This is the first public response to the push by MusicFirst and its allies in Congress on behalf of H.R. 848, the “Performance Rights Act.” The package was presented to the NAB Radio Board and group heads during an extraordinary meeting in Washington today (8/6). NAB’s Dennis Wharton says there is an “ongoing dialogue” with the board and its membership, and that no votes were taken at the meeting. For negotiating purposes, here are the NAB’s “proposed terms under consideration”:
#1, “A tiered rate of 1% or less for all net revenue (roughly $100 million for the industry) which is permanent and cannot be adjusted without changing statute or by mutual agreement.”
#2, Permanent removal of Copyright Royalty Board jurisdiction over rates for both terrestrial and streaming.
#3, Streaming rate reduction from current rates.
#4, Inclusion of radio chips – FM – in all mobile phones. (That would mean the record industry would support the broadcasters' campaign with manufacturers and wireless carriers for “FM-in-cellphones.”)
#5, AFTRA issues to be resolved on ads that air on webcasts. (Important since the extra AFTRA fee for streaming discourages many stations from airing ads produced by union talent.)

The “tiered rate” for use of music begins at a maximum of 1% per year for commercial stations with revenue of more than $1.25 million. It would scale down to $5,000 for commercial stations with revenue of $500,000 to $1.25 million. Commercial stations with revenue of $100,000-$500,000 would pay “the lesser of $2,500 of 1% of revenue.” Commercial and non-profit stations with revenue between $50,000 and $100,000 would pay $500. Non-profit stations with revenue of more than $100,000 would pay $1,000. News, talk and sports stations would not pay for the use of music. The NAB’s goal is to head off much more onerous terms from a lame-duck Congress after the November elections. Next up: the response of the music industry, which believes that in addition to the hundreds of millions that radio pays to ASCAP, BMI and SESAC, the performers should also be compensated. The labels would keep about 50% of the new performance royalty, and many details would need to be worked out about which kinds of performers would be cut into the new revenue stream.