RBR-TVBR Analysis
A Tennessee newspaper/website has an article out noting that negotiations between broadcasters and record companies over a performance royalty for radio airplay have stalled. It mistakenly suggests that perhaps hundreds of millions of dollars are at stake annually.
The article appeared in the Jackson Sun and on Tennessean.com, and said that the issue was of interest in Central Tennessee because of its high population of musicians, the individuals hoping to prosper as a result of PRA.
If the article took away the plural from its value remark, it would be on track. In fact, the GAO report said that a radio performance royalty would likely bring in $101M for performers and labels per 1% of radio revenue – and 1% was the target royalty that the NAB/musicFIRST proposal called for in the negotiated agreement.
One of the items NAB wants in return for the 1% royalty is the presence of FM radio on mobile devices. NAB has suggested downsizing the royalty at the outset of any agreement and bringing it along to 1% as mobile FM becomes available. If the NAB’s latest proposal would be part of an agreement (and the initial reaction from the music side suggests that it won’t), the royalty would kick off at 0.25% and increase to 1% from there.
If Tennessean.com is concerned about the welfare of the musicians who live in its service area, it should also note that the news from the GAO report is not all that encouraging. The performers who will substantially benefit from PRA are those at the very top of the sales charts. The study noted that 56% of musicians covered would receive less than $100 annually, and 95% would receive less than $10K.
While most individual musicians would not have the critical mass necessary to build a significant PRA payday, the labels have built that in for their own benefit – PRA hands over 50% of proceeds for the distributors, rather than the artists.
GAO tried but was unable to peg a dollar value to the promotion provided free of charge to musicians, but RBR-TVBR analysis of the GAO report showed an unmistakable link between the amount of airplay and the sales success of the music.
RBR-TVBR observation: If any movement is taking place in the positions on this issue staked out by stakeholders, it is moving at a glacial pace and cannot be detected with the naked eye. Barring a surprise appearance of a PRA plank on a piece of unrelated legislation, we expect the issue will continue to percolate until some time next year.
