A FM receiver required for every cell phone, and royalty payments from every over-the-air radio station. Those are the key recommendations of a proposal released this month from the National Association of Broadcasters (NAB).
Radio stations currently play music without licensing payments, on the grounds that such use helps to promote the musicians. In the NAB’s proposal, stations would pay a performance fee of one percent or less of net revenue. Smaller stations would pay smaller amounts, and the total generated is estimated at $100 million annually.
Heading Off Congress
The NAB plan is an attempt to work out an industry plan before Congress does. House and Senate committees approved bills in 2009 that would mandate performance fees for over-the-air radio stations. But, at the urging of lawmakers, the industry has been working on its own deal for several months.
There’s already a requirement for online radio stations to pay performance fees, which followed a major battle between SoundExchange, which collects the fees for rights holders, and online stations and content providers. More than $180 million was collected from online radio in 2009.
The issue isn’t trivial for the music industry, whose revenue from recorded music has dropped 50 percent over the last 10 years, in part due to the widespread sharing of music.