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Big Radio Descends on Capitol Hill

01 March 2017

Big Radio leaders are descending on Capitol Hill this week with one goal – to protect their massive government subsidy for FM radio.

The radio barons’ bill, the “Local Radio Freedom Act (LRFA)” – H.Con.Res 13 // S.Con.Res 6 – is a misleading and dated effort to protect a decades-old subsidy that guarantees that large radio conglomerates don’t have to compensate artists for the music that sustains their entire business.

Artists deserve to be fairly compensated on whichever platform their music is played. Traditional radio deserves no advantage over satellite and streaming services, which provide greater access for consumers to a wider spectrum of music, including new artists.

This week the radio barons will tell lawmakers that their bill supports “local radio”, by stopping a “tax” on them. First, the idea of “local radio” is misleading – 10 companies are responsible for 50% of the revenue generated by radio and the industry saw a 27% profit margin in 2015. In addition, any performance right Congress creates would have wide exemptions for truly local radio stations, in addition to non-profit, religious and college stations. Second, groups including Americans for Tax Reform, Taxpayers Protection Alliance and Citizens Against Government Waste have publicly denounced the idea that large radio conglomerates compensating artists is a “tax”.

Big Radio makes billions by playing (predominantly older) music, but consumers are flocking to new, innovative digital services that DO compensate artists. So we totally understand why they are fighting so hard to maintain their huge advantage over these digital and satellite competitors. But time, reality and the market are catching up to Big Radio. It simply defies logic and all market principles that radio is the ONLY platform in the U.S. that delivers music to consumers and does not compensate artists. And Congress has taken note.

To make matters even worse, the U.S. stands alongside China, Iran and North Korea as one of only a handful of countries that still fails to recognize a radio performance right for music creators. Because we lack this basic right, the U.S. economy misses out on bringing home more than $200 million a year in performance royalties that are owed to American artists from the foreign radio stations that play their songs for profits overseas. We need to repatriate this revenue owed to American creators.

So this week, we encourage lawmakers to look at the fine print of the cleverly-crafted LRFA resolution, which has been reintroduced year after year by the National Association of Broadcasters. We encourage lawmakers to stand up to the radio barons by refusing to cosign or support this misleading and meaningless resolution. Encourage Big Radio to work with Congress and creators to seek solutions and stop wasting time on meaningless “resolutions”.

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