Radio tax
Is it a proposal for a new tax or a proposal to ensure payment of copyright fees? The answer may depend on whether you are a broadcaster of music or a performing artist and recording industry executive. But the eventual official answer, to be decided by Congress, may impact the music you hear over the air on AM and FM radio.
There is static in the radio business these days, as record companies and some recording artists seek to have Congress end a decades-old exemption from paying royalties to artists whose songs they play over the airwaves.
The dispute is now being played out in Congress, where competing legislation is being debated, some of which would require radio stations to make payment for playing records, and some bills which would essentially keep the status quo. The debate is also being played out on dueling websites.
Radio executives say that over-the-air radio provides incalculable benefits to record companies and artists through the free publicity received by playing their music for the general public. The record company position, one joined by some artists, is that radio broadcast station’s should pay royalties, just as they do for their new online streaming services.
“I think the performance royalty tax is nonsense,” said Jason Finkelberg, general manager with Pamal Broadcasting, which owns several stations in the Hudson Valley, including 100.7 WHUD and K104.7. “The record labels have made millions of dollars, billions of dollars on the back of free promotion from radio stations. Their business has changed and they have mismanaged their business. But still the number one way people are exposed to their music is through radio, and without radio, there I no recording industry. So, again, to now charge radio stations a performance tax is nonsense.”
“It’s not a tax, it’s a copyright payment,” said Marty Machowsky, spokesman for musicFIRST (Fairness in Radio Starting Today) Coalition, the organization that is actively supporting measures to make radio stations pay for over-the-air broadcast of musical recordings.
Machowsky said satellite radio, Internet streaming of radio station signals, television shows and movies all pay artists a fee when they use their recordings. He said that broadcast radio, which does pay songwriters when they play a song over the air, has never paid the artists who are performing the song and said it is a longstanding injustice that should be rectified.
The split in the music industry and in Congress is neatly illustrated in the competing bills. There are currently two bills pending in Congress that would levy a performance tax on local radio; HR-848 sponsored by Rep. John Conyers of Michigan and S.379 sponsored by Sen. Patrick Leahy of Vermont.
Additionally, anti-performance tax resolutions have been introduced in the House and Senate in support of local radio. In the Senate, Sens. Blanche Lincoln of Arkansas and John Barrasso of Wyoming introduced S.Con.Res 14. In the House, Reps. Gene Green and Mike Conaway, both of Texas, introduced H.Con.Res.49. Both are known as the Local Radio Freedom Act.
The United States is one of the few nations in the world that does not pay a radio performance fee, Machowsky said. The others are China, North Korea, Iran and Rwanda. “That’s the company we’re keeping on this issue,” he said.
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