Northern Broadcasting Quits NAB Over Performance Rights Offer
NAB Defends Its Efforts
October 27, 2010 at 5:13 PM (PT)
It looks like musicFIRST's "deeply troubled" reaction to the NAB's performance royalty offer is far from the most critical. NORTHERN BROADCASTING GM CHARLIE FERGUSON, who oversees the company's six stations in TRAVERSE CITY-PETOSKEY, MI, has sent the NAB a letter, canceling the radio group's membership in the organization.
"It's been bothering me for quite a while, FERGUSON said. "The idea that radio should be paying artists to play their music strikes me as silly. We have had a mutually beneficial relationship with the artists ever since radio started playing records at KDKA/PITTSBURGH, when record stores offered records for the station to play for mentions that they cam from the record store. That's how the radio advertising industry came about. The way I see it, every time we play a DOOBIE BROS. song, we're giving them a free three-and-a-half-minute commercial.
We don't have to have to settle anything ... We already flipped one of our FM stations to Talk -- and it saved us $40,000 in music royalties by switching to Talk ... and we're just in a little tiny market
"I got fed up with the NAB's attitude about wanting to settle this, he continued, "We don't have to have to settle anything. We need to preserve the current relationship we have with the artists. We already flipped one of our FM stations to Talk -- and it saved us $40,000 in music royalties by switching to Talk ... and we're just in a little tiny market."
"The NAB is not going to miss my money," FERGUSON admitted. "I just want them to know that there's no way on God's green earth that we should be settling with the record labels. It's a slippery slope. If it's 1% of our revenues now, in three years it'll be 2% and in five years it will be 3% -- and we don't have that kind of margin to afford that."
Should a royalty compromise become law, besides flipping more music stations to some form of Talk, he would charge record companies to mention their artists when they play in local venues -- and would seriously consider some sort of pay-for-play arrangement to offset the royalty costs.
"There are an awful lot of small-market stations that find themselves in the same position we are in," he concluded. "A position where we're not going to renew our Arbiter ratings contract, so we're definitely not interested in paying performers royalties in any way, shape or form. That's why we are no longer willing to recognize the NAB to represent our company in those negotiations. Period."
The e-mail went as follows:
As the General Manager of our company, I cannot continue to pay dues to an organization that sells out to the record labels on the Performance Tax issue. FM chips in cell phones is a red herring and your organization can no longer represent our company and our Radio stations in any matter of financial or political importance.
NAB Stands Firm On Performance Rights Offer
NAB EVP DENNIS WHARTON told ALL ACCESS that he wasn't aware of any other NAB membership cancellations, then added the following statement in response to NORTHERN BROADCASTING GM CHARLIE FERGUSON's e-mail:
"We believe history will show the NAB Board this week made the right decision. It's better to engage our adversaries and shape the future than have it shaped for us."
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