In your letter to The Honorable Nancy Pelosi dated May 14th, you note regarding H.R. 848 that “there is no corresponding examination by the House Energy and Commerce Committee of whether these stations should be compensated for the value of airplay and promotion they provide…”
Record label representatives have badgered radio stations since the late 1950s for increased exposure of their songs in the belief that increased airplay equates to increase music sales. In other words, a song played on a popular radio station serves as an effective advertisement not only for the particular song but also for the artist who performs it.
Should Congress pass the Performance Rights Act, it would seem reasonable that radio stations which have for decades provided these free advertisements as part of a symbiotic win/win arrangements with the music industry should be allowed to charge labels their :60 unit rate multiplied by each minute of a song’s length and for each time that the song is played. Consequently, if a song which is 3 minutes long were played 10 times between the hours of 6AM and 7PM, Monday-Friday on a station which normally charges $100/minute for an advertisement, the station would charge the record label $ 3,000.00.
Additionally, with the advent of SoundScan which geographically tracks unit sales, BDS which tracks a song’s “spins” by individual radio station, and Arbitron ratings which provides information about a station’s audience share, it should be relatively easy to create a formula which would allow radio stations to participate in revenues generated by music sales in their zip codes of dominant influence. Consequently, the radio station would be entitled to a share of a song’s revenue from sales in its market along with a fee for the advertising it provided.
This seems to be a reasonable proposal considering the impact that the Performance Rights Act will have on all radio broadcasters should it be passed by Congress.