Terrestrial radio does not have to pay music royalties, and they want to keep it that way. There are two competing bills that are on the table in Washington. One maintains the current no royalty status, and the other seeks to establish royalties.
This is a battle that has been going on for quite some time, and at stake is the business model of terrestrial radio, the livelihood of music performers, and the profits of the record labels themselves. This is a classic case of not really knowing who to root for. On one hand, there should be a level playing field regarding royalties for terrestrial, satellite, and Internet radio. On the other hand, the record companies have been virtual fat cats for quite some time. Suffering in the fringe are performers who receive very little money for the broadcasts of their performances.
If nothing else, the current condition of the economy points to the NAB backed bill having a decent shot of being the victor in this battle. The NAB bill already boasts 192 supports, a substantial lead vs. the musicFirst backed legislation.
In response to the recent news of the Judiciary Committee passing a revised version of the musicFirst supported legislation, the NAB's Dennis Wharton stated:
"We were pleasantly surprised by the considerable bipartisan opposition to a performance tax, even in a committee where support for the record labels is strongest. NAB applauds these nine members for standing with America's hometown radio stations, their 235 million weekly listeners, and the yet-to-break artists who will lose their number one promotional platform if this bill is enacted.
"Nearly half the House of Representatives already opposes RIAA efforts to feather the nest of foreign record labels. Record label abuse of artists from Count Basie to Prince is well-documented, as evidenced by scores of lawsuits filed by musicians cheated out of royalties. Moving forward, the fundamental question is this: If the debate is about 'fairness to artists', why should the record labels get one penny from a performance tax on radio stations?"
Thus the battle lines have been drawn. The NAB strategy is quite interesting. They are painting the record labels as the potential recipients of "pork". Given the climate in Washington, and all of the ire about "pork laden" legislation, it may not be popular to approve a bill that benefits the record companies.
The debate will rage on, but as one SiriusBuzz reader stated, "...it is a race to 218 votes and the NAB backed bill has 192 of them already." (Thank You Homer). The reality is that there are legitimate arguments on each side of the issue. Those arguments will be played out over the coming months, and in the end it is my opinion that the NAB backed legislation currently has the advantage. The best way to learn about this issue... Visit musicFirst and the NAB sites.
Position: Long Sirius XM