November 24, 2009
A new report from Washington Research Group Concept Capital says that is it becoming less likely that the Performance Rights Act, which would force radio stations to pay royalties for playing music, will become law. In recent months, the House and Senate Judiciary Committees have approved the legislation, and a meeting was held between broadcasters and record labels to engage in mediated discussions over a possible compromise. However, Concept Capital says the odds are dropping for the legislation to pass in the 2009-10 Congress. The research group reduced its estimate from 60 percent to 40 percent odds of the bill passing in the next 12 months.
The report outlines four reasons why the possibility is less likely, first saying that broadcasters are doing an effective job of building opposition to the legislation. The NAB has gotten 27 Senators and 253 House members to sign a resolution opposing the Performance Rights Act. Secondly, broadcasters have gotten traction with arguments that a new fee could have damaging consequences for a large number a radio stations – particularly in a difficult advertising environment – and that a disproportionate share of endangered stations are minority-owned.
The report also notes that we are entering an election year, and individual members are typically more sensitive to broadcasters’ policy agenda as voting season nears. And lastly, broadcasters have new leadership in Washington. Former Republican Senator Gordon Smith recently took the helm of NAB, and his stature, bipartisan reputation and skill set are a positive factor for broadcasters in the radio royalty battle.
The report from Concept Capital concludes, “We do not rule out the possibility of some kind of breakthrough or legislative maneuver that would allow the bill to move forward. The bills’ chief supporters (the Senate and House Judiciary Committee leaders) remain very committed to moving a bill. And the royalty bill has now progressed farther than it has in any prior congress, so risk clearly remains for broadcasters. But our sense is the momentum has shifted away from passage.”
