US moves to ensure AM and FM radio pays to play

June 2009

Broadcasting, Music Publishing

The US has moved a step closer to ensuring artists get paid when their sound recordings are played on mainstream radio in the US when the the House Judiciary Committee approved a bill that would require ‘traditional’ AM and FM radio stations to pay artists for using their sound recordings. The Performance Rights Act cleared the committee by a vote of 21 to 9 and now moves to the full House for a vote. The committee also unanimously cleared the Webcasters Settlement Act, which deals with Internet music streaming. AM and FM radio stations currently pay nothing to performers (or their labels), arguing that exposure on their stations results in record sales for the artists featured. They do pay approximately $550 million in fees to songwriters each year, according to the National Association of Broadcasters (NAB). Internet radio stations, meanwhile, have been locked in a battle with copyright holders over how much they should pay to stream the same music over the Web, simultaneously complaining that their more established rivals have a distinct commercial advantage in avoiding payment for ‘needletime’. The Bill progressed after Committee Chair John Conyers offered a successful amendment to the Performance Rights Act Wednesday to create a tiered payment system based on revenue. Stations with annual revenues of less than $100,000 would pay a flat fee of $500 each year. Stations with revenues between $100,000 and $500,000 would pay $2,500, and those earning between $500,000 and $1.25 million would pay $5,000 annually. Stations making any more than that each year would have to negotiate royalty payments with the Copyright Royalty Board (CRB), a government body that sets royalty rates. Stations that gross less than $5 million per year would not be subject to these fees for three years, and stations making more than $5 million would not have to pay for one year.,2817,2347030,00.asp

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