More on moves in the US to make terrestrial radio stations pay royalties for the music they play. As previously reported, music radio in the US is pretty damn unusual in that radio stations get away with contributing very little to the record industry for the music they feature on their outputs. The situation came about because of the history of the radio and music industries in the States, and because for years the radio sector claimed it helped the music business by providing free marketing for their releases.
But with satellite, cable and internet radio stations - who are governed by different copyright rules and have to pay royalties - claiming that their terrestrial competitors have an unfair advantage, and with record labels who are suffering from declining CD sales increasingly relying on royalty incomes, moves are afoot to change the US radio royalty set up.
Debate on the issue has been rumbling on for much of the year, but things moved on this week when four political types - Senators Patrick Leahy and Orrin Hatch and Representatives Howard Berman and Darrell Issa - two Democrat, two Republican, introduced legislation proposals in US Congress which would see terrestrial radio stations have to start paying a music royalty, though at a fixed statutory rate of $1000 a year for small stations and $5000 a year for big stations. Talk and religious stations would be exempt, even if the former use incidental music.
Quite how those fees would be distributed to the labels, whether the broadcasters will accept such fees as being ultimately inevitable, and whether the record labels would be happy with statutory royalty fees at the proposed levels, all remain to be seen. But expect lots more debate on this issue in the US in 2008.