Different sectors of the music industry — including reps from RIAA, NAB, NARAS, Pandora and others — squared off before the House Subcommittee on Communications and Technology yesterday (June 6) over differences on issues like whether U.S. terrestrial radio should pay a sound recording performance royalty, parity for digital royalty rates and whether a radio chip installed in mobile phones should be activated.
The news that Clear Channel had cut a deal with Big Machine to pay a sound recording performance royalty (which Billboard.biz broke) in exchange for a predictable percentage rates for digital radio instead of per play rates, was commented on frequently throughout the panel. The music industry has fought for 80 years — so far unsuccessfully — to have a sound performance royalty from terrestrial radio, while the radio industry battled tooth and nail to prevent what it called “a tax” from being mandated on it.
RIAA chairman and CEO Cary Sherman applauded the concept of the deal while reserving endorsement until he knows the specific terms. “I am glad to hear that Bob Pittman and Clear Channel is stating that artist and record companies deserve to be paid and that promotion isn’t enough.”
Earlier, before Sherman spoke, jazz musician Ben Allison, governor of the New York chapter of the National Academy of Recording Arts and Sciences, started his testimony by complaining about the lack of that very royalty. “Terrestrial broadcasters have an inexplicable “free ride” when it comes to performance royalties,” he said. He said they use music to fuel their multi-billion dollar industry. “All of the other broadcast platforms-Internet, satellite and cable-pay a performance royalty for sound recordings, regardless of promotion,” Allison said. “Every other country in the developed world has such a right…This makes corporate radio the only business in America that can legally use another’s intellectual property without permission or compensation.”
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