The Performance Royalties Act

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This is Celia Hirschman with On the Beat for KCRW.

A Washingtonian dog fight is nothing new. Today the radio industry is embroiled in a political argument with the record business. The argument is over performance royalties on terrestrial, or land-based, radio. In the past, the debate on this subject was limited to the music industry and the politicians attached to it.

The issue at hand is the Performance Royalties Act, and it is currently waiting for a vote before Congress. The bill would force terrestrial radio to pay royalties to the performers of the songs they air. Traditionally terrestrial radio has been exempt from paying this fee because in the past, it was understood that the promotional value of being played on the radio was worth more than collecting royalties. But times have changed and the argument that radio airplay sells a lot of records is no longer realistic, so performers and labels are rightfully asking to be compensated for their work.

The two groups fighting this political battle are the National Association of Broadcasters, or the NAB, who is staunchly opposed to the Performance Royalties Act, and MusicFIRST, who represent tens of thousands of artists and labels. The NAB has garnered quite a bit of support in Washington, and been able to thwart the progress of the bill thus far; but with so much at stake, they've taken their fight to the streets and appealed to the public.

They've just released a television ad that exaggerates and misrepresents the facts. Here's the text of the NAB 30-second TV spot:

"We've always found great new music on radio. But big record companies want a new tax on music that's played on local radio. The Performance Tax. The station you listen to could go out of business. That means lost jobs, no new music on the radio, and millions to record companies owned by foreign corporations. Tell Congress, stand up for free radio. Stop the Performance Tax."

Let me outline the misrepresentations in this spot. The ad mislabels the performance bill as a "performance tax," which it clearly is not. The money collected is a royalty payment, owed to the artists and labels. The ad goes on to claim local radio stations will go out of business if they are forced to pay performers their royalties. In reality, the performance bill has a tiered payment system built in to help accommodate stations large and small, including public radio stations like KCRW. The ad ignores key facts that undermine its argument, such as that the United States is the only industrialized country in the world that doesn't pay performance royalties to artists on terrestrial radio. Add to that, every other form of radio in America, including satellite, Internet and cable, pay royalties to performers. Terrestrial radio is the only form of radio that has been exempt from paying a performance royalty. Finally, the ad underscores a xenophobic hysteria, saying millions would go to record companies owned by foreign corporations. The Performance Royalty Act is to pay the artists and labels whose music radio plays. If the artists or labels are based outside the US, does that mean we shouldn't pay them?

MusicFIRST, the coalition of artist and labels who support the Performance Royalty bill have reacted to the ad by sending a letter to every member of Congress appealing to the common sense of the bill. In their letter they ask, "Is there any legitimate reason why broadcasters should be able to build a business using our music without our being paid or at least having the right to say ‘no thanks?'"

It's a legitimate question that demands a fair and balanced discussion, not one that is loaded with fear mongering and lies.

This is Celia Hirschman with On the Beat for KCRW.