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Performance Tax Bill Back

During a hearing on copyright law this week, Rep. Mel Watt (D-NC) announced to his colleagues that he will be introducing performance tax legislation soon. NRB, present at the hearing, reacted quickly. “Performance tax legislation would be a crushing blow to many Christian radio stations,” stated Dr. Frank Wright, President & CEO of NRB, later that day. 

In an interview with The Hill after the hearing, Rep. Watt declared that his bill “would recognize a performance right so [broadcasters] would have to sit down with artists and either work out a regime on their own or be subject to litigation about the value of what they're playing."

Dr. Wright countered, “I respectfully suggest to Rep. Watt that such legislation is fundamentally flawed as it rests on the faulty premise that all the value in radio airplay of music flows to broadcasters – an assumption refuted by reason and experience.”  He added, “NRB would welcome a more coordinated collaboration with Christian music artists in order to both preserve Christian radio and to benefit the music of those artists.”

Musicians receive free airplay by radio, boosting recognition and sales of their work.  However, advertisers, sponsors, and program syndicators pay for placement on radio because of the substantive benefits they receive from over-the-air (OTA) carriage. The demonstrable value of radio airtime is ignored by many advocates of a new OTA performance tax.

During the House Judiciary Subcommittee hearing, panelist Tor Hansen, who co-founded Yep Roc Records/Red Eye Distribution in North Carolina and sits on the Board of the American Association of Independent Music, added his support for a performance tax. However, Rep. Jason Chaffetz (R-UT) adeptly drew out of Hansen a reluctant admission that radio is valuable in spreading the word about his artists’ music. “There’s a value for being on the radio” said Rep. Chaffetz. 

NRB will continue to vigorously oppose a performance tax on broadcasters. Indeed, earlier this year the NRB Board of Directors unanimously approved a Resolution finding, “The radio broadcasting industry has had a long, and mutually beneficial relationship with the music recording industry; further, those radio stations which have played music have… substantially benefited performers and music companies by airing and promoting their music.” The NRB Board consequently urged “Congress to resist any attempt to create a ‘music performance right’ that would impose a new copyright fee on radio stations that play over-the-air music,” as well as a consistent, fair, and non-burdensome webcasting royalty regime.

Instead, NRB supports a bipartisan bill, the Local Radio Freedom Act, sponsored by Rep. Michael Conaway (R-TX) and Rep. Gene Green (D-TX) in the House and Sen. John Barrasso (R-WY) and Sen. Heidi Heitkamp (D-ND) in the Senate. The bill (H.Con.Res.16/S.Con.Res.6) opposes “any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings,” and it has attracted the support of 143 Representatives and 11 Senators thus far.

By Aaron Mercer, Vice President of Government Relations

Published: July 26, 2013

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