Radio Interests And Pandora Team Up To Slam Rep. Nadler's Royalty Bill

"The Enemy Of My Enemy..."

Finally there's something that terrestrial radio interests and PANDORA both agree on: They all oppose Rep. JERROLD NADLER's  "Interim FIRST Act" bill, which would level the royalty-paying field between cable, satellite and Internet radio -- and raise terrestrial radio's love-streaming royalty (NET NEWS, 8/20). As to be expected, none of the parties want to pay more for broadcasting music, while PANDORA wants to pay less because everyone else is paying less.

"The current system for establishing royalty rates is astonishingly unfair," PANDORA's TIM WESTERGREN said in a statement to THE HILL. "Fairness demands that all music related rate settings utilize the same 801(b) standard ... "Congressman NADLER’s discussion draft would only perpetuate this hypocrisy and worsen an already flawed legislative mistake that is discriminating against new technology and hampering innovation,"

Calling NADLER's bill "The RIAA Bailout Act Of 2012," TECHDIRT's MIKE MASNICK noted, "As it stands now, [royalty] rates are so damaging that PANDORA -- the top player in the space -- has made it clear it may never be profitable. Yes, never. NADLER's bill would effectively make sure that no one else in that market would be profitable either. The end result? Many of these services don't exist or never get started. That would actually mean fewer services, fewer listeners and lower royalties."

RAIN reports that THE NATIONAL RELIGIOUS BROADCASTERS (NRB) joined WESTERGREN in opposing NADLER's bill; its statement claimed that it "would place a new and unwarranted burden on many Christian radio broadcasters."

The FREERADIO blog piled on, asserting, "NADLER’s draft legislation would threaten local radio and the hundreds of thousands of jobs it supports. The draft would make radio stations pay a higher fee for live-streaming their broadcast online, which is intended to make up for broadcasters not paying a fee when they play artists’ songs over the air. NADLER said, 'The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair,' and the MUSICFIRST Coalition (representing the big record labels and artists) said, "The only real solution is for CONGRESS to create a legal performance right, but raising terrestrial radio’s digital royalties is an important interim step towards that goal.' It’s clear that the ultimate objective is a back door attempt at a performance tax since the record labels have been unsuccessful to date in imposing a Congressionally mandated fee on local radio."

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