In one case, radio broadcasters are lobbying against some possible changes in intellectual property law. Recorded music embodies several separate intellectual property rights - copyright, which covers the authors/composers of music, performance rights, which covers the artist's performance of that music, and mechanical reproduction rights, which address the right to make and sell copies of performances. The last, mechanical reproduction, are held by the record companies. And broadcasting has always had to pay for copyright permissions. However, in the early days of radio, there was an informal quid pro quo on performance rights and radio that became formalized in copyright law - since radio was (and still remains) the ore-eminant promotional tool for music, artists and labels waived performance rights fees to maximize radio's capabillity to play new artists. The logic behind this is solid - adding performance rights fees to copyright fees raises the costs of music to stations. This may be less of a problem with music that has an established value, as long as that value is higher than the rights costs - but it will discourage playing of lower valued (special interest or limited interest) recordings, whose value is less than the costs of rights fees, and new music whose value is uncertain. Positive costs in terms of rights fees will discourage broadcasters from serving minority tastes, and reduce stations' interest in airing new music from new artists (where the value of that music is unknown and uncertain.
On the other media, most other media channels, where music is often more peripheral to their main service value, has been paying performance rights.
The music industry, who short-sightly sees this as a new revenue stream for existing music catalogs, has been pushing Congress to overturn what amounts to radio's waiver from paying performance rights. It may be "fair" to treat all media the same, but not all media have served as a primary (and free) promotional tool for the industry. Adding costs through adding rights fees may generate more revenues for the performances that artists have already recorded. However the vast bulk of revenues for music companies and artists comes from reproduction rights, not copyright or performance rights. And the added costs of performance rights will likely have a negative impact on the demand for new performances and recordings - as radio outlets reduce the amount of new recordings played, and as artists and labels would likely have to pay more to get new music out in front of potential audiences and consumers.
There are two competing bills circulating in the House. A draft of the proposed "Interim FIRST Act" authored by Democrat Jerrold Nadler was released this week, and would force cable and satellite radio stations to pay performance rights, and would require online streams from broadcast radio stations and other Internet radio services to pay performance rights at an even higher rate. While proclaiming that it would level the playing field and treat all players equitably, it would embody three different sets of rates - broadcast radio, which would still be exempt; cable and satellite radio, which would pay one rate for performance rights, and online and Internet radio (including streams of broadcast stations) which would have to pay a still higher rate. Republican Jason Chaffetz is working on a bill that would impose the same performance rights fees on all digital music sources - cable and satellite radio, Internet radio stations, and music streaming services. It would also call for the rates to be negotiated between music outlets and the music industry, rather than being set by a Federal tribunal.
While broadcasters would prefer to avoid paying performance rights fees altogether, they are more supportive of the Chaffetz approach rather than the Interim FIRST Act - and the latter's attempt to make broadcast radio stations pay more for their digital streams that other digital music outlets.
The NAB and broadcasters are simultaneously continuing to lobby for legislation that would require smartphones to be capable of receiving and playing FM radio broadcasts. Most smartphones already have a chip built into their devices that would do that, but that application is turned off by virtually all U.S. wireless operators. The initial arguments were phrased as a trade-off for reintroducing performance rights fees. Broadcasters are adding a new argument - public safety. They point to the role that radio plays as the primary means of distributing information to the public during natural disasters or other emergencies, when normal information services are interrupted. In filings to the FCC, the NAB argued that most broadcasters have built-in redundancy in case of emergency, and that the broadcast nature of their service and the widespread availability of receivers make radio particularly well-suited for emergency communications. Besides, it's already the designated government Emergency Broadcast System.
"It is time to seriously consider steps needed to improve consumer access to free, over-the-air radio via smartphones and other mobile devices," (the) NAB said.While analysts generally doubt that activating FM chips in smartphones will dramatically change radio and music listening behavior, it at least expands the options for consumers. And its likely that it could prove useful when traditional communication channels (and wireless service in particular) is interrupted.
Sources - Nadler circulates draft legislation on music royalties, The Hill
NAB: Broadcasters Are Answering Call for Reliable Emergency Info, Broadcasting & Cable
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