URGENT FOR RADIO – NAB message regarding Performance Tax/MusicFirst Coalition

The following message is
provided by the
National Association of Broadcasters 

PLEASE CLICK ON BLUE LINKS FOR ADDITIONAL INFORMATION OR CONTACT INFO

Your team of advocates at NAB want to make you aware of the record labels’ newest tactic to impose a performance tax on local radio stations. Using their Washington, D.C. front group – musicFIRST – the labels are attempting to turn radio stations against each other. Broadcasters must stand united against the performance tax bill. 

By sending emails like this to small radio stations, musicFIRST is hoping to convince stations to support a performance tax; but this is no more than a press stunt that will fall flat.

Like previous performance tax legislation, the Fair Play Fair Pay Act attempts to divide the radio industry by offering an “exemption” to small radio stations (defined as earning less than $1 million in revenues annually) that would cap fees at $500 per year.

All radio stations, regardless of size, must stand united against this legislation and its transparent political carve-outs. Make no mistake, any imposition of a new performance tax threatens the continued viability of free, local radio stations.

Here are the facts:

  • The record labels want as much money as they can get, from wherever they can get it, even if it hurts their most effective promotional tool – free, local radio. If they were to achieve a performance tax on radio, musicFIRST would then likely turn its attention to increasing the fees for all stations.

 

 
  • The performance tax bill pretends to be “small radio friendly,” but would provide a disincentive for these stations to grow and earn annual revenues (over $1 million) that would trigger higher performance taxes that would be set by the Copyright Royalty Board.
  • While a radio station earning $999,999 per year in revenues would owe the statutory cap, a station earning just $1 more would be subject to a far more burdensome performance tax set by the Copyright Royalty Board, the group that set streaming rates so high many stations can’t afford to stream.
  • If the Fair Play Fair Pay Act is passed, radio stations near the annual revenue threshold will likely have to expend money and personnel on record keeping to comply with a performance tax structure.

The bottom line: Don’t let our opponents divide radio! Broadcasters should stand united in opposition to any new performance tax. Urge your legislators to support the Local Radio Freedom Act, which opposes a performance tax on free, local radio. Remember, NAB has advocacy resources available on this issue for members, and as always, do not hesitate to contact us for further assistance.