Record label denounces potential Performance Royalty deal


That’s right; an independent record label has come out in opposition to the potential settlement between the NAB and musicFirst, which is aligned with the major record labels. Independent label Savannah Music Group says the deal being negotiated would be bad for its recording artists.

Noting the terms of the tentative deal, Savannah Music Group (SMG) and its subsidiary Savannah Records are calling for Congress to add an opt-out clause to allow radio stations to play the music of new and independent labels without additional payment to musicians and record labels. Savannah notes that its proposal would leave intact existing writers’ and publishers’ royalties (those already paid to ASCAP, BMI and SESAC).

“Historically, radio stations have not been obligated to pay record companies or artists because of the promotional value of airplay,” the label noted. But it suggested that the National Association of Broadcasters (NAB) caved under pressure from Congress to strike a deal with the big labels.

“This capitulation is a disaster not only for radio, but for independent artists, independent record labels and songwriters as well,” said Jeff Cohen, co-founder and CEO of SMG.

“I understand the politics of the NAB wanting to get ahead of a Congressional steamroller, but there is no sense in flattening all the independents and creative shops in the process,” said Dave Gibson, president and creative head of Savannah.”

Why does Savannah oppose the PRA deal, since its artists – and indeed the record label itself – would presumably share in the 1% royalty fee collected from radio stations, based on the amount of airplay they receive? The independent label fears its existing airplay would shrink considerably.

“In public hearings, the radio industry has testified that a performance royalty will result in fewer stations playing music, and airplay being concentrated on already established artists. While this may benefit major, multi-national record companies, it will make things more difficult for new music and new artists to get the radio exposure they need to be successful, and thereby put small companies like Savannah and its artists at a disadvantage,” the company said of its opposition.

“We are grateful for the support that radio has given Savannah’s music and artists. The possibility of losing music formats on radio would hurt both artists and musicians,” said Laurie Spoon, vice president of Savannah Records. “Should a performance royalty be mandated by Congress, artists and labels must have the opportunity to opt out. If not, the major record labels win, and the songwriters and artists lose.”

RBR-TVBR observation: Interesting, but how would an opt-out work in a royalty system based on a percentage of total revenues? A music-based radio station would have to play only music by artists on independent labels that have opted out of the Performance Royalty plan to be able to save any money.

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Record label denounces potential Performance Royalty deal

How we got to this point on Performance Royalties