B'casters want to hear how labels treat artists

At issue is new royalty legislation

Broadcasters are hoping to open up the old wounds that divide the record industry from the artists as they asked a powerful lawmaker to conduct hearings on the issue.

On Thursday, the National Association of Broadcasters asked Rep. Howard Berman, R-Calif., to conduct a hearing on label treatment of artists as part of the lawmaker's examination of a new royalty for recordings played over the air.

Broadcasters were beaten up by artists during a hearing on the performance royalty earlier this year and think that record companies' notorious bad behavior toward artists ought to be part of any examination.

"A hearing that includes the RIAA and the four major record labels would allow members of the subcommittee to explore more thoroughly the typical business practices of the recording industry and the dynamics of the relationships between the performers and the record labels," NAB president and CEO David Rehr said.

Berman said he had always planned on another hearing and hoped that broadcasters weren't simply trying to mount a distraction. Berman is preparing copyright legislation to change the royalty that could also include other issues reforming the digital music licensing system under Section 114 of the copyright law and other items. Aides to Berman declined to enumerate on the bill's contents.

"I've been planning on holding an additional hearing on performance royalties soon after the bill is introduced," the lawmaker said. "I hope that NAB will be prepared then to present arguments on the merits of the issue at hand rather than continuing this attempt to divert attention away from the fundamental point: that broadcasters have built a multibillion-dollar industry on someone else's content without paying for it."

Berman challenged the content industry to defend a proposed change.

"It is important to note here that while artists, musicians and labels certainly don't agree on everything, they are united in their effort to fight this historical inequity," he said.

Broadcasters contend that airplay sells enough recordings to compensate artists and that a royalty for performers is unnecessary. While broadcasters pay a royalty to songwriters and publishers, radio doesn't pay performing artists who aren't songwriters or the record company.

Artists and the labels contend that this is unfair and should be stopped. In the modern marketplace, where satellite radio, cable TV and the Internet pay a performance royalty, regular radio should too, they argue.

But broadcasters, led by Rehr, contend that any royalty is unlikely to go to the artists if the record labels get their hands on it.

"If the goal is to improve the circumstances of performers and build the cadre of music into the future, the relationship between performers and record labels also bears examination," Rehr said.

RIAA officials declined comment on the letter, but one industry executive wondered if the labels should request a hearing examining the relationship between the NAB and its members.

The MusicFirst Coalition, a group that represents artists and labels on the issue, said the NAB's tactic was a bait and switch.

"This is a classic tactic when your position is indefensible; you try and change the subject," MusicFirst Coalition spokesman Tod Donhauser said. "Broadcasters on the AM and FM dial have made billions of dollars on the backs of hardworking performers, session musicians and background singers. This is just another example of NAB attempting to prolong something that is widely recognized as fundamentally unfair."
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