Big record labels are lobbying Congress to support the American Music Fairness Act (AMFA), legislation that would impose new fees on local radio stations without considering local radio’s unique role in the music licensing ecosystem or its value to communities.
The AMFA’s backers claim the bill “protects” local radio by making this new fee smaller for a handful of the smallest radio stations. The broadcasters who run these stations have been loud and clear in rejecting this claim.
Greg Davis, CEO of Georgia’s Davis Broadcasting, wrote to Congress to let them know how this legislation would “inflict significant harm on my stations and the thousands of other local radio stations that serve America’s communities every day.”
Davis shared his concern that these fees would only start smaller and increase over time. “From my experience in operating radio stations, I know that costs rarely stay the same or decrease over time. Instituting a performance fee – no matter how nominal at first – would most certainly lead to ever-rising fees over time, regardless of a broadcaster’s size.”
“A performance royalty could also put a lid on success,” he said, “and taper small broadcasters’ dreams of growing their businesses.”
Local radio stations of all sizes have a special role in reaching underserved audiences. Amador Bustos, founder, president and CEO of Bustos Media, described the “unique and vital service” his stations provide in reaching a number of diverse linguistic audiences. “Many of these stations’ audience are non-English speakers and will be underserved by general market media. During the COVID-19 pandemic, during major fires and hurricanes Bustos Media stations have played an outsized role in keeping these listeners safe, informed and healthy,” he said.
Bustos is also concerned that “any additional performance tax or royalty could significantly impact my stations’ already thin margins” and that “with no cap on a performance royalty, there is a clear danger this $500-per-year could be thousands in a few years.”
Of course, these small stations are not the core targets of the legislation. Thousands of stations are being targeted for significant new fees that endanger vital local services. These stations, many owned by medium-sized Main Street businesses that provide jobs across the country, bring their communities daily news, weather and traffic, urgent emergency alerts – and the entertainment medium with the widest reach to American households.
While struggling through the impacts of the COVID-19 pandemic, they used their reach to help local small businesses stay afloat. Radio stations owned by the smallest family businesses to the largest groups operate under licenses that require them to serve the public interest, and stations take this obligation seriously as they provide public service programming, work with emergency responders and bring you the news you need. Untenable new fees will harm this vital service and the listeners who rely on it.
Meanwhile, new performance fees would pad the revenues of major record labels at the expense of these smaller businesses. In fact, the market capitalization of any single one of the three major record labels is greater than that of the nine largest publicly traded radio companies combined.
Tell Congress to offer local radio real protection by cosponsoring the Local Radio Freedom Act to oppose these burdensome new fees.