Bipartisan Senate group opposes performance tax


Members of the House of Representatives have been trying to throw a barricade before the attempt by the RIAA to collect performance royalties when music is played over the air, and now they’ve got necessary reinforcement in the Senate. Blanche Lincoln (D-AR) and Roger Wicker (R-MS) are leading a bipartisan effort to head off the performance tax movement. Wayne Allard (R-CO), Sam Brownback (R-KS), Lisa Murkowski (R-AK), Ben Nelson (D-NE) and James Webb (D-VA) have also signed onto the effort to pass Senate Resolution 82 “Supporting the Local Radio Freedom Act.”

After noting that Congress has repeatedly headed off attempts to interject a fee into what has been a mutually beneficial arrangement – content for broadcasters and promotion for musicians/labels, the Resolution states, "Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for such public performance of sound recordings."

RBR/TVBR observation: The labels were more than happy to get airplay in the days before the internet caught them napping and threw a serious monkey wrench into their business model. In fact, legend amply has it that they were more than willing to spend good money on murky under-the-table transactions in the chase for airplay.

The music industry is watching the marketing experiments of Trent Reznor and his Nine Inch Nails very closely right now as he navigates the new marketplace without the constrictions of a label. He can do this because he has built up an extremely loyal fan base over a long period – they seemingly will follow him anywhere. Most musicians don’t have that luxury, and the old-fashioned model – getting exposure via airplay – remains one of the few reliable ways to get music before a large group of receptive fans.

The labels should be encouraging the age-old symbiotic relationship with broadcasters, not trying to choke the last bit of life out of it. But given the way they’ve handled almost every challenge they’ve faced lately, it comes as no surprise that they would chase the wrong answer into a dead end that ultimately weakens their position even more.