GAO Report Raises Performance Royalty Fears
Estimates That Labels Could Make $19 Million Annually
June 8, 2010 at 11:25 AM (PT)
The GENERAL ACCOUNTABILITY OFFICE has conducted a study which found that the proposed Performance Rights bill, which would require radio stations to pay royalties to performers, musicians and labels might have some negative repercussions. The study concluded that stations might have to reduce staff, flip to non-music formats or even go off the air entirely, reports ARS TECHNICA.
Positive ramifications would be giving labels what it estimated to be at least $19 million annually, which could be used "to invest more heavily in the creative process of music."
"The additional revenue from a performance right would benefit record companies, musicians and performers, and session musicians differently, but could lead to more investment in the creation of music," the report concluded. "By increasing the revenues derived from a song, the act could encourage record companies and musicians to make additional investments in music."
On the other hand, the FCC sent a letter to the GAO, demanding that it examine other possible negative consequences. "This discussion might note the potential impact on the public interest from those actions," the COMMISSION wrote. "For example, the necessity to make staff cuts would conceivably diminish the ability of a radio station to continue to provide service to its community ... This news and information programming can be critical at times of emergency, such as natural disasters, adverse weather, and other crises."
Read the full GAO report here.
[Do you feel this report is on-target? Will it ultimately sway this decision in favor of radio? Your comments are welcome below.]