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Thursday, February 26, 2015




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No “immediate threat” seen on radio royalty.


There’s no immediate danger of radio being slammed with an on-air performance royalty but it’s premature for the industry to let its guard down. That’s the word from the National Association of Broadcasters.  Speaking to a broadcasters gathering in New Jersey, NAB president Gordon Smith said the direct royalty deals reached by some radio groups are helping to keep Congress at bay.

“We feel good that there is no immediate threat but that’s not to say this issue won’t come back again,” NAB SVP of government relations Michael Hershey told the New Jersey Broadcasters Association conference Wednesday in Atlantic City.  More pressing gun control and immigration issues have made music royalties a lower priority on Capitol Hill, Hershey said.

While the royalty fight is less engaged now than when legislation nearly came up for a House vote in 2009, the NAB’s non-binding pre-emptive strike currently has the support of 139 House members and 11 in the Senate.  “Our goal is to show enough support in Congress, to show leadership and the recording industry that if legislation were introduced, we would prevail,” Hershey said.

But just because there is no real action on the Hill doesn’t mean lawmakers aren’t talking about the prickly issue, warned Wilkinson Barker Knauer attorney David Oxenford.  Register of Copyrights Maria Pallente has brought up the subject three times during recent speeches on copyright reform.  And even though a series of hearings on music royalties promised by House Judiciary Committee chair Bob Goodlatte have yet to materialize, they could still happen, Oxenford said.  In anticipation of next year’s Copyright Royalty Board proceeding to establish future streaming rates, Oxenford expects “a lot more” direct deals between broadcasters and labels.  “There is a push to do those deals now,” he said.

When it comes to radio’s future, Smith says he’s often asked by broadcasters whether they’re better off investing in radio chips on cell phones or negotiating more rational streaming royalty rates.   Smith said the answer is “both” with a caveat: consumers will ultimately make the call. “We have to be on all platforms all the time for all people,” Smith said.  “It’s really important to go where the listeners are.”

The former Senator from Oregon serves a sometimes divided industry that doesn’t always see eye to eye.  When he hears complaints from NAB members about Clear Channel cutting royalty deals directly with labels, Smith said his response is the company has “done you a huge favor” in negotiating the deals.  And when members of Congress bring up the subject of an on-air performance royalty, Smith said he points to those deals as evidence that the market is working out the issue on its own. “They say, ‘You’re right, I don’t need to wade into that briar patch’,” Smith said, paraphrasing a response from lawmakers.

The bipartisan list of those opposing a radio royalty in Congress continues to grow.  The latest additions include Reps. Joe Barton (R-TX), Lynn Jenkins (R-KS), Cathy McMorris Rodgers (R-WA), Erik Paulsen (R-MN), Jim Renacci (R-OH) and Carol Shea-Porter (D-NH).   Across the Capitol in the Senate David Vitter (R-LA) also adds his name to the Local Radio Freedom Act.  That brings the list of co-sponsors to 139 in the House and 11 Senators.

Should Congress ever attempt to impose a royalty, Smith pledged a fight — unless it was “on a voluntary basis and pegged to markets that actually determine values better than the government can ever mandate them.”  He also implored broadcasters to develop better relationships with their local members of Congress to educate them on potentially destructive game-changer issues.  “You have an obligation to speak up for your industry,” Smith said.

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