Performance Royalty Talks Intensify with Accord Possible
Talks over performance royalties for broadcasters have intensified recently, with a deal between radio and music labels on both terrestrial and streaming payments seeming more likely, industry officials said Wednesday. Such a deal has been expected by some (CD July 23 p15). The sides have held on-again, off-again conversations at the behest of members of Congress who want industry to come to an agreement about the performance royalties. Although an agreement seems closer, it’s far from certain that individual labels and owners of radio stations, which would need to approve any agreement, will sign on, industry officials said.
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In the background is the looming threat to broadcasters that the Performance Rights Act could be inserted into legislation deemed “must pass” in the waning days of this Congress, said lawyers who represent radio stations and are monitoring the talks but not participating. The concern (CD Feb 11 p5) is that backers of HR-848, like House Judiciary Committee Chairman John Conyers, D-Mich., could insert the legislation into an omnibus appropriations bill or continuing resolution, they said. Stopping such an amendment from becoming law would be difficult, they said. Spokespeople for Conyers and Senate Judiciary Chairman Patrick Leahy, D-Vt., didn’t reply to requests seeking comment.
A deal is possible between participants in the talks, which include the MusicFirst Coalition, whose members include RIAA, and the NAB representing broadcasters, said industry officials who don’t represent the groups. They confirmed that a reported settlement involving a reduction in the royalties that radio stations pay to stream music online and an agreement that stations would pay part of their revenue in royalties to cover over-the-air broadcasts is a possibility. Any deal would need the backing of NAB members, and the group’s radio board likely will get an update on royalties at a Friday meeting, industry officials said.
Stations might pay part of their annual revenue, perhaps averaging 1 percent across all radio broadcasters, as a performance royalty, as part of a possible settlement, industry officials said. They said the fee would be based on a station’s size and would not be set by the Copyright Royalty Board. That might mean Congress would need to codify the deal in legislation, since the board wouldn’t set the rates, an executive said. In exchange, stations’ streaming royalty fees could be cut about 25 percent, industry officials said.
Another part of a potential agreement involves getting more cellphones to receive FM broadcasts, long a priority of the NAB, industry officials said. They said music labels could agree to press wireless carriers to activate more chips capable of getting radio programming or get them installed in cellphone models that lack them. Spokesmen for MusicFirst and NAB declined to comment on the terms of any potential deal.
"The discussions have been serious and substantive,” said a MusicFirst spokesman. “They've been going on for a period of time.” The group remains “optimistic that we can arrive at an agreement that is not only fair to artists and musicians but that is fair to radio and is viewed by our champions in Congress as being responsive to the request going back to November now that the two sides sit down and discuss the issues,” he added.
The NAB “remains unalterably opposed to the bill” approved by the House and Senate Judiciary committees in 2009, a spokesman said. “At the request of key leaders in Congress, NAB has engaged in discussions with RIAA and music industry representatives. The discussions have resulted in progress between the two sides, but there is no agreement. NAB will oppose any proposals that are not in the long-term best interests of our membership. Any agreement would have to be approved with the backing of the NAB radio board.”