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All Access Exclusive: NAB's Gordon Smith -- Revenue Sharing Likely Key To Performance Royalty Resolution
The Week's Power Player Interview
July 16, 2014 at 4:38 AM (PT)
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The performance royalty/tax battle being waged in CONGRESS will most likely be solved through private-party revenue sharing deals that have been consummated on digital platforms, NAB Pres./CEO GORDON SMITH predicted in this week's exclusive ALL ACCESS Power Player Interview. A similar revenue sharing deal for terrestrial radio was on the table during past negotiations between radio and content provider interests.
"There's a deal there that could be made in the future," SMITH said. "In fact, we got very close to a deal that CONGRESS could pass but were unable to get it done. The deal we were negotiating was very close to the revenue sharing deals many of our members have made with the labels. Those were done privately, so any mandate the CONGRESS could impose is supplanted by private-party negotiations."
Considering the polarized, near-paralysis of the current CONGRESS, the digital revenue sharing deals could be the best hope for a terrestrial resolution. "We welcome every deal that has been made because it shows that the market can often do what CONGRESS cannot," he said. "Markets don't sit still. I feel there's a deal to be made for terrestrial that's similar to what's been made for the digital platforms, a deal that was never finalized in CONGRESS as it was being discovered and applied in the marketplace. Something could be finalized that could actually advance the cause of music without penalizing radio on all platforms and at same time, benefit performers as well."
Read the entire interview here.

