Many believe that establishment of a performance royalty for broadcast music has become inevitable, if only because the NAB has finally admitted that under the proper circumstances it would agree to such a thing after years of steadfast resistance. But it could still be a long time before the stars align to make a performance royalty a reality, and the orbit of three major organizations may have to pass through Congress.
The deal outlined by NAB and musicFirst roped in a third party, the consumer electronics industry, which to say the least was not pleased to suddenly become part of the performance rights controversy. The plank of agreement tying a royalty in part to the presence of an FM chip in cell phones was anything but readily agreed to by manufacturers, and indicated the need for congressional intervention, which the recording and broadcast industries agreed to push for over manufacturers’ objections.
The NAB’s new proposal, which tied the royalty rate to real-life radio/cell availability, took the royalty rate below 1% until certain levels of adoption are met. This has proven to be a non-starter with the music industry, which needs a 1% minimum to activate reciprocal non-domestic royalty payments from foreign broadcasters.
The Consumer Electronics Association has always been a sure bet to fight any radio-in-cell mandate on Capitol Hill, and the NAB’s new offer has musicFirst talking about returning to the Hill in pursuit of its goals.
According to an analyst from Stifel Nicolaus, the complexity of the issue makes it an unlikely candidate for any Congressional attention during the upcoming lame duck session, according to a report at politic.com. In fact, the complexity may well take more than one congress to sort out – meaning that this issue could be dragging on not for months but for years.
RBR-TVBR observation: The main thing that kept RIAA hopes alive during the 111th Congress was the presence of very helpful friends in the chairs of both congressional judiciary committees, which did not reflect the sentiments of the rank and file, in the House at least. The results of the midterms could change things a great deal.
It is impressive that the NAB was able to muster a strong majority of support for the broadcast position in the House when it was very much in control of Democrats. However, this was done without blanket support from the Republican Party, which includes many members who support the musicians in the industry-vs.-industry issue. It may be true, as many believe, that a Republican takeover of Capitol Hill on 11/2/10 will benefit broadcasters, it really isn’t a cut and dried matter.
The fact that it is morphing into an industry-vs.-industry-vs.-industry issue only adds another layer of complexity and another battalion of lobbyists into the mix.
You can never tell what’s cooking behind closed doors on Capitol Hill, but at this point it appears that this issue is effectively stalled.