Artists Turn to FCC in Radio Performance Fee Battle
Tuesday, August 11, 2009
A House bill that would require musicians to be paid royalties when their songs are played on the radio has sparked an ugly battle between recording artists asserting that they deserve to be compensated for their work and radio stations arguing that the payments in this dismal economy would drive many of them out of business.
The latest salvo was fired by MusicFirst Coalition, a group representing 200 recording artists, which alleged in a complaint to the Federal Communications Commission that numerous radio stations, including Lanham-based Radio One, violated their obligation to serve the community by refusing to run ads promoting the legislation. At the same time, the complaint contends, the stations ran misleading ads promoting its side and waged a campaign "targeting and threatening artists who have spoken out in favor" of the measure.
An industry group representing the radio stations says they were not required to run the artists' ads and denies that they intimidated musicians. But the FCC issued a statement Friday saying it will review the complaints and let the public weigh in on the matter before issuing a ruling within the next few months.
Charges and countercharges have been made since the legislation was introduced early this year. The two sides even have their own names for the measure -- the artists calling it a "performance right" and radio stations calling it a "performance tax."
"Advertisers last year spent $16 billion on the radio. What is drawing them to the radio? The artists," said Duke Fakir, an original member of the Four Tops.
"Many [aging] artists can't even pay their hospital bills," he added. "Yet their music is played all over the world and they don't get a penny -- and advertising dollars are generated for their work."
The National Association of Broadcasters, which is leading the opposition, says the measure would cost radio stations up to $7 billion a year.
According to the association, ad revenue dropped to $16 billion last year from $20 billion in 2006. Revenue is expected to plunge further this year to $14.5 billion, the association said.
Radio One, which owns and operates 53 stations in 16 urban markets, is running commentary by founder Catherine L. Hughes asserting that the measure would put many black radio stations out of business. Last week, the company reported net revenue of $70.1 million and station operating revenue of $29.6 million, each a drop of 16 percent from a year earlier. The company reported a profit of $7.2 million in the second quarter compared with a loss of $11.7 million a year earlier.
Officials from the station did not return a phone call Monday seeking comment.
If the measure passes, "a lot of radio stations would go out of business, or switch to all talk," said Dennis Wharton, spokesman for the National Association of Broadcasters. "A lot would cut back on public service and lay off staff."
So far, the measure has passed the House Judiciary Committee. Martin Machowsky, spokesman for MusicFirst, said satellite radio and cable TV already pay artists when they play their songs.
He said the fees charged radio stations would be negotiated if the bill passes. He said 75 percent of radio stations would pay just $5,000 a year in royalties.
"It's not clear whether remedies are necessary or available," said David Fiske, spokesman for the FCC. "We will review the comments of what people say and make a decision based on the record."