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Pay to Play

Broadcasters Fight House Bill Requiring Song Royalty Payments

WASHINGTON (Dow Jones)--Broadcasters are vowing to fight legislation requiring radio stations to pay royalties to performers, even as the recording industry and artist coalitions say the effort is gathering steam.

The House Judiciary Committee on Wednesday passed a modified version of a performance royalty bill that gives some exemptions to small broadcast stations.

Broadcast radio stations now pay song royalties to songwriters and producers, but they don't pay performance fees for playing the artists' music.

In contrast, cable, satellite, and Internet radio pay performance royalties.

Under the House bill, the smallest radio stations - $100,000 in revenue or less - would only pay $500 a year for the rights to broadcast recorded music. Stations with $100,000 to $500,000 in revenue would pay $2,500 a year. Royalty payments would be $5,000 annually for mid-sized stations, with $500,000 to $1.25 million in annual revenue.

Large radio companies like Clear Channel Outdoor Holdings Inc. (CCO) and Cox Radio Inc. (CXR) would be required to pay negotiated royalties to performers for playing their music on the air.

Broadcasters have mounted an intense lobbying campaign against the bill. They argue that airing artists' music gives the performers the necessary promotion they need to sell their records.

The National Association of Broadcasters has garnered 192 House sponsors to a nonbinding resolution opposing a new performance royalty for radio, short of the 200-plus they had in the last Congress.

It takes 218 votes in the House to block a bill, and NAB is hoping House Speaker Nancy Pelosi, D-Calif., will be reluctant to bring the performance royalty bill to the floor if she isn't certain it will pass.


But supporters - the Recording Industry Association of America and the American Federation of Television and Radio Artists among them - note that the bill has several high-powered supporters, including House Judiciary Committee Chairman John Conyers, D-Mich., and House Foreign Affairs Committee Chairman Howard Berman, D-Calif.