Performance Royalty bill introduced in Congress


The long-threatened bill to force radio stations to pay royalties to record companies was introduced yesterday in both the House and the Senate. The “Performance Rights Act of 2007” was introduced in Senate by Judiciary Committee Chairman Patrick Leahy (D-VT) and Sen. Orrin Hatch (R-UT), a senior member and former chairman of the panel, and in the House by Rep. Howard Berman (D-CA), chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property, and House Judiciary Committee member Rep. Darrell Issa (R-CA).  Senate Judiciary Committee member Dianne Feinstein (D-CA) and Rep. John Conyers (D-MI), the chairman of the House Judiciary Committee are also co-sponsors of the measure.

Congressman Berman, who has been the point man for the Recording Association of America (RIAA) on the issue, declared on the House floor that “this narrowly tailored bill amends a glaring inequality in America’s copyright law” by making AM and FM stations pay for airing recorded music “just as satellite, cable and Internet radio stations currently do.” As in the past, he insisted that the point was to provide “fairness” for artists and musicians, rather than the multi-national record companies who stand to receive the overwhelming bulk of whatever cash is raised. In an attempt to soften opposition from Religious broadcasters and public radio stations, the bill provides that small broadcasters, defined as those with annual revenues of less than 1.25 million bucks, would pay a flat annual royalty fee of 5K. Non-commercial stations would pay only 1K annually. Other broadcasters would have to either negotiate performance royalty payments with the record companies or have them arbitrated by the Copyright Royalty Board – the same panel that adopted rates so high that they are threatening to bankrupt virtually all Internet radio operations.

As you would expect, the NAB quickly fired back at RIAA and its Capitol Hill allies. "After decades of Ebenezer Scrooge-like exploitation of countless artists, RIAA and the foreign-owned record labels are singing a new holiday jingle to offset their failing business model. NAB will aggressively oppose this brazen attempt to force America’s hometown radio stations to subsidize companies that have profited enormously through the free promotion provided by radio airplay," said NAB Executive Vice President Dennis Wharton in a statement sent to RBR last evening. He also noted that 119 House members have already signed onto a resolution opposing any new performance fee, tax, royalty or other charge on radio stations.

RBR observation: Berman is right about one thing, and only one, from his speech yesterday – there should be parity for AM, FM and Internet radio. To that end, Congress should revise the digital copyright law – which, after all, was supposed to be about digital downloads, not streaming – and stop RIAA from making Internet radio operators pay for the privilege of helping the record labels sell records.