Radio Performance Royalty

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Radio Performance Royalty Overview

Local radio stations have long had a symbiotic relationship with record companies and performers. Record companies and artists provide their songs and music for free to stations, and stations air these songs and music for free. Record labels and artists benefit from this free advertising and promotion, which leads to increased visibility and popularity for artists, more sales of recordings, and more concert ticket sales.

Despite this mutually beneficial relationship, the recording industry wants Congress to create a new statutory “performance fee” to require local radio stations to pay record companies and performers for playing music over the air.

Congress has repeatedly rejected calls to require radio stations to pay a performance fee (or “tax”) for music played over the air. Each session, the Local Radio Freedom Act (LRFA), which declares that Congress should not impose any new performance fee, tax or royalty on local radio stations, is introduced and garners significant bipartisan support.

OAB Position

The OAB strongly opposes the imposition of a performance fee, which ignores the tremendous promotional value that radio stations provide for record companies and performers. Moreover, a performance fee would be in addition to the substantial copyright fees already paid to songwriters and composers of music played on the air. Radio stations pay approximately $350 million each year to performance rights organizations such as ASCAP, BMI, SESAC and GMR.

Additionally, if a performance fee were enacted, the majority of the fees paid would go giant record companies, most of which are foreign owned. This means stations would be sending money overseas that would otherwise be invested in local communities.

Current Status

Performance royalty legislation has been introduced in the Congress. The so-called American Music Fairness Act (AMFA) would require local broadcasters to pay a performance fee for airing songs and music on their stations. The AMFA had a hearing in the House Judiciary Committee in February during which numerous performers testified about their need for compensation from radio stations.

Fortunately, there continues to be significant opposition in Congress to the performance tax. The Local Radio Freedom Act (H. Con. Res. 33), which opposes the imposition of a radio performance tax, is sponsored by Reps. Kathy Castor (D-FL) and Steve Womack (R-AR). The LRFA has more than 200 co-sponsors, including all 16 members of the Ohio Congressional delegation. A companion version has also been introduced in the Senate by Sens. Martin Heinrich (D-NM) and John Barrasso (R-WY) (S.Con.Res.9).

The OAB encourages our members to thank our Members of Congress for their strong support of local radio stations. Contact information for Members of Congress is available here.

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