Proposed Bill Would Force Radio Stations to Pay Record Labels

By Eliot Van Buskirk EmailDecember 18, 2007 | 6:57:36 PMCategories: Digital Music News  

Musicfirst MusicFIRST, an organization partially funded by SoundExchange, announced that its lobbying to get Congress to force AM and FM radio stations to pay record labels have paid off handsomely.

Senators Patrick Leahy (D-Vermont) and Orrin Hatch (R-Utah) joined Representatives Howard Berman (D-California) and Darrell Issa (R-California) in introducing a bill for the “Performance Rights Act of 2007” which would force U.S. radio stations to pay record labels for the right to play music over the air for the first time.

Stations with annual revenue under $1.25 million would owe $5K per year under the act, while small, non-commercial (educational, public, and religious stations) stations would owe $1K per year.  However, the rate owed by larger commercial stations would be determined by the same Copyright Royalty Board that set controversial per-song rates for webcasters and recently decided on a percentage rate for satellite radio.  The board would set rates on a per-program basis, and would presumably be paid through SoundExchange (formerly a division of the RIAA).

U.S. radio stations have never had to pay record labels and performing artists in the past, because the promotional value of radio was thought to compensate them fairly by increasing sales of albums and concert tickets.  Now that albums aren’t selling as well, the labels want to be paid directly by stations, whose promotional value — they claim — no longer exists.

Cathy Rought, a spokesperson for Free Radio, said if the bill passes, local communities will lose quality and diversity in radio, and that the tiered rates for small and non-commercial stations won’t stop that from happening:

“This bill, which was so long in the making, is drafted around exemptions and discounts, and the result is bad public policy.  Any fee — regardless of whether it’s discounted, tiered or reduced — will only serve as a foot in the door for the record labels to establish precedent for higher fees down the road.

“With copyright fees, history is pretty clear: rates will only continue to go up. If passed, this could threaten the survival of local radio stations, would reduce the quality of their programming and would almost certainly reduce diversity in radio.  This flies directly in the face of the goals that Congress and the FCC have set for our airwaves.”

One Response to “Proposed Bill Would Force Radio Stations to Pay Record Labels”

  1. […] I found another article on Take Country Back that goes into more depth regarding fee structures, etc.  I should have known – they are great […]

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