Variety
New legislation has been proposed to change the way radio stations pay roalties to artists. The bill’s supporters characterize it as correcting an inequity that has long existed: Radio stations pay songwriters, but not performers, when their music is played. Proponents say a performance royalty makes sense with changes in listening habits and in the way that some artists make money. As CD sales decline, an increasing share of their returns come from concerts and other live appearances. But oppents say that the addition of more royalty payments would be to great of a finacial burden. The bill “couldn’t come at a worse time in the radio business,” says John Gallagher, market manager for Greater Media’s three Detroit stations. He characterizes the bill as an effort by record labels — which in many cases will split the royalty with the artist — to make up for lost revenue as listeners have shifted to digital downloads. And, Gallagher warns, if the bill becomes law, “I would have to take a hard look at how much music we play and which artists we play.” He says his stations each pay about a $500,000 per year to BMI and ASCAP for royalties to songwriters, and believes the new royalty would cost a similar amount. Dennis Wharton, spokesman for the National Assn. of Broadcasters, says many stations would be forced to switch to all-talk formats if the bill’s provisions are enacted. He then pulls out a big gun in the broadcasters’ arsenal, invoking a dire scenario guaranteed to terrify many in the Democratic-controlled Congress: “More stations could potentially switch to Rush Limbaugh.” Broadcasters have also raised the issue of race, specifically the impact that the bill would have on minority-owned media. Cathy Hughes, founder of Radio One, the country’s largest African-American radio broadcaster, said in on-air commentary that the bill would “murder black-owned radio.”