Staff Report | News

Act could bring music taxes to radio stations

Radio stations in America may soon be charged a fee to play music.

Last month, the Performance Rights Act, a bill sponsored by U.S. Rep. John Conyers, D-Detroit, was approved by the House Judiciary Committee by a 21-to-9 vote and currently awaits the House floor’s approval.

If approved, AM and FM radio stations would be obligated to pay a yearly fee for playing songs: half of which would go to the artist and the other half to their label.

“It is not a tax, it is a right,” said John Godfrey, spokesman for the House Judiciary Committee. “This is the only fair and right thing to do.”

The bill proposes stations with annual gross revenue of less than $100,000 would pay $500 each year. Stations with gross revenues between $100,000 and $500,000 would pay $2,500 and stations between $500,000 and $1.25 million would pay royalties of $5,000 per year.

Non-commercial stations such as talk and college radio that gross less than $100,000 per year would have to pay a $500 annual fee and those that gross $100,000 or more would have to pay a $1,000 fee.

Carsonville junior Dominic Fracassa, who will be the station manager for Modern Rock 91.5 – WMHW in the fall, said it is tough to say whether or not the bill would affect the non-commercial radio station.

Fracassa said it is something to certainly be concerned about.

“It definitely wouldn’t be a good thing for us,” he said. “We’re not exactly rolling in high revenue.”

If the station’s revenues are less than $5 million annually, the fees wouldn’t start for three years, Godfrey said.

Godfrey said that in every other developed country, musicians get compensation for radio time and this is fair to the artist and label because online radio organizations pay royalties to artists.

“Broadcasters refuse to admit that even one dime should go to the musicians and frankly, I feel that’s unbelievable,” he said.

The bill has stirred up controversy from many in the radio industry.

Dave Maurer, operations manager for five radio stations in Saginaw, including 94.5 The Moose-WCEN, said forcing radio stations to pay artists is highly unfair and could be devastating to the economy.

He said he knows many people in the radio industry who have contacted Congressmen to voice concern over the bill.

“I’ve been in this business for 42 years and it was always free,” he said. “We played artists music and now they’re multimillionaires for it. To come back and tax us is ludicrous.”

Maurer said the bill could potentially force many stations to move to a spoken word format and could also be damaging to the artists because fewer stations will play their music.

Lansing senior Michael McArthur, who hosts and produces the hip-hop and rap show “The Urban Exchange” on Modern Rock 91.5 WMHW, said the bill could be terrible for the radio industry.

He said if stations play less music, artists will have a harder time making a name for themselves, especially newer artists.

“The labels are looking for more ways to get more money, with all the pirating, but they’re going about it the wrong way,” McArthur said. “I don’t think it’s a good idea at all.”

news@cm-life.com

E-mail the author: Joe Borlik

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