Another radio performance royalty bill drafted


U.S. CongressRep. Jerrold Nadler (D-NY) has put forth a bill that would charge broadcasters an interim performance royalty based on song streaming until such time as the Copyright Royalty Board installs a rate for broadcast airplay. The NAB strongly objects.

Nadler is on the House Judiciary Committee, and is Ranking Member of the Subcommittee on the Constitution. That is not the appropriate subcommittee for a bill such as this, but Nadler is also a member of the correct one, the Subcommittee on Intellectual Property, Competition and the Internet.

Nadler’s bill is colled the Interim Fairness in Radio Starts Today (FIRST) Act. He stated, “Terrestrial radio companies have built into their businesses an exemption from paying a performance right. The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair. We can’t start a race to the bottom when it comes to royalty rates and compensation for artists. Artists deserve to be paid a market-based rate for their work, just like everyone else. The Interim FIRST Act would provide artists with fair compensation for the valuable creations they share with all of us.”

NAB’s Dennis Wharton responded, saying, “NAB strongly opposes Rep. Nadler’s draft bill, which fails to recognize the unparalleled promotional value of local radio airplay and which would kill jobs at America’s hometown radio stations. We continue to support private, company-by-company negotiations that are driven by the free market, as was reflected by the recent deal between Clear Channel and Big Machine Label Group. We’re pleased that 177 House members and 22 U.S. Senators agree that America’s local radio stations should not be subjected to job-killing performance tax legislation that would divert millions of dollars to offshore record labels.”

Nadler’s interim technique would be to have the Copyright Royalty Board take into account the value of airplay to broadcasters that is currently not subject to any royalties, and add it to what the CRB decides to charge broadcasters for internet streaming royalties. That would cease as soon as there is an over-air royalty in place.

Evening the playing field between satellite/cable and internet radio by subjection them all to the same rate is another facet of Nadler’s bill.

RBR-TVBR observation: We just called this a zombie issue the other day. No matter how strongly a bill is beaten down, a new version always seems to rise up and prowl the halls of Congress in due time.

The bad news about the royalty issue is that proponents of a radio royalty will be able to find support on the Republican side of the aisle. The good news is that opponents will find support on the Democratic side.

In short, this is yet another industry v. industry battle that transcends party lines. NAB and the recording industry will have to wage this battle vote by vote in all 535 congressional offices, apparently until the end of time, which is the average lifespan of a zombie.