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In an email blast that went out this morning, the musicFIRST Coalition, the group organized to pursue a performance royalty on radio broadcasters for the use of music in their over-the-air broadcasts, announced that they would be holding a rally and concert with a member of the 1960s rock band the Monkees, musically backed by three Congressmen.  Mickey Dolenz of the Monkees will be backed by a band featuring two Democratic Congressmen and a Republican in a concert to be held in the Capitol Building's Visitor's Center at 4:30 in the afternoon - presumably so that other Capitol Hill staffers will stop by and attend the rally.  While this is not the first concert to be held in support of the royalty, this one comes after some in the broadcast industry have suggested that the push for the royalty is dead for the year, given the fact that the NAB has well over half the members of the House of Representatives signed onto a non-binding resolution opposing the royalty.  The concert, plus the recent letter from the Copyright Office in support of the broadcast performance royalty that we recently wrote about, show that the campaign from the supporters of the royalty has not diminished, but instead continues unabated.

Some in the broadcast community have suggested that, given the major issues that are pending before Congress and the fact that the Congressional schedule will likely be tight in the fall in advance of the November elections, there was not time for this issue to come up this year.  But there are still many opportunities for the issue to be considered - either as part of some other legislation, or perhaps in the "lame duck" session of Congress after the elections but before the new Congress is convened in January.  During that lame duck session, Congressmen who are not returning to Washington, either through retirement or after an election defeat, can be unpredictable,  Thus, broadcasters need to continue to be on alert for possible action in this area, and need to continue to talk to their local representatives to combat the "star power" that the recording industry can muster to visit the halls of Congress.

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In the last two weeks, we have seen Capitol Hill rallies by the Free Radio Alliance, opposing what they term the “performance tax” on radio, and yesterday by the Music First Coalition, trying to persuade Congress to adopt a performance royalty on the use of sound recordings for the over-the-air signal of broadcast stations. We’ve written about the theories as to why a performance royalty on sound recordings should or should not be paid by broadcasters, but one question that now seems to be gaining more significance is the most practical of all questions – if a performance royalty is adopted, how would broadcasters pay for it?

 The recording industry and some Congressional supporters have argued in the past that, if the royalty was adopted, stations could simply raise their advertising rates to get the money to pay for the royalty. While we’ve always questioned that assumption (as, if broadcasters could get more money for their advertising spots, why wouldn’t they be doing so now simply to maximize revenues?), that question is even harder to answer in today’s radio environment. With the current recession, radio is reporting sales declines of as much as 20% from the prior year. Layoffs are hitting stations in almost every market. In this environment, it is difficult to imagine how any significant royalty could be paid by broadcasters without eating into their fundamental ability to serve the public – and perhaps to threaten the very existence of many music-intensive stations. And the structure of the royalty, as proposed in the pending legislation, makes the question of affordability even harder to address.

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