Holiday Hostility Over Music Royalties
A group of music industry interests that lobbied Congress this year to end a longstanding royalty exemption afforded to AM and FM stations sent broadcasters a holiday message Wednesday: "Radio, don't be a Scrooge." MusicFIRST coalition executive director Jennifer Bendall asked radio stations in a press release to "join us in creating a performance right on radio that is fair to artists and musicians." Stakeholders expect the issue to be a prominent one in the House and Senate Judiciary Committees in 2009 -- and if this flare-up is any indication, the gloves are coming off.
Holiday music can be found on nearly every music radio station, and although each artist's version is unique, they all have one thing in common: When their seasonal jingle (or any other performance) is played on AM and FM, the artist is not compensated, the coalition explained. Broadcasters, however, argue that the existing model serves the music industry by promoting artists over their airwaves. Terrestrial radio is the only platform that is exempt from the royalty -- satellite and Internet radio as well as cable TV pay.
The musicFirst message was sent on the heels of a flyer circulated on Capitol Hill by the Free Radio Alliance that had the tag line: "The Grinch that tried to steal free radio." The one-pager argues the "free play for free promotion" system has worked well but "big, foreign-owned record companies... haven't kept up with the times and are losing the fight to iTunes, Internet and satellite radio." "Now, they are being Grinches and asking Congress to tax local radio stations to subsidize their failing business model," the document states.
Senate Judiciary Chairman Patrick Leahy and House Judiciary Courts, the Internet and Intellectual Property Subcommittee Howard Berman, D-Calif., sponsored legislation this session to lift the exemption and Texas Reps. Gene Green, a Democrat, and Mike Conaway, a Republican, sponsored a resolution in opposition.
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