Background
For the past 70 years, radio has enjoyed a symbiotic relationship with the recording industry. The record labels and artists enjoy the free promotion of their music over the airwaves in a variety of venues, launching the careers of rising stars and ultimately increasing the profitability for the record labels.
Composers and songwriters are compensated through royalties collected by ASCAP, BMI and SESAC for the performance of their recorded music. The record labels and artists are compensated for their work in the sales of their recorded music, concert tickets and other promotional items.
In 1995 and 1998, Congress passed a limited performance tax on the digital delivery of recorded music, specifically to compensate record labels and artists for harm to record sales that might occur from downloading and recording digital music. Local AM and FM radio and non-digitally delivered music were specifically not taxed for many reasons, including Congress’ recognition of radio’s unique role in providing free entertainment, local news and public service programming designed to help the community, as well as the fact that radio play benefits rather than harms the revenues of the record labels.
Now, the record labels have come back to Congress asking to expand the performance tax to ALL public airings of recorded music, including radio, regardless of the fact that music broadcast on local radio cannot be captured for perfect reproduction and that such airplay actually helps make record labels profitable.
The Free Radio alliance has been formed to provide a united force in opposition to the recording industry’s efforts to subsidize their failing business model on the back of local radio stations and others that publicly air pre-recorded music.
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