Senate Judiciary passes Performance Rights Ace

Nasdaq wire is reporting The Senate Judiciary Committee on Thursday approved a bill to require radio stations to pay royalties to performers when their music is aired. (Music First representatives have also confirmed this.)

While the bill is still a long way from passing, this is the most important hurdle it needed to clear.

I have mixed feeling about this. While I don't think it's fair that one group (terrestrial radio) gets to use something for free that another group (digital broadcasters) has to pay a large fee to use. (We pay 10-12% of our revenues because we're a "small webcaster", large webcasters like Pandora have to pay 25% of their revenues just to cover the sound recording copyright. (BMI,SESAC,ASCAP royalties for the underlying composition amount to another 4-5%).

The more commercial indie labels I talk to all want a reasonable royalty that's consistent across similar platforms (analog or digital). They value the exposure they get from the radio, but they're also looking for additional streams of revenue. I can understand that.

There are also plenty of netlabels and very indie-artist run labels who aren't to the stage of "maximizing revenues" from their portfolio of works, and are more interested in getting the free publicity that radio offers them. To many labels, the exposure is much more important than the royalty revenue.

My fear is that despite the intentions of MusicFirst, soon after this gets passed, the RIAA labels will band together to raise the rates paid by the over the air guys to match the levels paid by (and that some say is bankrupting) internet broadcasters.

And if that happens it will be the end of terrestrial broadcast music. The only thing on the FM dial will be talk shows, religious and spanish programming. And that will be kind of sad. And ultimately not serving to the music industry.

Hopefully, my fear won't come to pass.