenue. Supporters of BERMAN's bill dispute those numbers, noting that royalty fees are capped for small commercial stations at $5,000 per year -- about 75% percent of terrestrial stations qualify for that cap. That places the lion's share of royalty revenue being drawn from larger radio groups such as CLEAR CHANNEL, CBS and CUMULUS.
CNNMONEY also reports that Internet radio lobbyists were dropping in congressional offices this week to complain bout the increase in performance royalties. PANDORA RADIO founder TIM WESTERGREN said 70% of the revenue raised by his Internet radio website goes to performance fees; the webcasters propose a lowering of Internet royalties to match rates paid by satellite or cable radio stations, which range from 6% to 15% of revenues.
"The industry that's really in trouble today is Internet radio," Rep. ZOE LOFGREN (D-CA) said.