A Look Inside Proposed Performance Royalties For U.S. Broadcast Radio

A draft of proposed terms of a deal that would see U.S. radio broadcasters pay performance royalties to record labels and musicians have been made public by the National Association of Broadcasters and Music First. While not a final agreement, it provides insight into the negotiations which would bring American broadcasters more inline with payments in other developed countries. Highlights

• Tiered rate of 1% or less for all net revenue (roughly $100 million for the industry) which is permanent and can not be adjusted without changing statute or by mutual agreement;
• Permanent removal of CRB jurisdiction for terrestrial and streaming
• Streaming rate reduction from current rates
• Inclusion of FM radio chips on all mobile phones
• AFTRA issues resolved (agency commercial replacement on webcasts).
• Payments from broadcasters would be as follows:

• • Commercial and non-profit stations with revenue less than $50,000 annually would pay the lesser of $100 or 1% of revenue annually;
  • Commercial and non-profit stations with revenue between $50,000 to $100,000 annually would pay $500 annually;
  • Non-profit stations with revenue more than $100,000 annually would pay $1,000 annually;
  • Commercial stations with revenue between $100,000 to $500,000 annually would pay the lesser of $2,500 or 1% of revenue annually;
  • Commercial stations with revenue between $500,000 to $1,250,000 annually would pay $5,000 annually;
  • Commercial stations with revenue more than $1,250,000 annually would pay 1% of revenue annually.

Stations with incidental music use – news, talk and sports radio – would not pay for music, and religious services though not religious music would be exempt.