Radio at Risk
For more than 80 years, radio and the recording industry have enjoyed a mutually beneficial relationship: free play for free promotion. And it works. It's a relationship that has sustained businesses on both sides.
In fact, radio's free promotion of artists translates to as much as $2.4 billion annually in music sales for record labels and artists. And this doesn't even include the enormous revenues they receive from concerts and merchandising.
But the labels – like many businesses – are struggling in this economy. They have failed to adapt to the digital age, and find their business model is broken. In the 111th Congress they unsuccessfully pushed for the Performance Rights Act to impose a fee on local radio stations to subsidize their losses.
This bill, if passed, would have threatened the local radio stations that communities depend on. It would have financially hampered stations, stifled new artists and harmed the listening public who rely on free local radio. The record labels may attempt to move similar legislation in the 112th Congress.
But many members of Congress are already standing up for local radio by sponsoring the Local Radio Freedom Act which opposes a tax on local radio. This resolution, introduced in the 111th Congress, garnered more than 300 cosponsors. Make sure your member of Congress supports the Local Radio Freedom Act. Click here to view the most current list of radio champions!
Where would the money go?
In short, the money generated from the performance tax would flow out of your community and into the pockets of the major record labels – and three out of the four are foreign-owned. The record labels would like for you to think their effort is all about compensating the artists, but in truth the record labels would get at least 50 percent of the proceeds from a fee on local radio.
How does this affect me?
If you're one of the 241 million people who listen to radio each week, the Performance Rights Act could reduce the variety of music radio stations play, and all but eliminate the possibility of new artists breaking onto the scene. This legislation could particularly affect smaller, minority-owned stations, some of which may have to switch to a talk-only format or shut down entirely.
It also affects your community. Radio stations are major contributors to public service – generating $6 billion in public service annually, providing vital news and community information and free airtime to help local charities. If a fee were imposed, stations' critical community service efforts could be reduced.
And, worst of all, if you're one of the 106,000 Americans employed by local radio, your job could be in jeopardy. In these troubling economic times, the last thing local radio needs is to be hit with a tax that some analysts estimate could be $2-7 billion annually.
Free Play For Free Promotion
Congress has continually recognized that local radio is different from other musical platforms and should not be subject to a performance fee. Local radio is free, so everyone, regardless of income, can have access to it. Local radio also has to fulfill certain public service obligations that other platforms do not. And importantly, the free music that radio plays provides free promotion to the record labels and artists – up to $2.4 billion annually.
Tell Congress to Support Local Radio
It is anticipated that the record labels will once again attempt to pass a Performance Rights Act in Congress that would levy a performance tax on local radio. Your members of Congress need to hear that you strongly oppose a performance tax, which would hurt local listeners and local stations. You should also encourage your representatives to support the Local Radio Freedom Act which opposes a tax on local radio. Click here to view the most current list of radio champions! Keep radio strong for our communities!