Radio royalty bill introduced in Congress

Story by Inside Radio

Rep. Mel. Watt (D-NC) has made good on his threat to introduce a bill that would require radio stations to pay a performance royalty for over-the-air music use. The proposed “Free Market Royalty Act” was introduced this morning. It would require broadcast radio’s rate to match what already exists in law for streaming radio services. It also would remove the compulsory license, allowing labels to withhold music from a radio group. Watt says that should “jumpstart meaningful private negotiations” among broadcasters opposed to paying anything.

Watt says his bill uses a market-based solution, something broadcasters have been pushing for. “While Congress will establish a right, it will get out of the business of essentially establishing a price for that right,” he says. “The value of music will be determined by the market.”

The National Association of Broadcasters has opposed a congressional mandate, saying that the recent private market deals between labels and radio groups including Clear Channel, Entercom, Beasley Broadcast Group and Greater Media negates the need for legislation.

“The Free Market Royalty Act signals accelerating momentum for an AM/FM performance right and fair pay for music creators on all platforms,” Music First Coalition executive director Ted Kalo says in a statement. “This bill sends all parties back to the bargaining table to find common ground,” Kalo says.

Watt’s bill is likely to face an uphill battle. To date, 171 House members and 12 Senators have signed a non-binding resolution opposing a radio royalty. “NAB respectfully opposes the legislation, and appreciates the support of 183 members of Congress who stand with America's hometown radio stations against the offshore record labels,” NAB spokesman Dennis Wharton says. “NAB believes market-based negotiations like the recent Warner Music-Clear Channel accord demonstrate that this issue is already being addressed in the free market. This legislation would impose new costs on broadcasters that jeopardize the future of our free over-the-air service.”