Forbes Slams Performance Royalty For Radio -- Terrestrial And Net

Pro-Business

Congressman MEL WATT's bill to make terrestrial broadcasters pay a performance royalty to artists has already drawn opposing views depending on the party (NET NEWS, 9/30). A FORBES opinion piece sides with radio in arguing that such a bill would damage the industry. At the same time, the writer also concluded that the Net royalty rates are bad for Net radio broadcasters.

"Through the WATTS legislation, the record companies are now asking to have the benefits of airplay and have radio stations pay them for the benefit of airplay," writer CHRIS VERSACE noted. "Should that legislation come to pass, it would have a direct impact on the bottom lines of companies like SAGA COMMUNICATIONS, SALEM COMMUNICATIONS, CUMULUS MEDIA and even CBS. NATIONAL ASSOCIATION OF BROADCASTERS spokesman DENNIS WHARTON has said that WATT’s proposal would "kill jobs at AMERICA’s hometown radio stations" and direct money "to offshore record labels." With the last three months generating less than 150,000 jobs on average according to the Labor Department, is now the time in the recovery to enact such legislation?"

He also cited PANDORA and Net radio parties' predicament with its performance royalty rules. "Even as Internet radio grows in popularity, the costs make profitability difficult to achieve because the government royalty board at the LIBRARY OF CONGRESS determined that Internet radio stations like PANDORA pay six times the royalty rate of other mediums," he wrote.

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