More Royalty Talk At NAB Town Hall Meeting
August 24, 2010 at 7:17 AM (PT)
NAB Joint Board Chair STEVE NEWBERRY, Radio Board Chair CAROLINE BEASLEY, Immediate Past Radio Board Chair CHARLES WARFIELD, Pres./CEO GORDON H. SMITH and EVP/Radio JOHN DAVID hosted a virtual town hall meeting to discuss NAB's recent performance tax advocacy efforts YESTERDAY (8/23).
At the direction of House and Senate leaders, NAB has recently held a series of meetings with musicFIRST. During the virtual town hall, NAB shared the history of the meetings and provided a forum to answer any questions about these discussions and NAB's strategy to defeat the Performance Rights Act still pending in Congress.
BEASLEY began the webinar by emphasizing that there was no agreement with MUSICFIRST. That was a point that was repeated throught the meeting by all participants.
NEWBERRY then walked the viewers through some background on the Performance Rights Act, and added that talks had gotten to the stage where NAB members needed to hear where they were, in detail, in order to make an informed decision. NEWBERRY didn't initially expect negotiations with MUSICFIRST to lead to anything acceptable. He said the side representing artists asked for 8% of total radio revenues and either a better streaming rate or one-quarter of digital revenue. Said NEWBERRY, "Both of those were absolutely unacceptable to the radio industry. Both of them were rejected immediately."
The Current Offer
NEWBERRY and WARFIELD ran down the specifics of the current proposed settlement, with a tiered royalty rate. The proposal breaks down like this:
* A maximum of 1% of net revenue for stations making more than $1.25 million in net revenue each year.
* For stations in the $500,000-$1.25 million revenue window, a flat rate of $5,000
* For stations with net revenues of $100,000-$500,000, a rate of $2,500 or 1% of revenue, whichever is less
* For stations with revenues between $50,000 and $100,000, a rate of $500 a year
* For stations under $50,000, or for non-commercial or nonprofit stations, a payment of $100 or 1% of net revenue, whichever is less. Nonprofits with more than $100,000 in revenues would pay a flat $1,000 fee
Gordon Smith Asks How Long Radio Wants To Fight This Fee
GORDON SMITH then spoke, saying, "I understand, and I think you do, too, that the purpose of the NAB is to be your advocacy voice in WASHINGTON, D.C." SMITH went on to explain that Congress has "gone after" several other industries, therefore NAB -- despite feeling negotiaions would go nowhere -- sat down with MUSICFIRST.
In what sounded like an admission that some sort of settlement was inevitable, SMITH said the issue was not going away -- even if it was defeated this time. He said radio must consider how much political capital it wants to spend on fighting royalties.
You can register and view the online meeting here.
[Deal ... or no deal? Where are you at in regards to this Performance Rights Act still pending in Congress? Should the NAB stop fighting? Or fight on to block it or get even lower fees? Please comment below.]