The latest broadcaster to give his take on the potential Performance Rights Act resolution by the NAB and musicFirst is Peter Smyth, CEO of Greater Media. He doesn’t want to pay the record labels anything, but notes that $100 million a year looks more attractive than $2 billion.
“Don’t get me wrong: I hate the idea of taxes, royalties, fees or whatever you want to call new payments that might go to record labels and artists. I don’t want our company to pay a 1% net revenue fee for the “privilege” of promoting artists and their music. But when you move beyond the rhetoric and look closely at the proposed terms that are under discussion, it seems clear: The conceptual framework provided by NAB’s leadership team is something that the leaders and owners in this great business should seriously consider,” Smyth said in his monthly commentary on the Greater Media website and distributed to the trade press.
According to Smyth, the biggest “get” from the proposed settlement terms is keeping the “onerous and unpredictable” Copyright Royalty Board (CRB) out of any rate setting authority. Under PRA, as passed by the House and Senate Judiciary Committees (but blocked from any floor vote) the Greater Media CEO notes that Wells Fargo Securities analyst Marci Ryvicker has estimated that CRB might set rates high enough to cost broadcasters $2 billion per year.
“In addition, the NAB framework includes plenty of other potential benefits for radio. Any agreement would be conditioned on settlement of AFTRA issues that have prevented many stations from streaming commercials, and prevented Arbitron from including our streaming audiences in the ratings. Moreover, radio’s reach could be expanded through the incorporation of radio receivers in mobile phones under terms that are being discussed,” Smyth noted.
So, as much as he doesn’t want a royalty fee, Smyth urges broadcasters not to reject out-of-hand a compromise with the record industry.
“There may come a day – maybe not this year, and maybe not next year, but in the foreseeable future – when Congress moves forward and legislates a performance tax of 5% or more on radio revenues. If that happens, my guess is that our peers of tomorrow will judge quite harshly a decision to pass up the opportunity that presents itself today,” Smyth concluded.