* House Committee OKs Performance Rights Act for full vote
* Act would make AM, FM radio stations pay to play songs
By Yinka Adegoke
NEW YORK, May 13 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
Broadcast radio stations have long argued that they serve
as an important free-to-air promotion outlet for music fans to
discover new songs and albums to buy. In other words, they say
they have provided free advertising for the record labels.
But as music sales have plummeted, the recorded music
industry has become louder in their calls for changes to a
system which could provide an important new revenue stream.
Warner Music Group WMG.N Chief Executive Edgar Bronfman
told Wall Street analysts last week that if the Performance
Rights Act is passed "it would result in a meaningful
improvement" to his company's results.
The labels say the United States is at odds with many major
music markets in Europe and other countries, where radio
stations usually pay some sort of licensing fee to play songs.
Broadcast radio stations are not likely to give up easily
on the passing of a law, which could significantly raise their
Radio advertising, the main revenue source of most
stations, is one of the worst hit sectors of the ad business in
the ongoing recession. It is also facing a secular decline as
advertisers move some of their radio spending to new areas like
(Reporting by Yinka Adegoke; Editing by Richard Chang)