U.S. Congress Votes Radio Performance Royalty Fees

The Performance Royalties Act and the Webcaster Settlement Act were debated today by the U.S. House Judiciary Committee. The Performance Rights Act, supported by Billy Corgan, would impose a “performance tax” on broadcast radio stations, which traditionally don’t pay artists and labels. In fact, some say that major labels have paid stations in exchange for airplay in the past. The Committee voted 21 to 9 to send the Act to full House for a vote.

The Webcaster Settlement Act would lower royalty rates for Internet radio services. Jonathan Potter, Executive Director of the Digital Media Association said that the Act will make sure “Internet radio royalties are determined using the same fairness-based balancing test that has always been the standard for setting cable and satellite radio royalties.”

The hearing for the first Act took three hours, and as of yet there is no news on the result of the Webcaster Settlement Act. It seems fair that artists be compensated every time a radio station uses their songs, but terrestrial radio is losing ground to its competitors on the Internet, and the added weight of royalty fees could be too much for the radio stations to bear.

The financial impact on smaller radio companies could be massive, and although the economic strain has been felt throughout the industry, the individual companies responsible for the distribution of music probably shouldn’t be at each other’s throats demanding cash.

Is there solution that helps artists, but doesn’t put radio stations in financial trouble?

Photo via zimbio.com
Source: Hypebot, Billboard