More Calls To Change Radio Royalty Rules

On Wednesday, the House Judiciary subcommittee heard from more executives that the licensing system is broken, and once again there was no agreement on how to fix it.

The NY Times reports nine witnesses, including representatives of record labels, broadcasters and technology companies like Pandora Media, along with the singer-songwriter Rosanne Cash, spoke about the patchwork of laws and regulation underlying the music business, and the strange disparities that have resulted from this system.

The most vigorously debated topic was AM/FM radio stations’ longstanding exemption under United States law from paying royalties to performers and record companies. These stations pay songwriters, but, unlike stations in almost every other country, do not pay for the recordings they play. This has long angered record companies, but the law has become especially contested in the age of Internet and satellite radio, which pay both kinds of royalties.

Charles M. Warfield Jr., the joint board chairman of the National Association of Broadcasters, defended the practice, saying, “Our unique system of free airplay for free promotion has served both the broadcasting and recording industry well for decades.”

Radio's Case: Don't Rock The Boat

Ed Christian, the chairman of the Radio Music License Committee, which represents broadcasters in royalty negotiations, took a harder swipe at the issue. “The radio industry is not some vast pot of riches,” he said, “that can be tapped as a bailout for a recording industry that has failed to execute a digital strategy.”