MusicFirst threat needs immediate feedback


RBR-TVBR Exclusive
Andy Skotdal, President/GM of S-R Broadcasting’s KRKO-AM, Everett-Seattle, WA, is the NAB Radio Board representative for Washington and Oregon. He’s asking NAB members to submit comments on the Radio Music Performance Royalty issue (The Performance Rights Act, PRA) in Congress by Monday, 2/7.
Seems while the performance tax still looks unlikely to pass, MusicFirst has told NAB that they now intend to challenge as many radio station license renewals as possible, sue stations streaming illegally through local AFTRA chapters, and block any legislation broadcasters intend to propose in Congress that could benefit them.

From Skotdal’s email:
“This week, the NAB Board of Directors met in Washington, D.C.  I attended the meetings and returned last night.  One of the issues requiring immediate attention is how we address MusicFirst going forward and I am soliciting your feedback for a response to NAB leadership by Monday, February 7th.

“It is unlikely that MusicFirst will be able to get performance tax legislation as far through Congress this year, and they’ve acknowledged the performance tax is unlikely to pass for now.  The mixed Congress and upcoming election year mean that other priorities will take precedence.  However, MusicFirst indicated to NAB leadership that they now intend to challenge as many radio station license renewals as possible, sue stations streaming illegally through local AFTRA chapters, and block any legislation we intend to propose in Congress that could benefit broadcasters.  While the merits of these threats and the scale with which they may occur are debatable, NAB leadership has asked the board for a sense of direction with respect to the future of the performance tax and our approach to MusicFirst for 2011.

“Some of the options available to the NAB are to:  1. Hold on an approach until we have a better sense of the 2011 MusicFirst strategy which will emerge from their board meetings that will occur just before the Grammy Awards, 2. We can choose to disengage completely from any discussions with MusicFirst based on their threats to attack our membership, or 3. We can continue to pursue a resolution that effectively ends having to deal with the performance tax issue based on the terms that have been provided to you previously.

“A piece of good news in all of this, the Copyright Royalty Board has been paying attention to this battle.  A CRB representative has acknowledged that they “went too far” in setting streaming rates, and the representative stated the term sheet that circulated to you and to the press adds downward rate pressure to the next round of streaming review.  Please let me know by Monday how you believe we should proceed and I will relay the will of the district to NAB leadership.

“Thank you for participating in this process. Please respond to Andy directly at [gives email address].

“Andrew Skotdal, District 25 Representative, NAB Radio Board”

On Saturday RBR-TVBR contacted NAB EVP/Communications Dennis Wharton who declined comment.

RBR-TVBR observation: Obviously MusicFirst is now acting out of desperation. Many broadcasters objected to NAB’s Term Sheet offer in the first place, and those who were willing to put a 1% performance royalty in place had to get something tangible back. That something was a radio presence on cell phones. Since manufacturers aren’t exactly welcoming that prospect with open arms, NAB suggested a sliding royalty that starts at 0.25% and grows to 1% as the percentage of mobile devices capable of tuning radio increases.

If Skotdal is right and PRA is dead in the water for the next two years, a MusicFirst campaign of harassment strategy strikes us as a curious choice. On the license challenge side, broadcasters are overwhelmingly capable of protecting their licenses, and the FCC is not keen on having its resources wasted on frivolous petitions. MusicFirst can make the threat, but we don’t see it leading anywhere but eventual embarrassment for MusicFirst itseslf.

The concept as presented just doesn’t appear to chart a path that will take MusicFirst where it wants to get. For that reason, if we were calling the shots, we’d be sitting tight and keeping our powder dry until we learn more about the organization’s intentions.

Please email your comments to your NAB Board Member ASAP. And don’t be afraid to share them with the rest of us in that comment area just below this article.