NAB Proposes Performance Fee Terms


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Washington - Aug 6, 2010 - The NAB Radio Board met in Washington for an educational update on the status of ongoing discussions between broadcast industry representatives and representatives of Musicfirst.

NAB Vice President Dennis Wharton said, "The NAB Radio Board had a full and productive exchange of ideas today on the status of discussions with Musicfirst representatives. The talks are part of an ongoing dialog with the board and NAB membership on possible alternatives to pending legislation that would be devastating to the future of free and local radio."

Wharton says that no votes were taken at the board meeting. The board reiterated its strong opposition to the pending bill in Congress, while agreeing that it is appropriate for NAB representatives to continue discussions with Musicfirst.

In 2009, Rep. John Conyers (MI) and Sen. Patrick Leahy (VT) introduced the Performance Rights Act (PRA) in the House and Senate, respectively. The legislation was voted out of the respective Judiciary Committees and has the support of certain members of congressional leadership. Broadcasters created a counter resolution called the Local Radio Freedom Act, which also garnered support and has helped prevent further movement on PRA.

At the direction of House and Senate leaders in late 2009, the NAB met with Musicfirst -- representing artists, labels and unions. To date, discussions have yielded the following potential terms. These terms have not been agreed to, but are under discussion by the industry:

  • Tiered rate of 1 percent or less for all net revenue (roughly $100 million for the industry) which is permanent and cannot be adjusted without changing statute or by mutual agreement
  • Permanent removal of CRB jurisdiction for terrestrial and streaming
  • Streaming rate reduction from current rates
  • Inclusion of radio receiver chips on all mobile phones
  • AFTRA issues resolved (agency commercial replacement on webcasts)

    The tiered rate of 1 percent or less for all net revenue would be as follows:

  • Commercial and non-profit stations with revenue less than $50,000 annually would pay the lesser of $100 or 1 percent of revenue annually.
  • Commercial and non-profit stations with revenue between $50,000 to $100,000 annually would pay $500 annually.
  • Non-profit stations with revenue more than $100,000 annually would pay $1,000 annually.
  • Commercial stations with revenue between $100,000 to $500,000 annually would pay the lesser of $2,500 or 1 percent of revenue annually.
  • Commercial stations with revenue between $500,000 to $1,250,000 annually would pay $5,000 annually.
  • Commercial stations with revenue more than $1,250,000 annually would pay 1 percent of revenue annually.

    Stations with incidental music use -- news, talk and sports radio -- would not pay for music. Additionally, religious services -- not religious music -- would be exempt from music fees. These referenced rates would be permanently fixed by statute and can only be changed by act of Congress or joint agreement between both parties.




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