In what research firm Stifel Nicolaus’ regulatory analyst David Kaut has called “ a crack in the dam,” the National Association of Broadcasters (NAB) has released a supposed framework of a deal whereby over-the-air radio stations will pay an annual performance fees of approximately $100 million.
Thus far, for over seven decades, the over-the-air radio stations have been playing music without making any payment to the performers who recorded the songs. Though recording labels and musicians have been seeking performance fees, broadcasters have always put forth the argument that the stations provide notable promotion for artists, and that small stations may run out of business if they have to pay a fee.
However, according to the NAB outline - which will require congressional approval even if the NAB and the Recording Industry Association of America (RIAA) reach a compromise -, the bigwig stations will pay a performance fee of 1 percent of net revenue; while the smaller stations will either pay or smaller fee or no fee at all.
The performance fee issue has regularly been discussed by the NAB and the RIAA since February, with both the House and Senate judiciary committees having last year approved bills that would require performance fees for broadcast radio.
Hailing the NAB outline for performance fee, Mitch Bainwol, CEO of RIAA, said that the proposal “signals a new day where two very significant sectors that should be partners ride off together in a productive way.”