(Federal) Legislation Worries Vt. Radio Stations

[The Straight Story]

Legislation Worries Vt. Radio Stations


Burlington, Vermont - August 4, 2009

The U.S. Congress is considering legislation that would require radio stations across the country to pay performers every time a song is played. Broadcasters say this is a terrible idea that could drive some rural radio stations out of business.

WCAX News Anchor Marselis Parsons talked to Jim Condon, the director of the Vermont Association of Broadcasters, and noted radio stations already pay fees to composers and arrangers.

Condon: Well, you're right. The radio stations have for decades now, almost 80 years, been paying composers and arrangers of songs; the people who actually created the songs themselves. When a station plays a record, the composer doesn't get any publicity, however the performer is and is indirectly getting publicity from it.

Parsons: All right, by the same token though satellite radio is paying those performance fees-- a royalty.

Condon: Well that really gets to the nub of the question here, Marselis. Some think if the satellite radio is going to pay the performers fee, then over-the-air radio should too. But on a fundamental basis, that's an absurd argument because satellite radio is a subscription service. You have to pay for it every month. Same with Cable radio. Over-the-air radio is absolutely free. There's no subscription charge, so right there is a major difference... a fundamental difference.

Parsons: And you said if this becomes law, that it could drive some radio stations out of business?

Condon: There's no question about it. It's going to cost jobs in the state of Vermont if this bill passes. The latest estimate is that radio stations would have to come up with an additional $2 million a year to pay those royalty fees and to generate that kind of profit-- keep in mind that the average profit margin at a radio station is 5 percent-- they would have to generate $40 million in additional advertising revenue. It's not gonna happen. What would happen instead is some stations will go dark; some stations will switch from playing music to news and talk. So there will be less music played and less promotion of the artists that they're promoting now and people are gonna lose jobs.

http://www.wcax.com/Global/story.asp?S=10847608

[NashVegas]

1. Vermont and Other States With a Small Retail Base Are Going to Get Killed

As well as radio in less populated regions of any state. If this bill becomes law, it will mean even more syndicated programming - most likely, talk - on radio, and it's going to kill the few independent, musically adventurous stations that are left.

The supreme joke of it is that stations who dedicated themselves to exposing artists like many of the Music First coalition - were never getting rich in the first place.

The "compromise" being offered to radio is that stations making under $5 million per year will only have to give up 25% of their business's income.

Record labels devote billions of dollars to getting their music heard on the radio. Really, there's nothing that would make them happier than to have radio - that isn't programmed by their own promotion departments - go away entirely, now the internet is here and they can control what gets heard and what doesn't, that way.

[brendan120678]

2. Would this bill, if passed, have any effect...

on college radio stations? Back in my college days I spent many hours a week as a DJ at our college station.
Would they have to pay the same royalties? Or as a non-profit, would they be exempt?
We weren't allowed to do any commercial advertising, because of our non-profit status, only Public Service Announcements.

[NashVegas]

3. They'll Pay

There would be some sort of compromise, I'm sure. But they'd have to pay, just as non-profits have to pay the internet performance fees.

http://chronicle.com/blogPost/Performance-Rights-Act-Could/7194

FYI, those fees, the ones webcasters got hit with - that the RIAA now uses as a model - were developed the way they were because Mark Cuban wanted to get small and independent players out of the pool, back when he was running Yahoo broadcast.

[ProgressiveProfessor]

4. This could force them to go to talk formats which are overwhelmingly right wing