Artists: Radio surely can afford royalty

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WASHINGTON -- Proponents of a new royalty for music that is broadcast over-the-air contend that a government study bolsters their argument that the radio industry can afford to pay.

The artist-industry alliance known as the MusicFirst coalition points to an FCC study that examined radio market concentration and said it shows that broadcasters have been jacking up their rates.

Annual growth of radio advertising rates since 1996 was about 10%, while the CPI has averaged a 3% increase per year over that span, FCC senior economist George Williams found in his study that examined the market through March 2007.

"What people don't realize is that 99% of the people who make money from music are not household names," said Tom Lee, international president of the American Federation of Musicians. "They are club acts, mid-tier and emerging artists, background musicians, orchestras, studio musicians and others who struggle to make ends meet."

Broadcasters and the music industry are engaging in what has become one of the biggest inter-industry battles in Washington. A high-profile hearing on the issue is scheduled this week in the Senate Judiciary Committee, in which an industry representative is Grammy winner Lyle Lovett.

Legislation granting the music industry the royalty has yet to be introduced, but it is likely to come soon after the hearing. In the House, Rep. Howard Berman, D-Calif., chairman of that body's copyright panel, is planning legislation, and this week, Sen. Judiciary Committee chairman Patrick Leahy, D-Vt., said he was interested in the legislation.

Broadcasters argue that the promotional value gained by playing music on the radio more than offsets any royalty that performers and record companies would receive.

"When you cut to the chase, RIAA is asking Congress to bail out a business model that failed to adapt to the new digital age," National Association of Broadcasters spokesman Dennis Wharton said.

Wharton said the royalty would only "fund a billion-dollar transference of wealth to foreign-owned record labels that would be unfair, unwise and unwarranted."
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