Music Industry Tries To Take Back Its Money From The “Pirates” Running Radio

noah | June 27, 2008 10:00 am

Following a campaign that included mailing herring and a dictionary to their current nemeses in the terrestrial radio industry, a consortium of groups comprising record labels, songwriters, and musicians, had a small victory yesterday, when a House of Representatives subcommittee passed a bill that would require performance royalties being paid when songs are played anywhere on the AM/FM dial. A co-sponsor of the bill, Rep. Howard Berman (D-Calif.), didn’t go so far as to say that radio spins are tantamount to piracy, but he did profess skepticism about the medium’s promotional value, saying that there’s merely “a correlation, not causation” between being on a top-40 station’s playlist and music sales. But now that it’s come out of committee, will the bill make it out of the House?

“The approach we’ve taken to establish performance rights for musicians will provide broadcasters the opportunity to account for any promotional value they provide in the course of determining their royalty rate,” Berman said.

Under the bill, medium-sized stations would pay “a negotiated and arbitrated rate,” while smaller as well as noncommercial stations would pay a discounted rate, possibly even nothing.

The NAB remains unconvinced.

“Today’s vote comes as a complete nonsurprise given the House IP subcommittee’s history of support for the Recording Industry Assn. of America-backed tax on local radio stations,” said NAB exec veep Dennis Wharton. “Despite today’s action, there remains broad bipartisan resistance to the RIAA tax from members of Congress who question whether a punitive fee on America’s hometown radio stations should be used to bail out the failing business model of foreign-owned record labels.”

Wharton said 219 House members and 13 senators oppose a forced performance royalty

Framing this as a victory for musicians rings a bit hollow to me, since from what I understand the royalty will pay the entities who own copyrights on the songs, which in most major-label cases is–surprise!–the labels themselves. (Perhaps I should get in touch with members of those hard-rock bands who re-recorded their hit albums earlier this decade in order to own the copyrights on the performances of their songs for their perspective.) Me, I’m just waiting for the day that the labels start asking radio stations to repay all that payola cash–not to mention the “fruit and flowers”–they doled out over the years. That is when the real fun will begin.

House passes music royalty bill [Variety]

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