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Sinatra Says Royalties Exemption 'Robs' Artists
WASHINGTON -- June 11, 2008: Nancy Sinatra, daughter of legendary artist Frank Sinatra and a recording artist in her own right, testified on behalf of the MusicFIRST Coalition in support of the Performance Rights Act at a hearing of the House Judiciary Committee's Subcommittee on Courts, the Internet, and Intellectual Property.
Sinatra noted that some artists have worked for decades to have a performance royalty imposed on broadcasters, and said, "Why is the broadcaster exemption allowed to rob us? To disadvantage every other radio platform that does, correctly, pay us?" She continued, "In no other business is the promise of promotion justification for the taking of someone's product."
But Sinatra said that the supporters of the PRA are not seeking to harm broadcasters. She praised the bill's provisions for small, religious, and educational broadcasters and said artists "are just seeking our fair share."
Sinatra was followed by Commonwealth Broadcasting President/CEO Steve Newberry, speaking on behalf of the NAB, who began by saying that"all broadcasters -- urban, rural, religious, public, community, ethnic, large, and small broadcasters like me -- all oppose H.R. 4789."
He continued, "Local radio provides to the recording industry what no other music platform can: Pure music promotion. Radio is free, radio is pervasive, and no one is harming record label sales by stealing music from over-the-air radio."
Newberry cited a study, circulated by the NAB, that showed a strong relationship between airplay and record sales, and said, "Under H.R. 4789, the value of this extraordinary promotion, and all of the financial benefits that come from it, will be harmed. Ultimately, less music will be played, less exposure will be provided for artists -- particularly new artists -- and music sales will suffer."
Newberry said, "I want this subcommittee to understand what it means to local radio should H.R. 4789 become law. Most local radio stations are struggling to be profitable since most of our operating costs are fixed and our advertising revenues are flat, and they are projected to remain flat. I know the intent was to protect smaller radio broadcasters, but as an owner of local stations in rural markets, I fear it does not."
Later, asked by Rep. Howard Coble (R-NC) whether the $5,000 flat fee for stations under a revenue cap addresses his concerns, Newberry said, "For a lot of small-market stations, $5,000 is a lot of money." While he said he appreciates the intent of the provision, he added, "I think the amount would be an economic burden to those who find it most difficult to find profitability."
Subcommittee Chairman Howard Berman (D-CA), who co-authored the bill, asked Newberry why it's acceptable to radio to pay for sports rights, which promote teams and their tickets and merchandise, while it doesn't want to pay for music. Newberry responded that, in the past, when high schools, minor-league teams, and other teams with lower demand asked to be paid for broadcast rights, radio stations have simply stopped airing their games.
He said, "If we turn this into strictly a financial, monetary exchange, we're going to find ourselves in exactly the same situation. We're only going to be playing the songs that give us the biggest return on investment." An unintended consequence of the bill, he said, is that successful artists will make more money, while those who are struggling will have even less access to the airwaves.
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