Spearheaded by Rep. Marsha Blackburn of Tennessee, the bill spins a cagey framework by putting radio stations on the same place in the delivery chain as cable companies which pay for the transmission of shows provided by production companies. Here’s the reasoning: If cable companies must pay for re-transmitting content produced elsewhere, why shouldn’t radio stations pay for content produced by labels?
An RIAA spokesperson commented: “This bill cleverly exposes the hypocrisy of the broadcasters who argue they should be paid when their content is broadcast while simultaneously refusing to pay artists and labels when they broadcast their music.”
The counter-argument is that cable companies charge subscription prices to fund the cost of content, and radio is a free medium.
However this legislation plays out, the assault on radio over its performance royalty exemption continues. The glaring inequity that troubles many observers lies in the fact that online radio services like Pandora and iTunes Radio must pay those royalties. Many observers think the broadcast exemption, established decades ago, is outdated, and that there is little material difference between broadcast listening and streaming listening.
Two weeks ago a majority in the House signed a resolution to continue radio’s performance royalty exemption. the National Association of Broadcasters (NAB) cheered the resolution, and decried a performance royalty as a “tax” that would harm local business.