Senate Committee Approving AM-FM Royalty Bill - Via Threat Level:

A house subcommittee approved legislation Thursday requiring AM-FM radio broadcasters to pay royalties to singers, musicians and their labels, a proposal moving to the House Judiciary Committee and possibly soon to the U.S. House.

The measure, which broadcasters said could cost the radio broadcasting industry as much as $2.4 billion a year in royalties, is being pushed by the Recording Industry Association of America and other groups representing musical copyright holders.

For decades, the music business and broadcasters have lived in a symbiotic relationship when it came to compensating singers, musicians and labels. Royalties to them were not required by Congress because compensation was offset by the promotional value of radio. The music industry formerly believed radio play was so necessary that it paid broadcasters to play their music, a term known as payola.

But with the advent of widespread online music piracy, iTunes and internet and satellite radio, the music industry is looking to make money wherever it can -- while at the same time viewing free radio as less important to its business model.

In an interview with Threat Level, an industry spokesman likened AM-FM broadcasters as pirates. For its part, the National Association of Broadcasters evoked a nationalistic sense of xenophobia -- the race card if you will -- by taking out an advertisement Thursday in D.C.-area publications blasting the royalties because they would go to overseas "foreign" recording companies.

Three of the Big Four recording companies are based outside of the United States.

"A loophole in the law lets AM and FM music radio stations earn $16 billion a year in advertising revenue without compensating the artists and musicians who bring music to life and listeners' ears to the radio dial. It's not right. It's not fair and we are going to make sure it is changed," said Doyle Bartlett, executive director of the musicFIRST Coalition, which represents the RIAA and other intellectual property rights groups.

Dennis Wharton, a NAB vice president, said that, "Despite today's action, there remains broad bipartisan resistance to the RIAA tax from members of Congress who question whether a punitive fee on American's hometown radio stations should be used to bail out the failing business model of foreign-owned record labels."

As many as 219 House members have signed a non-binding resolution supporting the status quo.

Internet, cable and satellite broadcasters pay royalties to all participants involved. Singers, musicians and the labels get no royalties when AM-FM radio broadcasters air their performances.

Composers and songwriters, however, do get AM-FM royalties, which are set under a complicated and negotiated rate structure.

An identical AM-FM radio royalty measure is pending in the Senate. Small and public stations would pay $5,000 annually, whereas larger stations would pay negotiated royalties under the proposals.

Photo Tracy O

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(Read Original Article - Via Threat Level.)