Broadcast radio stations may have to pay music labels to play their songs, much as satellite, cable and Net stations do, reports Reuters. Congress's Judiciary Committee voted overwhelmingly to send
the Performance Royalties Act to the full House for a vote. The music lobby is pleased by the legislative action, since music companies have coped with declining CD sales and online piracy.
Conversely, the NAB says 50% of all new fees would go to major labels, not the artists, adding that radio is essentially providing free advertising for new songs.
Does it not follow then that radio stations should be able to charge the record companies for the (currently) free promotion their artists are getting on these stations?
The symbiosis of radio stations and music companies has always worked. Stations have always had to pay ASCAP and BMI royalties. Is it reasonable to expect stations to pay for music usage simply because the record companies can't figure out a way to stop piracy? From where I stand, this appears insane.
Congress should do a test study in this area to see if payola will once again thrive as a result of this new tax to radio stations. one senerio is that large station group owners can cut deals with major lables, with large rosters, and then cut out the small independents, who will hardly be considered when a station has to pay them to break their new music. Independent music producers /lables will obviously suffer from this.
Also small market independent radio stations (say mom and pops) can also be taxed out of business. Many have very small margins of error when it comes to the bottom line.
This is a very complexed issue that should really be well thought out prior to going in to law.