So here are the details leaked so far…. as the NAB creates its fantasy of what it thinks a perfomance royalty deal would look like.
1) Requirement that all Mobile phones be required to have an FM receiver
(Copyright law has no jurisdiction over required capabilities of electronic devices – that’s the FCC’s responsibility)
2) Remove the power from the Copyright Royalty Board to set rates
3) Settlement of the AFTRA royalty issue on streaming ads
4) Payment of up to 1% of net revenues for music stations (news, talk and sports would be excluded) for a total of $100 million. Estimates within the radio industry were the Performance “Tax” bill would cost the industry between $400 million and $7 billion Since the total revenue of all radio (including news/talk/sports) is around $14 billion a year, those numbers seem highly improbable, to induce fearmongering…..
As a point of comparison, when the NAB was urging SoundEchange to “stick it” to Sirius/XM, the CRB decided on 6% of gross revenues (not net revenues) for the first two years, and then increasing .5% per year until it reaches 8%. If that were applied to terrestrial radio, it would be about $800 million a year… (or $1.2 billion if radio recovers to pre-crash levels)…
Also probably worth noting – there was no vote of the NAB board on this proposal – so the NAB could later repudiate it and say it was never a real proposal. Also, Gordon Smith was not the one presenting this to the press – it was released via a spokesperson. It’s within the realm of possibility that Gordon Smith could meet the same fate as the prior President David Rehr who resigned suddenly in May of 2009.
