NAB's Gordon Smith invites record labels back to the table


After stopping a performance royalties bill last year that threatened to take billions from radio stations and hand the money to the major record labels, NAB President and CEO Gordon Smith applauded the successful effort by broadcasters and their congressional allies. But as he spoke Tuesday at the NAB Show in Las Vegas, Smith said NAB is still willing to negotiate.

“Last year we stopped the legislation that would impose a performance tax on local radio stations. This was a freight train headed for passage,” Smith said. But broadcasters rallied 260 members of the House of Representatives, both Democrats and Republicans, to their side.
“With their help and that of broadcasters across America, we brought the freight train under control by seeking a good faith, workable agreement with the music industry, while at the same time aggressively opposing the bill as written. Our objective was to make certain that if something passed, it provided a bright future for radio.”

That led to negotiations which almost produced an agreement. “We offered to compensate record labels and performers if they would help us get broadcast radio on every future cell phone, which is important not only for entertainment, but more importantly, to provide the public with an effective emergency alert warning system. In the end, the record labels rejected our offer, but the performance tax bill also died. We remain open to discussions. We’re still at the table, and we hope the other side comes back,” Smith concluded.

Despite the lack of a final agreement, Smith said the negotiations with RIAA changed how NAB is perceived inside the Beltway.

“Until last year, NAB was viewed on Capitol Hill as The House of No – almost no matter the issue – which is not a long-term strategy for success, especially when trying to navigate the political minefields in Washington. In politics, we always say you can’t beat something with nothing. With this new flexibility, we now find ourselves in a position of greater strength and credibility among policymakers. And this will serve us well, I think, as we shape radio’s future, which remains very bright indeed,” said the former US Senator who now heads NAB.

RBR-TVBR observation: We find it strange that the record labels haven’t come back with a new strategy. Certainly the previous Congress represented their best chance to get the Performance Royalty Act passed – and in the end they overplayed their hand and blew it. But that doesn’t mean they don’t have any cards left to play. Very strange.