Radio deal sparks royalties row
- 7 June 2012
- From the section Entertainment & Arts
The first deal allowing a record label and its performers to be paid for AM and FM radio airplay in the US has been welcomed by the record industry.
But the Recording Industry Association of America (RIAA) said the deal between radio giant Clear Channel and the Big Machine label was not enough.
RIAA chairman Cary Sherman said an "industry-wide solution" was required.
The US radio industry has long resisted paying royalties for sound recordings, saying its airplay boosts record sales.
Songwriters and song publishers currently receive royalties when their compositions are played on US terrestrial radio, but there is no equivalent law for labels and performers to be paid for the sound recordings.
Speaking to a Congress committee hearing on the future of audio, Mr Sherman said: "We're obviously delighted that the biggest radio group has acknowledged that something should be done and has actually gone and done something.
"That's a breakthrough. We've been advocating for this for about 80 years. But we need an industry-wide solution, not a label-by-label piecemeal solution."
Big Machine's artists include country superstars Taylor Swift and Tim McGraw.
Jazz bassist and composer Ben Allison, speaking to the committee, said: "Terrestrial broadcasters have an inexplicable 'free ride' when it comes to performance royalties."
He described the radio industry as "the only business in America that can legally use another's intellectual property without permission or compensation".
But the National Association of Broadcasters [NAB], which represents radio stations, said there was no need for legislation.
"NAB remains steadfastly opposed to a government-mandated performance tax on local radio stations," a statement from NAB said.
Broadcasters have argued that their airplay provides promotion for musicians and the extra financial pressure could force many stations to close.
A law that would have entitled rights owners to compensation was proposed in Congress in 2009.
Attempts by broadcasters and the record industry to agree a framework for the payment broke down and the plan has not made it into legislation.
In the UK, music rights society PPL distributes radio and TV airplay royalties to performers.
But under UK copyright law, US musicians who performed on a track recorded in the US do not get paid for British terrestrial radio airplay.
Jon Webster, chief executive of the UK's Music Managers' Forum, said: "In the UK, PPL undertakes the process of ensuring 4,000 record labels and 45,000 performers get the correct amount of income after they have negotiated deals with each rights user. A collective solution is best for everyone."