One of the most intractable issues in music licensing is broadcast radio’s exemption from performance royalties to artists and labels for the use of recorded music. The exemption has the weight of history: It has always been so in the U.S., though not in most other countries with government-regulated music licensing. The situation’s rarity is not of concern to advocates of radio’s licensing privilege, who assert that radio’s traditional role in driving awareness, success, and sales of music performers is as vital today as ever.
Still, scrutiny of the law, and activism to change it, continue. In an effort to head off government action in that direction, the Local Radio Freedom Act (LRFA) was introduced in Congress on Tuesday. Supported by the National Association of Broadcasters (NAB), the act states that “Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings.”
With the introduction of the act, NAB issued a statement reaffirming its reasons for wanting it enacted. “Local radio’s unparalleled promotional value drives increased record and merchandise sales and sells out concert venues,” President and CEO Gordon Smith said. “NAB applauds lawmakers for standing with hometown broadcasters in opposing a job-killing performance royalty that would damage the No. 1 platform for exposing new music.”
The LRFA is being countered by the musicFIRST Coalition, which represents performing artists and their desire for broadcast revenue from airplay of their records. The group responded to the NAB statement with a range of arguments. A particular focus of the musicFIRST argument is whether radio stations can afford to pay a new royalty cost. the statement cites radio revenue figures from the Radio Advertising Bureau (RAB) and the government Accountability Office.
The fate of this new bill is unknown now, of course. The LRFA has its sponsors, and also congressional detractors lined up to urge non-adoption. This is a busy time for music copyright scrutiny. In addition to this issue, the Copyright Royalty Board is hearing arguments about new online radio statutory rates which will start next year, and state lawsuits around pre-1972 music (which is not protected) could prompt federal lawmakers to change that part of the U.S. Copyright Act.