The Industry Reacts To The New Tax Bill


Yet another iteration of a perennial effort by the recording industry to impose a performance royalty on broadcasters is on the table and could be headed for a real vote soon. And as you can expect many of your colleagues are not happy about it, some are pretty irate. Here’s what they had to say about the new “PROMOTE” bill introduced on Capitol Hill Wednesday

Broadcast Attorney Frank Montero from Fletcher Heald & Hildreth tells Radio Ink despitemontero_frank17 previous efforts to fight off this a new royalty tax the recording industry has been relentless on this and this bill does have bipartisan support. “I’m inclined to think this bill will again be voted down. But I’m more concerned by a possible broader copyright reform proposal from the House. Such omnibus legislation has long been in the works and I would be concerned that a provision imposing performance royalty obligations on broadcasters could easily be slipped between the many multiple layers of copyright reform that such legislation might contain.”

john_caracciolo16JVC CEO John Caracciolo says its unfortunate we are represented by gentlemen like Congressman Issa and Congressman Deutch, “who are so out of touch representing Americans like us. I sure do feel sorry for their constituents in California and Florida. Both are completely off base and so out of touch with this issue and with our medium to believe that radio provides no promotional value to recording artists. Did they happen to tune into the ACM awards last week and count how many times the winners thanked local radio for believing and supporting them? How many times artists mentioned actual radio station programmers and thanked them for all that radio does for their careers and promotions and the airplay that they get. When was the last time either was inside their local radio station and had a look at all the Gold Records on the walls or the “thank you’ s” from the artists and labels. Maybe they were too busy counting all the money we were making as we were defrauding artists of their compensation.”

Caracciolo said he would love to see the list of artists that want to sign on to this, “publicity grabbing stunt.” “Let me ask you this Congressmen, can we charge for the airtime we give the artists or is that pay for play? Can we opt-out of putting our local Congressional representatives on the air if we don’t get paid by them or is that defying the equal time laws. Hey Congressman Issa, take a visit to KSOQ or KXFG, that’s 92.1 and 92.9 on your FM dial in case you did not know, two great radio stations.   I bet if you just look in their lobby and talked to their programmers you would feel differently. Congressman Deutch, we hold a special bond sir, I have radio stations in your district. I welcome you to visit my facility in Palm Beach Gardens and you can take a look at the hundreds of letters, awards and accolades we have from artists old and young, new and classic and you can see for yourself just how relevant radio is. I look forward to meeting you and having you get to know local radio. This is a shameful stab at getting a seat on the couch at MSNBC. I KNOW the local radio stations in FL CD-22, (Ted Deutch district) and CA CD-49, (Darrell Issa district, who oh by the way has been named a number of times as the wealthiest currently serving member of Congress), will remember this when these two are up for re-election. Shame on both of you.”

Galaxy President and CEO Ed Levine says this bill, if enacted, could define the termed_levine16 unintended consequences. “Radio has been a major driver of album sales (back in the day) and now downloads and streams since recorded music began. The artists will find that statement to be more true today than ever. Decreased airplay resulting in decreased sales resulting in decreased revenue to the artists. Not to mention the damage to emerging artists! This is an ill conceived, non productive solution to a difficult challenge that has no easy answers.”

Jeff WarshawConnoisseur CEO Jeff Warshaw commented: “If this stupidity gets passed, it could mean the end of free over the air radio for many communities. And even major markets. Certainly not in the public interest. Hard to believe anyone that can do math (or possesses a calculator) and has read a single chapter in “Business for Dummies” could support such a proposal.”

Broadcast attorney John Garziglia says broadcaster must be vigilant. “Every year, unlessJohn Garziglia - Radio radio broadcasters effectively lobby against performance fee efforts by showing what damage such fees would do to both the business of radio broadcasting and to recording artists, there is a significant likelihood that a bill such as the one sponsored by Representative Issa could pass. The way that radio broadcasters oppose it is by joining with the NAB in political donations and basic one-on-one lobbying, as well as taking every opportunity to invite local members of Congress to get to know his or her local radio station better.”

Montero agrees, stating broadcasters be heard on this issue. “The NAB and many state broadcast associations have long fought this type of legislation in the halls of Congress. Broadcasters should write to their legislators in Congress and urge them to vote for the resolution opposing such a performance tax or royalty. If they’re uncertain how to do so they should contact the NAB or their state broadcast association.”

Radio’s two largest companies, iHeartMedia and Cumulus chose not to comment for this story.



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