Both sides testify on Performance Royalties
A hearing was held yesterday on the proposed Performance Royalty fees. For the full recap, click here.
The NHAB view:
This proposed fee was instituted by the record companies – not artists, who underestimated the power of digital downloading and are now suffering. They need to reinvent themselves, NOT fee the radio industry for their failures. This is not about the record artists needing money. This is a blatant, quick fix attempt by the four major labels (three of which are operated by giant international conglomerates) operating the RIAA to hold up the radio industry for a bailout. In fact, artists and background musicians or singers would likely receive a fraction of these fees.
The recording industry wants to charge local radio broadcasters who provide America’s communities free entertainment, information and emergency service. In this current economic climate, this fee would devastate hundreds of small market stations (many locally owned) forcing them to cut back on staffing and in turn community service.
Larger market stations would stop playing or promoting new releases unless the record companies bought the airtime they are accustomed to for exposure. Record labels and artists have benefited from the free radio airplay and on-air interviews, in many cases timed to coincide with concert appearances in the station’s coverage area.
A performance fee would radically upset the time tested, delicate balance that has worked for over 50 years for record labels, artists and radio stations. Performer’s famous careers have been built and pop music culture as we know it, are creations of this successful, symbiotic relationship between artists, radio and listeners. Without it, the American music industry would not have thrived and grown as it has. This penalty would ruin most chances any new artist has at exposure, the key to growing popularity and financial reward. Furthermore, this plan will backfire on the artists because radio stations will now have a financial incentive to NOT play their music.
Performers who compose now receive payments from radio stations via BMI, ASCAP, SESAC. Performers also enjoy huge incomes from touring, record sales, merchandising, TV appearances, etc. Historically, composers do not have these opportunities to make money as performers do; justifying the current royalty payments. It is composer’s creativity that made records possible and they have been compensated accordingly by radio.
Entertainment businesses that air pre-recorded music for their patrons such as sports stadiums, hotels, restaurants and other venues would also feel the onerous affects of this fee.
Congress has long recognized value in free radio promotion and airplay enjoyed by record labels and recording artists and should continue to do so.
Tags: Peformance Royalty Tax New Hampshire Association of Broadcasters
