While listening to the radio en route to work, a commercial played opposing bills that would levy a performance tax on local radio.
H.R. 848, also known as the Performance Rights Act, is one of the bills being pushed by record labels that would seek to impose a fee on local radio stations to play their music.
The way the system works now, stations pay songwriters and composers copyright royalties to air their music, but no fees to the actual performers.
For more than 80 years, radio and the record industry have enjoyed a mutual relationship where the stations air music free of charge in return for the free promotion of the artists, who earn money based on this exposure in the form of record sales, merchandise and live performances.
Economists estimate that radio’s free promotion translates into as much as $1.5 billion to $2.4 billion in music sales annually, which does not include merchandise or performance earnings. While record companies are struggling in the current economy, radio broadcasters are already between 10 percent and 40 percent in revenue because of new media competition.
Record companies promote the belief that revenue from this tax would solely benefit the artists. However, in reality the labels themselves would receive at least 50 percent of the proceeds. This performance tax would threaten the local radio stations that have always been free to everyone, regardless of income.
According to noperformancetax.org, analysts estimate that this tax could cost radio $2 billion to $7 billion annually, financially destroying many stations, stifling new artists and preventing the public from access to free and diverse radio.
Additionally, local radio is required to fulfill certain public service obligations not required by other platforms, generating nearly $6 billion in public service annually.
Nearly 106,000 Americans are employed by radio stations. A performance tax that would likely shut down many stations and would likely ultimately result in lost jobs in an economy already struggling with unemployment.
Bills have been introduced in support of what is being called the “Local Radio Freedom Act.” However, coverage has been limited.
Local radio stations including 107.9 FM have been airing commercials since January encouraging listeners to write their local politicians in support of the Local Radio Freedom Act, which claims that politicians are attempting to have the bill passed by attaching it to other bills they deem more likely to get passed.
