Performance Royalty Bill Testimony Underway
March 10, 2009 at 12:08 PM (PT)
SMASHING PUMPKINS founder BILLY CORGAN told Congress TODAY that it is time to enact a fair performance right on radio for America’s artists and musicians, saying H.R. 848, the Performance Rights Act, "redresses an outmoded, unfair practice that favors one participant’s needs over another. This legislation is simply a form of restoration to artists that is long overdue."
"This issue is one of fundamental fairness," CORGAN said. "If the performance of a song has value to a particular terrestrial radio station in its airing, I believe it is only right to compensate those performers who have created this work. Simply put, if a station plays a song, both the author and the performer should be paid. These particular performances must have value to the stations or they wouldn’t be playing them."
At this time, stations are laying off employees, reducing wages by 5-10% and a number of radio companies are literally teetering on the verge of bankruptcy. If this bill is enacted, it will put at risk an industry that employs nearly 106,000 people.
CORGAN told the committee that "being a performer requires countless hours of dedication to your craft. It is not an easy business to undertake, and for every success story, there are many who have not had the opportunities that I’ve had. We must consider that, for many artists, the difference between receiving these resources is the difference between a life in music and a life out of music."
Steve Newberry Speaks To The Committee
NAB Radio Board Chairman STEVE NEWBERRY, who's also Pres./CEO of KENTUCKY-based COMMONWEALTH BROADCASTING CORPORATION, testified earlier TODAY on behalf of NAB in a House Judiciary Committee hearing on legislation that would require local radio stations to pay a new fee for music aired free to listeners. LARRY PATRICK, Managing Partner of MARYLAND-based media brokerage firm PATRICK COMMUNICATIONS, and owner of 14 radio stations in WYOMING, also testified during TODAY's hearing.
Said NEWBERRY, "It should come as no surprise to anyone that I am here to express my opposition to H.R. 848. But I can tell you that since I last testified before this Committee, the sharp economic downturn has intensified my concerns about this bill and the impact it will have on local radio stations across AMERICA.
"At its heart, this bill attempts to create a conflict between artists and radio stations where no conflict exists. In reality, local radio has been supporting the music industry for decades.
"Which is why it boggles my mind that a bill that is supposed to be about benefiting artists, takes 50% of the performance fee and puts it into the pockets of the big four record labels, most of which are not even AMERICAN companies. The record labels actually walk away with more money under this bill than do the featured artists. Let me repeat that: the record labels actually walk away with more money under this bill than do the featured artists."
Larry Patrick Testifies
PATRICK added, "I have been a part of the radio industry for 40 years, and I can tell you that over the course of my career, I have never seen what the radio industry is currently experiencing. The economic downturn is having a significant and devastating effect on local radio. But as bad as the current local radio landscape is, it will deteriorate even further and more dramatically if H.R. 848 were to be enacted.
"The labels suggest that the provision for small market operators of an annual flat fee of $5000 would not harm the small market operators. I'm a small market radio operator also and I know how much this will hurt. And I know hundreds of small market radio owners who barely make $25,000 a year from their stations. To pay this fee, even a $5000 fee, stations could have to eliminate covering high school sports, local origination and would reduce their staffing further. Any additional fees also threaten their ability to provide emergency services that are so critical to the thousands of small towns across the country.
"The recording industry has also argued in the past that if the new performance fee were adopted, stations could simply raise their advertising rates to pay for the new fee. Nothing could be further from the truth. If radio broadcasters could get more money for their advertising spots, why wouldn't they be doing that already? The truth is that ad rates are dropping sharply, not increasing.
"At this time, stations are laying off employees, reducing wages by 5-10% and a number of radio companies are literally teetering on the verge of bankruptcy. If this bill is enacted, it will put at risk an industry that employs nearly 106,000 people across AMERICA. I am not overstating the situation when I say that such extraordinary fees imposed on local radio stations in light of the current economic plight of local radio could be absolutely devastating."
NAB Launches Ad Campaign
The NAB has launched a new print advertisement that highlights the impact a new fee, or "performance tax," would have on the music local radio stations play. In an ad placed today in CAPITOL HILL publications POLITICO and CONGRESS DAILY, the NAB ad features the "Performance Tax Hot 100" chart, which contains no music.
"Radio is where listeners discover new music and new artists. It's where the artists you love got their big breaks. But the record labels are pushing a bill that would levy a fee, or 'performance tax,' on the music local radio plays. That means radio stations will inevitably play less music and stop taking chances on unknown artists. The performance tax; bad for radio, bad for music," the ad reads.
The ad coincides with a hearing in today's House Judiciary Committee.
To view the ad, click here.