US Senate Panel Approves Radio Royalties For Performers

By Fawn Johnson Of DOW JONES NEWSWIRES WASHINGTON -(Dow Jones)-

The Senate Judiciary Committee on Thursday approved a bill to require radio stations to pay royalties to performers when their music is aired, a top priority for the recording industry.

The Senate committee vote marks the furthest congressional progress yet for the measure, although it is still far from becoming law.

Broadcast radio stations now pay song royalties to songwriters and producers, but they don't pay performance fees for playing the artists' music.

In contrast, cable, satellite and Internet radio pay performance royalties.

Under the bill, large radio companies such as Clear Channel Communications Inc. and Cox Radio Inc. would be required to pay negotiated royalties to performers for playing their music on the air.

The measure includes features to accommodate financial woes of smaller broadcasters. Broadcasters making less than $50,000 a year could elect to pay $100 as a flat fee to play all the music they want. Mid-sized stations also would have flat-fee royalty options on a tiered basis.

A similar bill passed the House Judiciary Committee earlier this year. Rep. Howard Berman, D-Calif., one of the lead sponsors in the House, has acknowledged that the measure isn't likely to see a House floor vote this year because it doesn't yet have enough supporters.

The National Association of Broadcasters has been lobbying aggressively against the bill and has garnered enough members in the House to stop the bill from becoming law.

The NAB argues that performers receive free promotions worth millions when their music airs on the radio.

Broadcasters also say the extra cost for the royalties would be devastating to their businesses. The Minority Media and Telecommunications Council and the National Association of Media Brokers told Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., earlier this week that the legislation would throw at least a third of minority broadcasters into bankruptcy.

The musicians' supporters - the Recording Industry Association of America and the American Federation of Television and Radio Artists among them - say the U.S. is the only industrialized country in the world that doesn't pay performance royalties. That disparity costs American musicians between $70 million and $100 a million a year, according to Leahy.

The bill also includes language to set the same general royalty rates across different broadcast platforms, a particular concern for Internet radio. Sen. Diane Feinstein, D-Calif., has asked for such changes, and further negotiation on those provisions is expected.