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Editor’s Notebook: Radio, disaster relief, and performance royalties

radio towerInside Radio noted that a group of Nebraska radio stations has donated $5,000 to the Red Cross for disaster relief after storms ripped through parts of the state.

This sort of radio activism on behalf of local communities ties into traditional radio values of locality and community service. More particularly it resonates with recent arguments, in press releases and government hearings, against applying music-licensing performance royalties to broadcast radio. Charles Warfield of the National Association of Broadcasters (NAB) hit that point in this week’s Judiciary Committee hearing of music copyright arguments.

“Broadcasters serve our listeners in many beneficial and significant ways,” Warfield said in his testimony. “Radio broadcasters inform, educate, and alert listeners to important events, topics, and emergencies. […] The community-based nature of local broadcasting has driven our industry to extraordinary levels of public service.”

The NAB argument is, and has been, that radio stations are local small businesses that would be catastrophically burdened by a new cost item on their balance sheets — namely, the disputed royalty to labels and artists, which radio stations are exempted from in U.S. copyright law. Warfield even noted that the music-licensing cost of streaming inhibits radio from extending its service digitally:

“The current legal framework governing webcasting imposes obstacles on every corner of the music ecosystem that currently prevents our businesses from collectively serving the public good. Today, whether you are a large broadcaster or small broadcaster, the revenue that can be generated from streaming simply does not, and cannot, offset the costs – so many of our members simply do not do it.”

On the other side of the fence, where record labels reside, the argument positions radio as a gigantic music distribution entity that freeloads music which other listening platforms must pay for. The lack of parity is undeniable, and it is hard to disregard the competitive disadvantage faced by Internet radio. The debate focuses on whether the unevenness, which everyone can see, should or should not be remedied.

What will happen? Time will tell during this “Summer of Copyright.” But when an irresistible force (new platforms of music distribution and payment) meets an immovable object (radio and its decades-old role in community life and the music ecosystem), the outcome in law can usually be expressed in two words: status quo.

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Brad Hill

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