Earlier this month, Congressional lawmakers introduced a proposal to levy a performance royalty on radio broadcasters for broadcasting music. The commercial radio industry strongly opposes the plan, which is contained in the proposed PROMOTE bill, saying it will hurt both radio stations and recording artists.

Some opposers say:

“Every year, unless 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 (Rep. Darrell Issa, R-Calif.) could pass.”

“The way that radio broadcasters oppose it is by joining with the NAB (National Association of Broadcasters) 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.”

Under the PROMOTE (Performance Royalty Owners of Music Opportunity to Earn) Bill, radio broadcasters would have to pay royalties to play music at identical rates as Web broadcasters.

But critics have described that as an apples-to-oranges comparison. Web sites track the number of times a song is downloaded and pay and defined rate—currently $.0017—per song. But if a radio station has to pay the same per-son rate for the potentially many thousands of listeners that listen to each song, the fees would add up quickly. This is in addition to fees already paid to the American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music, Inc. (BMI) and others for the rights to air music.

Many in the radio industry say that recording artists also would suffer, particularly unknown and emerging performers, as radio stations might be forced to scale back on the amount of music they play.

Broadcast industry officials note the close, mutually beneficial relationship that exists between musicians and radio stations. Consumers hear a song on the radio, like it, and then purchase an album or digital download.  

The NAB estimates that radio’s free promotion is worth more than $2.4 billion annually to the music industry in the form of music, concert ticket and merchandise sales. The organization is on record opposing performance fees like the one proposed in the PROMOTE Bill, saying, “A performance tax could financially cripple local radio stations, harming the millions of listeners who rely on local radio for news, emergency information, weather updates and entertainment every day.”