Hard working artists cannot pay the rent and radio stations are to blame was the message repeated during a three-and-a-half hour House Judiciary Committee meeting Wednesday, where the deck was stacked against the radio industry.
If you weren’t paying attention to the performance royalty issue before the hearing yesterday, you certainly should be today. Despite the 230 members of Congress who’ve signed onto the NAB’s non-binding Local Radio Freedom Act resolution, the Judiciary Committee, smitten by superstars like Gloria Estefan and Dionne Warwick, are coming after radio hard, with serious legislation.
The ongoing theme yesterday was that the idea that free radio is a promotional vehicle for artists is shattered, that radio companies are making billions on the backs of artists that can no longer feed their families because of the pandemic, and that this bill protects smaller stations from paying high fees and going out of business.
Judiciary Committee members claim that under their Respecting Artists with the American Music Fairness Act, 80% of radio stations would only pay $500 per year (stations that have revenue of $1.5 million or less). Stations with less than $100,000 in revenue would pay $10 per year. It’s clear it’s iHeartMedia, Cumulus, Audacy, and radio’s other big companies are who the committee wants to go after for bigger chunks of money. How those companies pay would be determined by a panel of rate-setting judges. Of course, even though the bill states a chunk of stations will only pay $500 per year now, many in radio believe that fee will only increase over time.
If the bill becomes law the money collected would go into one pot and be distributed to artists on a per play basis by a third-party company like SoundExchange.
NAB CEO Curtis LeGeyt, radio’s lone defender Wednesday, said even that $500 fee is real money to smaller stations, and would have a real economic impact. And, LeGeyt said, these additional fees on radio will prevent them from innovating, adding that 4,000 radio stations would be touched by the core of the legislation. LeGeyt also pushed the fact that radio is free, it’s local and additional fees would have a “dramatic impact on music airplay.” LeGeyt’s attempt to bring the fees radio pays artists for streaming music back up if both sides were to start negotiationg again fell on deaf ears.
California Republican Darrell Issa was having none of what LeGeyt was saying, repeatedly talking over the NAB CEO, misrepresenting his testimony and not allowing him to answer questions. He told LeGeyt, “all of your companies can afford to pay this.”
There was some minor concern about the impact new fees would have on radio’s smaller stations but that was pretty much swept under the rug by committee members fawning over artists.
Gloria Estefan told the committee that music has value and artists, singers and studio musicians have been left out. “Hard working artists cannot pay the rent.” She said artists are fueling a billion dollar radio business without compensation and without permission to play their music.”
Estefan said she loved radio and admitted radio played a big role in the success of her career. “I’m a very big fan of radio and it’s place in music.” She said the business model has changed from the days of her hit Conga with The Miami Sound Machine and urged the committee to support the legislation.