Music Industry Takes on Traditional Radio

Music industry and traditional radio stations are about to start butting heads in another royalty battle starting up on Capitol Hill.

On July 31, House Subcommittee on Courts, the Internet, and Intellectual Property will hold Congress’s first hearing to determine fair performance rights fees, if any, for traditional radio.

The music industry wants traditional radio, until now playing music without paying any royalties, to start paying up. After all, satellite and Web radio providers already pay royalties. Naturally, traditional radio stations argue they shouldn’t have to pay, as they help consumers discover new artists and song — and drive music sales.

This promises to be one ugly battle. Already, on July 30, the National Association of Broadcasters (NAB) and musicFIRST Coalition representing the music industry exchanged opening shots. The NAB issued a report trying to disprove a univeristy report, alleging that radio play eats into the music industry’s sales. musicFIRST fired back with a report showing that traditional radio’s revenues have grown from $15 billion in 1998 to nearly $20 billion in 2006.

It will be interesting to hear the tone of tomorrow’s hearing for indications of where and how this battle is going to go.

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