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Modified Performance Rights Act Passes in the House

As expected, the Performance Rights Act - a bill that would require radio stations to pay royalties to performers - passed in the House Judiciary Committee; it now goes to a full House vote.

Before the bill, which has been strongly lobbied against by broadcasters, can become a law, a similar law must be passed by the Senate and the differences in the two bills will need to be reconciled before a final version goes to President Obama.

The NAB applauded the fact that there was considerable bipartisan opposition to the so-called performance tax, “even in a committee where support for the record labels is strongest,” NAB evp Dennis Wharton is quoted as saying in Radio Ink.

Nine members of the committee voted against the bill in a move that Wharton says places them firmly in the camp with “America’s hometown radio stations, their 235 million weekly listeners, and the yet-to-break artists who will lose their number one promotional platform if this bill is enacted.”

If passed, the performance royalty legislation would increase overhead costs for stations to the tune of a collective $400 million to $7 billion per year.

Civil rights groups have protested the Performance Rights Act, urging that a hearing be held to discover the impact of such a royalty on minority radio. The protest led to modifications being made to the House bill for smaller broadcasters. Under the new bill, radio stations making $100,000 in revenue or less would pay $500 a year for the rights to broadcast recorded music; stations with $100,000 to $500,000 in revenue would pay $2,500 a year; stations making between $500,000 and $1.25 million in annual revenue would pay $5,000 annually. Large radio companies like Clear Channel and Cox Radio  would pay negotiated royalties, according to the Wall Street Journal.

Nearly 200 House members have signed the Local Radio Freedom Act, a resolution which opposes performance royalties on broadcast radio.