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Lawmakers support bill that would deprive musicians of royalties from radio stations

The "Local Radio Freedom Act" is receiving broad support in both chambers of Congress. Should it?

The "Local Radio Freedom Act" is receiving broad support in both chambers of Congress. Should it?

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A bill that would prevent the imposition of performance-based royalties on broadcast radio stations that play copyrighted music has received broad bipartisan support in Congress.

The “Local Radio Freedom Act” (LRFA) would permanently ban Congress from demanding radio station owners pay musicians a performance royalty whenever their songs are aired on AM and FM stations across the country.

Under the current system, radio station owners pay songwriters a fee in exchange for the privilege of airing music on stations. But the performers themselves are not owed anything, and the Local Radio Freedom Act would ensure this remains the case for the foreseeable future.

Lawmakers who support the bill say it is necessary to keep the struggling radio industry afloat at a time when consumers are increasingly moving toward streaming services and other ways to listen to music. They see nothing wrong with the current system, which is described as “free play for free promotion.”

“For more than 80 years, radio stations and the recording industry have enjoyed a mutually beneficial relationship: free airplay for free promotion,” U.S. Senator John Barrasso said in a statement. “If forced to pay a performance royalty, broadcasters will have to make cuts to important programming in order to make ends meet.”

The radio industry likes to promote itself as the most-consumed media format in America, with greater reach than television and streaming media platforms. In October 2023, Cumulus Media’s Westwood One even claimed that radio’s overall ratings topped that of traditional broadcast TV, suggesting radio is a more-consumed format than any other.

Despite this, the AM and FM radio industry has struggled to generate revenue through advertising sold against its music and talk programming. The reason? Despite casting a wider net, radio lacks the ability to target specific consumers with brand awareness the way digital platforms like streaming video and audio can.

The end result is a shift in marketing dollars away from traditional forms of broadcasting — including radio — something that the industry doesn’t hide when it comes to various legislative efforts meant to provide a lifeline to what is otherwise a struggling format.

To that end, broadcasters and their main lobbying arm, the National Association of Broadcasters, have pushed two legislative efforts that are designed as a life raft keeping the traditional radio industry afloat. The Local Radio Freedom Act is one of those initiatives — a measure that cuts musicians out of royalties (unless they are songwriters), while allowing radio stations to generate money from the very content that draws listeners in.

“A new job-crushing performance fee on local radio stations would hurt stations’ ability to provide their free, essential service in communities across the country,” Curtis LeGeyt, the President of the National Association of Broadcasters, said in a statement last year. “We appreciate the more than 150 members of Congress that have already signed onto this critical resolution this year and stood alongside broadcast radio and our tens of millions of listeners.”

That number has grown over time, with more than 225 co-sponsors in the U.S. House, a critical measure of support that ensures the matter passes if brought to a vote.

In the U.S. Senate, the Local Radio Freedom Act has support from around two dozen lawmakers — and efforts are under way to draw even more support around the initiative in that chamber.

Opponents call out the Local Radio Freedom Act for what it is: A measure that deprives musicians of their fair share of revenue generated by broadcast stations off the back of their work.

“The LRFA is not about freedom, but rather the ability of major corporations to pad their profits at the expense of recording artists,” the Department of Professional Employees (DPE) said in a statement. “American terrestrial radio stations have long profited from playing songs without compensating the artists and musicians who performed these creative works. These recording artists are not guaranteed a share of the advertising revenue their performances help generate.”

The DPE said recording artists are no different from other professionals whose creative works benefit major media organizations.

“Recording artists, like all professionals, deserve a fair return on their work,” the DPE affirmed. “Just as you would not consider nurses’ pay to be a tax on hospitals, you should not accept the premise, put forward by the LRFA’s supporters, that frees them of the responsibility to pay artists and musicians for use of their recorded performances.”

A second legislative push that has generated broad support is the “AM Radio for Every Vehicle Act,” which would force automakers to make AM radio signals available in their vehicles.

The law is meant to force carmakers to install AM radio tuners in their electric vehicles at a time when some were dropping the feature due to interference caused by electric engines.

Broadcasters say the problem is fixable, if automakers are willing to spend the money shielding their AM radio tuners. Carmakers say any such fix would drive up the cost of electric vehicles, and note that AM radio stations are already available via streaming platforms baked into in-vehicle infotainment systems.

Lobbying groups like the National Association of Broadcasters have been successful in using fear-based messaging to push the AM radio initiative forward: They note that many AM radio outlets serve as receiving stations for Emergency Alert System messages, and that cutting AM radio tuners out of cars could have public safety implications.

“Having AM radio available in our cars means we always have access to emergency alerts and key warnings while we are out on the road,” Jessica Rosenworcel, the Chairperson of the Federal Communications Commission, said in a statement last year. “Updating transportation should not mean sacrificing access to what can be life-saving information. We stand ready to provide any necessary support and expertise to the Department of Transportation and Government Accountability Office as they may need.”

Those claims ignore the notion that there are other ways to receive critical emergency messages — most people carry a cell phone with them, and some in-car infotainment systems are capable of displaying emergency notifications received from FM stations and via cell phone networks.

“AM transmission is a legacy distribution technology that is over 100 years old; insisting that modern electric vehicles carry AM receivers is like demanding iPhones support rotary dialing,” Richard Stern, the CEO of streaming radio platform TuneIn, said in a statement. “There are more efficient technologies, such as [digital audio broadcasting] and [Internet Protocol-based systems] to deliver AM broadcasts to listeners. These new technologies point to a brighter future for the art of broadcasting and allow broadcasters to more meaningfully connect with modern audiences.”

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About the Author:

Matthew Keys

Matthew Keys is a nationally-recognized, award-winning journalist who has covered the business of media, technology, radio and television for more than 10 years. He is the publisher of The Desk and contributes to Know Techie, Digital Content Next and StreamTV Insider. He previously worked for Thomson Reuters, the Walt Disney Company, McNaughton Newspapers and Tribune Broadcasting.
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