NAB: House majority opposes new performers royalty

June 3, 2009 By RYAN NAKASHIMA , AP Business Writer

(AP) -- The National Association of Broadcasters said Wednesday that a majority of U.S. House members are now opposed to imposing new fees on radio stations to pay performance artists.

The NAB said 220 House members have agreed to co-sponsor a nonbinding resolution against any new fees. That's a slight majority in the House, indicating there is not enough support for a bill that would collect such fees.

Such a bill passed the House Judiciary Committee last month, but the NAB hopes the show of opposition will prevent it from being brought to the House floor for a debate and vote.

"The members of Congress just simply aren't buying the argument that radio stations ought to be taxed to make up for the struggling business model of the record labels," NAB spokesman Dennis Wharton said.

Music companies aren't giving up.

"They call it a nonbinding resolution for a reason - it's nonbinding," said Martin Machowsky, a spokesman for the recording industry-backed lobby group, the musicFirst Coalition. "We're confident that as members become acquainted with the accommodations in the bill, there will be ample support to create a performance right on radio for American artists and musicians."

Over the last several decades, broadcasters have successfully stopped attempts by the recording industry to require radio stations to pay artists for playing their music.

Stations have been exempt from such royalties on grounds that radio airplay offers artists a promotional benefit for CD sales and concert tickets. But CD sales have been plummeting because of digital downloads and piracy, prompting artists to seek new sources of revenue.

Songwriters have been paid for radio airplay since the advent of radio in the 1920s. In the late 1990s, the recording industry won the right to collect royalties for performers when songs are played on satellite, Internet and cable radio.

If the music industry succeeds in requiring new fees for traditional radio airplay, performance artists could be sharing hundreds of millions a year. Such a move also would unlock an estimated $70 million to $100 million per year that is collected by radio stations abroad for U.S. artists, but never paid out because U.S. stations don't pay foreign artists in return.

Larger stations would begin paying royalties as a percentage of ad revenue a year after passage. Others would begin paying two years after that. The actual rate likely would be set by the federal Copyright Royalty Board.

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