The recording industry and the National Association of Broadcasters have been battling for years over the so-called “performance tax,” which would require radio stations to pay royalties to artists whose music they play on air. Currently broadcast radio stations are exempt from paying the royalties, also known as performance rights, while satellite and cable radio stations are forced to pay up.
Now Congress is considering a bill that would impose a performance right free on radio stations for every song they play, bringing the U.S. in line with practices around the world. But the National Association of Broadcasters is not giving up without a fight. NAB has made a series of commercials available to its member stations that encourage viewers to call their congressmen and speak out against the performance tax.
The spots began airing on President’s Day and have reportedly been aired more than 40,000 times to date. That sort of air time would normally cost big bucks — as much as $70 million, according to one expert. But the NAB isn’t planning to file any disclosures on the lobbying efforts. Because they aren’t paying for the air time.
The NAB, which did not respond to a request for comment, is classifying the commercials as public service announcements, allowing member stations to air them free of charge and without disclosure. In doing so, the NAB is taking advantage of a loophole in FCC regulations that gives stations an unusual amount of latitude in determining what constitutes a PSA. The FCC did not respond to a request for comment.
UPDATE: A spokesman from the NAB sent the following: “We have instructed every radio station that runs the spot to disclose these airings in what is known as a station’s “public file” (which is open for inspection by the public on a quarterly basis).” He added that if passed, 50 percent of the revenue from the performance tax would go directly to the four largest music labels, three of which are based outside the U.S.
He also said the following disclaimer was featured prominently on the site where the video was posted for downloading:
“Important reminder: Any spots stations air that are considered “issue advocacy” must comply with all FCC and FEC requirements, including on-air sponsorship identification and public file disclosure. NAB recommends that stations fill out a Performance Tax Public File Form and place it in their public file. Please consult your station counsel with any questions.”
“We obviously think the ads are incredibly misleading,” said Marty Machowsky, spokesman for MusicFirst, a coalition that supports the bill. He said radio stations have also refused to run ads from MusicFirst and one station in Texas threatened to blacklist any artist who supports the performance right.
If an advertisement is aimed at a particular candidate or issue on the ballot, it is deemed political and necessitates filing a disclosure. Since the spot below doesn’t fall into those categories, it appears that NAB may have found a way to get their message out without doing so. Take a look at the spot and decide for yourself if it’s a public service announcement or a political ad.
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