It’s not binding legislation. The Local Radio Freedom Act is a resolution bill which declares support among House Representatives in D.C. for opposing a performance royalty levied on American radio. As of this week, with the addition of 12 new signatures, the current House of Representatives is not majority aligned against a royalty.
This issue has been a key lobbying effort for the national Association of Broadcasters (NAB) for over 10 years. American radio is unique in the developed world in its exclusion from royalties to the recording industry. Broadcast radio does pay royalties to songwriters and publishers — the other half of the bifurcated ownership structure in music.
Owners of music masters (record labels of all sizes) do receive royalties from streaming outlets including internet radio stations and from the streamed versions of broadcast stations. Those royalty amounts are determined by a complex procedure regulated by the Copyright Royalty Board of the federal government, and administered by SoundExchange on behalf of the labels. That contingent of the industry feels unfairly disadvantaged by the unequal treatment compared to AM/FM radio’s exemption. American commercial radio is roughly a $17-billion dollar industry.
This statement is from NAB CEO Gordon Smith: “NAB greatly appreciates the bipartisan coalition of Representatives and Senators who have declared their support for hometown radio stations by cosponsoring the Local Radio Freedom Act. A performance royalty would inhibit musicians’ exposure on free and local radio, hurt stations’ ability to serve their communities, and damage the long-standing relationship between broadcasters and the recording industry. In these difficult times for all businesses, radio broadcasters thank lawmakers for opposing a job-killing performance royalty and look forward to continuing to provide unparalleled promotional value for new and established performing artists.”
NAB arguments have for years used the work “tax” to define the music royalty. That is on the face of it inaccurate, but after decades of exemption, application of a royalty would feel like a tax.
On the other side of the fence sits musicFIRST, an advocacy group speaking for labels and musicians. Kara Ferguson, Director of that organization, sent RAIN a few statements which argue against the concept of “local radio” which is key to the NAB’s appeal to congress.
“While the National Association of Broadcasters (NAB) talks about “local” radio, American radio is dominated by a handful of billion dollar companies who own and operate a majority of stations across the nation. Most “local” stations are actually owned by large conglomerates, which for years have been homogenizing content and cutting costs by firing local talent. These large broadcasters also happen to be the NAB’s largest members.” (Allison Fastow, spokesperson)
The new signees represent an eye-popping degree of bipartisanship. Following are the owners of this week’s new signatures:
Michael Burgess (R-TX-26), Danny Davis (D-IL-7), Mike Garcia (R-CA-25), Chris Jacobs (R-NY-27), Ben McAdams (D-UT-4), Michael McCaul (R-TX-10), John Moolenaar (R-MI-4), Bill Pascrell (D-NJ-9), Brad Schneider (D-IL-10), Kurt Schrader (D-OR-5), Mikie Sherrill (D-NJ-11), Thomas Tiffany (R-WI-7).
And here is the remainder of musicFIRST’s statement:
“Rather than paying music creators for their work as streaming services and broadcasters overseas do, the NAB has spent more than $15 million dollars on lobbyists to get Big Radio’s interests heard on Capitol Hill, including on this misleading anti-worker resolution. That’s more than twice the amount that small U.S. broadcasters would have to pay in royalities under the small business licensing caps in the bipartisan Ask Musicians for Music (AM/FM) Act.
“Big Radio is big business. The NAB has shown that they are willing to spend and to say anything to prevent large broadcasters from having to pay artists for the right to play their recordings on terrestrial radio. By following the money and seeing who the NAB really represents, we’re confident that Congress will see through their smokescreen and do right for American music creators.”