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According to Portnow, the proposed legislation would close the “corporate radio loophole” that prevents artists from earning royalties for work used by the broadcast industry.

PERFORMANCE RIGHTS ACT DRAWS LINES IN SAND

Recording Academy’s Neil Portnow Calls for Action, Edgar Bronfman Eyes Pay-Off, Broadcasters Cry Foul
It’s the radio vs. records in the latest showdown for music revenues shrinking by the minute.

The U.S. House Judiciary Committee will vote within the next week on the Performance Rights Act that would force radio to pay those who perform songs played on-air a royalty rate similar to what writers and composers already receive from ASCAP, BMI and the like.

Recording Academy President/CEO Neil Portnow first mentioned the industry desire for a performance right fee for artists whose music is broadcast on AM/FM radio on last February’s Grammy telecast, and now has reiterated the plea in an e-mail to all Academy members, telling them “now is the time to act… so your representative needs to hear from you today or tomorrow (5/11 and 12).”

Royalties are paid to performers by U.S. Internet radio and satellite radio, and by terrestrial broadcasters everywhere but in America. According to Portnow, the proposed legislation would close the “corporate radio loophole” that prevents artists from earning royalties for work used by the broadcast industry.

Portnow says, “If you believe that performers should be compensated whenever another business profits from their work, please take three minutes and place a call to your legislator's office. It's quick and easy. Simply go to www.grammy.com/musicfirst and click ‘Call Now’ for instructions.”

The issue has also drawn opponents from the $16 billion radio industry, currently grappling with its own woes, with many claiming the payments mean many stations will be unable to survive. In addition, observers point how radio will choose not to play new artists because of these expenses, making it difficult to break acts.

Meanwhile, Warner Music Group boss Edgar Bronfman claims the industry has enlisted support from 45 members of Congress for the legislation, with the powerful broadcast lobbyists insisting they’ve got four times that.

In last week’s earnings conference call, Bronfman was asked if this radio royalty could bring record labels up to $500 million, based on payments to ASCAP and BMI.

“It may be years before we get the full amount of what a royalty could bring in,” he say. “But it will certainly be meaningful to our bottom line.”

What do you think? Should there be a Performance Rights Royalty for performers like that for songwriters and composers? Who’s right in this case? Are the labels being greedy or are the broadcast companies overstating the burden these payments would represent? Write in to [email protected] with your responses and we’ll run the best ones.

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