Gordon Smith, the former Oregon senator who is now the head of the National Assn. of Broadcasters, undoubtedly has injected no-holds barred rhetoric into some of the more contentious debates raging between the the industry and federal regulators.
And in a speech on Monday at the broadcasters’ convention in Las Vegas, he was especially combative when it came to a law that is pending before Congress that would require that radio stations pay performers when they play their songs over the air. As my colleague David Cohen points out, Smith called it a “bailout of the major recording companies, three of the four largest of which are foreign owned.” Referring to the record industry’s efforts to sue individuals who download illegal music, he even borrowed language from Sarah Palin, asking, “How’s that lawsuit thing working?” And he and others at NAB have been insistent in calling the royalty a “tax.”
But Smith was a slightly more tempered in a recent interview he gave to Inside Radio, in which he even raised the prospect of a compromise with artists and record labels. The idea is to lower the royalty payments that broadcasters already pay for online streaming of music and instead directing that money to royalties for airplay.
Smith says, “The suggested thinking is that maybe there is some compromise between the two: a lower price on one for some compensation on the other. But there’s no agreement at this point. It’s smart to talk to people but at the same time I don’t believe it is wise to stop making your case to policymakers because the performance tax really does translate into the devastation of local jobs and vital information to American listeners.”
The Performance Rights Act has cleared committee, but it’s essentially in a holding pattern as lawmakers have pressed both sides to hold face-to-face meetings. Smith says that lawmakers would rather have the parties settle this intra-industry squabble on their own, but he also is tying the debate to the election year. Stations haven’t been shy about using their airwaves for an anti-royalty blitz, one that has been increasingly tied to jobs. With that in mind, Smith gives the chances of the royalty making it to the floor of either chamber as “slim to none.” He may be right, especially as this spills closer to the midterms and lawmakers increasingly pick their battles carefully.
Recording artists and record labels, meanwhile, are noting the irony of Smith’s Vegas comments, given that broadcasters are seeking more money from cable systems for the rights to carry their stations.
“Content lives for free at the NAB show, but only if it is someone else’s content,” says Marty Machowsky, the spokesman for MusicFIRST, the coalition lobbying for the performance royalty. “Broadcasters insist on being paid by cable for their content, but refuse to pay American artists and musicians for the music that is the very foundation of their business.”