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Even though the Blackburn sponsored royalty bill is less than 24 hours old, broadcasters are quickly going on the record in objection. Southern California Broadcasters Association President Thomas Callahan tells Radio Ink, Blackburn's bill is misguided on multiple levels. "Radio builds recording artists careers and sells their music by simply playing it on Radio." Ohio Association of Broadcasters President Christine Merritt says, "The notion of connecting retransmission consent agreements and the performance tax issue seems incongruous." And, of course, the NAB was fast to react, objecting to the proposal for a new tax on radio stations.
The NAB statement following the introduction of the new Royalty bill comes from NAB Executive Vice President of Communications Dennis Wharton: "NAB is concerned that this legislation would devalue local broadcasting. Every day across America, local radio and TV provides a positive, competitive balance to national pay radio and TV giants. Local stations offer news, entertainment, and emergency warnings that make the difference between life and death. NAB will respectfully oppose this legislation. In addition, reporters might find of interest that broadcasters pay approximately $500 million a year to compensate songwriters for music we play on the radio; radio stations also pay millions a year to the record labels and recording artists for music that we stream on digital platforms."
Callahan says, the Radio industry pays billions every year to ASCAP, BMI, SESAC for the fair compensation of the creators of the music it plays. "Why should it have to pay performers as well? Second: Radio builds recording artists careers and sells their music by simply playing it on Radio. No other medium does that and yet Radio is not paid a fee by the artists it establishes for the free exposure Radio provides. Congress understands that fundamental fact and that's why this issue has not been raised before. And finally, This so called "performance tax" would be an immediate job killer as the fees extracted would cripple an industry just getting back on its feet."
Merritt makes the point that connecting these Television payments with Royalty fees on radio really doesn't make much sense. "The retransmission consent system provides a mechanism for pay TV providers to include local TV signals in the lineup of stations they provide for a fee to their subscribers. Local broadcast stations are among the most viewed stations in any pay TV lineup and should be fairly compensated for rebroadcast of their free over-the-air signal. Local radio stations air music and programming at no cost to their listeners. The recording industry?s effort to impose a performance royalty on local radio stations ignores the fact that these companies and artists receive tremendous promotional value from airplay on local stations. Listeners learn about new music from local radio stations, and countless awards programs have included artists thanking local stations for playing their songs."
Wharton adds, "The promotional value of free and local radio airplay to artists and record labels is between $1.5 billion and $2.4 billion annually, according to James Dertouzos, a former PhD Stanford economist."
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