NAB to Copyright Board – Start over on digital

By on Oct, 7 2014 with Comments 2

Music-NotesThe National Association of Broadcasters says that the royalty rates attached to streamed music have nothing to do with an open competitive market, and that rates within the realm of what a willing buyer and seller would agree to in open negotiation is what the CRB should strive for.

The current rates are completely out of whack, set so high that it is impossible for distribution platforms to make any money at all.

Argued NAB, “[Most broadcasters] cannot make money on streaming, despite having made significant efforts to do so. Some have reached a business decision to limit their streaming or not to stream at all, despite the potential to expand their listening audience. For all of these reasons, a significant rate reset is necessary so that streaming can be a viable business that will allow broadcasters to provide streaming services to the audiences that rely on them and benefit from them.”

NAB continued, “The CRB should also factor in broadcasters’ services to their listeners as well as record labels and artists when setting streaming rates. Broadcasters differentiate themselves from other streaming services by offering locally focused programming to attract listeners. This programming requires the devotion of resources towards elements such as the development of radio hosts with whom listeners can connect, production of non-music programming such as news and emergency information, and support for community services. Radio stations provide enormous promotional leverage for record labels and artists that supports album sales, concert attendance, and other revenue streams.”

“[L]abels and artists devote immense resources to securing spins on radio,” said NAB. “In addition, labels seek to harness the influence and relationships that radio stations and on-air personalities have built with their listeners and local communities in order to promote sound recordings.”

NAB also pointed out that weighing rates by market size is very important and an accurate reflection of market realities. It is impossible for most to attract enough advertising to even begin to defray current streaming royalty costs, and in their case, a flat rate makes sense.

About The Author: RBR+TVBR has been reporting on the business of broadcasting for nearly three decades. Beholden to no one, it is independently owned.

  1. Broadcasters these days are greedy. The model of earning revenues on advertising is sufficient. Compulsory licensing did not hinder the growth of music, radio and/or television, and it won’t do so in the future.

    If a TV station feels its income is insufficient, either donate the license to a non-profit or simply hand it back to FCC for other applicants in the future.

    The broadcasters are weeping similiar to when there was legislative talk to re-instate the old “must carry” rule which provides for no compensation for being carried on local cable and DBS services.

    In the final analysis, an FCC television license priority is for the benefit of the public, and not the economic profits of the license-holder; the latter is secondary — not primary.

    • jeff schumann Says:

      Steve,

      I agree with you on this. But I find the convenient that the FCC has the law struck down “must carry” before the selling of the frequencies. It is the FCC oh I’m sorry the cable and wireless people’s demand that free TV be taken away because there is no money in it for them. That is where the real greed is taking place. The fact that wireless services don’t need this bandwidth. They need more infrastructure.

      What is happening in a form of bribes to take frequencies away from the people who own it “us, we the people” own these frequencies! Why doesn’t the FCC understand this. But congress needs more money in their personal pockets and free TV doesn’t, but the bandwidth will provide them with more wealth in their pockets. It bribe system that we work in now!