House Committee OKs radio payments to music labels

By Yinka Adegoke

NEW YORK (Reuters) - Broadcast radio stations may finally be forced to pay music labels for playing their songs, as proposed U.S. legislation moved a step closer toward approval on Wednesday.

While newer media such as satellite, cable and Internet stations pay music companies to broadcast their music, terrestrial U.S. radio stations have resisted for decades.

The U.S. House of Representatives Judiciary Committee voted 21 to 9 on Wednesday to send the Performance Royalties Act to the full House for a vote.

Music companies, struggling with rapidly declining CD sales and online piracy, said the proposed law supported artists and rights holders in their fight for fair compensation when music is broadcast on AM and FM radio stations.

"Corporate radio's days of hiding behind a loophole in the copyright law are over," said Jennifer Bendall, executive director of industry lobbyist musicFIRST Coalition, calling for similar pay-to-play contracts for all radio stations.

But the National Association of Broadcasters said, if enacted, 50 percent of the new fee would go directly into the coffers of the major labels.

"Record label abuse of artists from Count Basie to Prince is well documented, as evidenced by scores of lawsuits filed by musicians cheated out of royalties," NAB Executive Vice President Dennis Wharton said in a statement.

"Moving forward, the fundamental question is this: If the debate is about 'fairness to artists,' why should the record labels get one penny from a performance tax on radio stations?"