Labels, Radio Come Out Swinging As Royalty Bill Is Introduced

The looming battle over performance royalty for terrestrial radio has officially entered round one. Sens. PATRICK LEAHY (D-VT) and ORRIN HATCH (R-UT), and in the House Reps. HOWARD BERMAN (D-CA) and DARRELL ISSA (R-CA), has submitted concurrent bills that would require that radio stations obtain a statutory license to play music, which would require the payment of a government-set annual fee to cover all the music they play, FORBES reports.

Mindful of not coming off as a Draconian money grab, the legislation limits the maximum annual fee for stations that generate less than $1.25 million in revenue a year to $5,000, Nonprofit stations, such as college radio stations and National Public Radio affiliates, would pay a maximum of $1,000 a year. Commercial stations ... what they'll pay is up for what promises to be an intense debate.

Naturally, the NAB wasted no time in slamming the bills. EVP/Media Relations DENNIS WHARTON released a statement, replete with supportive quotes from artists -- and label executives such as TOM BIERY and KEN LANE -- that declared: "After decades of EBENEZER SCROOGE-like exploitation of countless artists, [the RIAA] and the foreign-owned record labels are singing a new holiday jingle to offset their failing business model. The NAB will aggressively oppose this brazen attempt to force AMERICA's hometown radio stations to subsidize companies that have profited enormously through the free promotion provided by radio airplay."

As one may notice by the tone of the NAB's response, an amicable resolution to this doesn't seem to be in the cards right about now.

Nevertheless, such verbiage hasn't deterred the bills' sponsors. "Radio play may have promotional value to the artist, but there is a property right in the sound recording, and those that create the content should be compensated for its use,'' LEAHY said in a statement.

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