"Hollywood's Congressman" Howard Berman, chairman of the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property passed a bill today that would require radio station's to pay a royalty on every record they play to the record companies. The bill passed by voice vote, but opponents say the unanimous decision by the committee won't be matched in the full committee and the House. The NAB, which is in a fierce battle against the royalties has secured enough votes to the bill should it come to the floor, which is not likely this year. The bill caps at $5,000 a fee for the smallest broadcasters, but larger companies would pay much more. With 13,000 radio stations in the U.S. it would be a huge windfall for the record companies. Four of the "big five" companies are foreign owned. It also comes at a time, when radio station revenues are declining each month. With competiton from satellite radio, the internet in general and mobile music players such as the iPod, radio is in a whole other battle for advertising dollars. The NAB has pointed to the value that the record companies get from the exposure on their stations, comparing it to advertising for other products. But, while the record companies reject that argument, they continue to spend millions of dollars each year in promotion to radio stations to get them to air their product...particulary as it has to do with new artists. Accoriding to CNN Money this morning, "Berman made a plea to NAB to bend from that position. 'The broadcasters have refused to acknowledge that there may be a sum above zero that they are willing to pay,' he said, adding that he would 'love to have a discussion' with the broadcasters about a reasonable payment.
The full judiciary committee will now take up the performance issue and it is expected to meet strong opposition there. Berman says before the full committee votes he wants to tweak the bill so it does not appear that the smallest radio stations would be hit too hard.
Meanwhile, after this morning's vote the NAB issued this statement to New Radio Star
NAB STATEMENT ON TODAY'S
SUBCOMMITTEE MARKUP VOTE
WASHINGTON, DC -- Following today's vote in the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property, NAB Executive Vice President Dennis Wharton released the following statement.
"Today's vote comes as a complete non-surprise, given the House IP Subcommittee's history of support for the RIAA-backed tax on local radio stations. Despite today's action, there remains broad bipartisan resistance to the RIAA tax from members of Congress who question whether a punitive fee on America's hometown radio stations should be used to bail out the failing business model of foreign-owned record labels."
Yesterday, Reps. Gene Green (D-TX) and Mike Conaway (R-TX) circulated a letter to colleagues noting the momentum for the Local Radio Freedom Act, which staunchly opposes a performance tax. The letter, which urges additional support for the resolution, cites the official co-sponsor count according to the Library of Congress, 221, a figure that includes 219 active members of House of Representatives (Reps. Roger Wicker and Al Wynn no longer serve in the House).
A companion resolution, S. Con. Res. 82, has been introduced in the Senate and is supported by 13 senators.
"Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for such public performance of sound recordings," reads the Local Radio Freedom Act.
