Barrasso: ‘Performance Rights Act would devastate the local radio broadcasting system’
Senate bill S. 379 would require radio stations to pay fees to play music
October 27, 2009
Recently, U.S. Senator John Barrasso (R-WY) and Senator Blanche Lincoln (D-AR) sent a letter to Harry Reid and Mitch McConnell of the United States Senate expressing concerns over Senate bill S. 379, the "Performance Rights Act," which was voted out of the Judiciary Committee on October 15th.
The proposed legislation is described as "A bill to provide fair compensation to artists for use of their sound recordings." It was introduced by Senator Patrick Leahy [D-VT] and has six co-sponsors. Currently, American radio stations do not have to make royalty payments to performing artists in order to play songs. Proponents are attempting to make radio stations pay a flat annual fee which would be distributed to recording studios as royalty payments. The fee would be prorated based on the radio stations annual income.
Below is the text of the letter:
"Dear Leaders Reid and McConnell:
We are writing to you to raise our concerns regarding S. 379, the "Performance Rights Act," which was voted out of the Judiciary Committee yesterday. This bill would require local radio stations to pay the recording industry for the music that is provided to local listeners free of charge. By many estimations, passage of this legislation would result in potentially billions of dollars flowing from local broadcasters to the recording industry and would have a devastating impact on the local radio broadcasting system as we know it.
As you know, throughout our country, businesses are struggling to navigate volatile economic waters. This is especially true with regard to local over-the-air radio stations, which have been hit by both long-term systemic declines in revenue and an even more dramatic pull back in advertising dollars as a result of the current economic environment. 'The results are chilling. Over 265 stations have gone off the air in just over a year. Thousands of jobs within the radio industry have been lost, and a number of broadcast owners (from small single stations to large radio companies) are teetering on the verge of bankruptcy. The economic challenges facing the radio industry are daunting, but an even graver threat to free radio's future is currently being pushed in the form of new performance fees levied by S. 379.
We believe that artists and their labels are currently more than fairly compensated by local radio stations in the form of free and unparalleled promotion. Free radio reaches over 235 million potential music consumers each week. These listeners hear a song on the radio and then go on to purchase CDs and music downloads, buy concert tickets, and purchase other merchandise that goes directly to the artists and their labels. Without radio exposure, there would be far less music consumption in this country. In fact, a recent economic study found that radio airplay done generates up to $2.4 billion in music sales annually. It is for this reason that the recording industry spends untold millions of dollars simply to promote their music to radio stations in the hope of securing airplay.
The system currently in place works to the benefit of both the recording industry and local radio stations. Radio receives free use of music which is broadcast to the public free of charge. Similarly, through radio airplay, the recording industry receives free "advertising" of its music on a level that cannot be matched by any other platform. If this fee is levied against local radio stations, it would turn a mutually beneficial partnership into an unfair where radio stations pay the labels for the privilege of promoting their songs.
Imposing this fee on local broadcasters would fundamentally change free radio. Simple economics would dictate that many more stations would be forced out of business. More and more stations would likely switch to cheaper talk radio formats. And those stations that do continue to play music would inevitably focus on more streamlined play lists that feature only the most proven artists. At the end of the day, this will result in less music being played on the radio. Further, should this fee be imposed on free radio, it is only a matter of time before other businesses such as restaurants, bars, taxi cabs and hotels are forced to pay for their use of music. This legislation is not in the interest of local radio stations, local listeners, local communities, and ironically, it's not in the interest of most artists who would lose their best opportunity to get their music out to the public.
Finally, thousands of local radio stations are located in disaster-prone states, where the reliance on locaI radio can literally be a life-saving matter because radio stations serve as a "first responder" in times of emergency. Weakening local radio stations could impact the ability to respond during the all-too-often natural disasters and national emergencies which ultimately harms local listeners and their local communities.
Without such a performance fee, the United States remains the music capital of the world, and Americans enjoy a radio broadcasting system that is second to none. We want to protect America's dominance in both music and radio broadcasting, and that is why we have introduced S. Con. Res, 14, which rejects the introduction of a performance fee on free radio. We are pleased to have the support of 24 bi-partisan Senators as co-sponsors to our resolution, A similar resolution in the House (H. Con. Res. 49) enjoys support from 251 cosponsors, well over a majority of that body's membership. It is this same sentiment that has generated well over 100,000 letters to Congress from local radio listeners opposing the performance fee.
This legislation clearly evokes strong opposition that transcends party affiliation. As leaders of our two parties, we ask that you oppose any effort to move this bill, either as a stand alone measure or as part of a broader legislative package."