On Thursday, we told you about the latest ploy by Congress to get radio to pay for songs it airs on music stations. Broadcast attorney David Oxenford did the industry an even bigger favor when, in his latest blog, he dug deeper into the bill to grind out the details about just how much it might cost you if the “PROMOTE” Bill was ever passed. Here’s how he broke it down…
Oxenford writes that it’s interesting that the proposed language of the Act suggests that the royalties to be paid by broadcasters will be “identical” to those paid by webcasters, and will be paid on the same terms. Then he wonders exactly how that would work. “Webcasters pay on a ‘per performance’ basis, having to count and report each song played by the webcaster and the number of people who are listening to that song. Technologically, broadcasters can’t track that information as there is no methodology to determine exactly how many listeners there are to any radio station at any one time. Interestingly, Sirius XM and cable radio can’t track those numbers either, and these services pay on percentage of revenue basis, yet the draft of the PROMOTE Act says that radio would pay using rates and terms ‘identical’ to webcasters, not to Sirius XM or cable radio, seemingly setting up an unworkable system.”
And why is that unworkable? “Using broadcast rating information to estimate payments, what would a webcasting-like royalty mean for broadcasters? Webcasters currently pay at a per-performance rate of $.0017. In other words, for each listener to every song, the webcaster pays $.0017. To translate that to broadcast terms, if a station averaged 1,000 listeners for each song that station plays, the royalty would be $1.70. If the station played 10 songs an hour, it would pay $17.00 an hour. Multiply these numbers by the actual audience of a station (which could be significantly larger in big markets) and the number of hours of music programming in a given time period, and these fees would really add up. This is in addition to the fees paid to ASCAP, BMI, SESAC, and now GMR for the rights to the musical composition, and all other costs of station operation.”
Oxenford concludes that given its lack of precision as to its terms and the methodology for paying the royalty, this seems to be nothing more than a bill introduced to make some headlines, which it clearly has.
Read the entire Oxenford blog HERE.