Broadcast & Satellite

Study Says Perfomance Rights Act Could Shutter Some Radio Stations & Help Labels Invest In Artists

image from A new U.S. Government Accountabilty Office study which surveyed "stakeholders" predictably concludes that some that the proposed Performance Rights Act  requiring broadcast radio to pay performance royalties might force some stations to make "adjustments... such as reducing staff levels, switching to a non-music format, and ceasing operation." 

The study also concludes that the bill could help record labels by providing a major new revenue stream and that they could "use the additional revenue to invest more heavily in the creative process of music."

Yeah, right.

Since money is involved, is anyone be surprised that the radio station stakeholders would tell the GAO that they'll suffer; or that the labels, as potential recipients of the cash, would suggest that they'll do wonderful things with their windfall?

Highlights of the GAO study:

  • "According to industry stakeholders, both the recording and the broadcast radio industries face economic challenges. Digital technology and piracy have decreased the sale of records, the recording industry’s main source of revenue. Economic conditions and the fragmentation of listeners among newer media platforms, such as the Internet and mobile devices, have reduced advertising sales, broadcast radio’s primary revenue source."
  • "Both the recording and broadcast radio industries benefit from their current relationship, according to industry stakeholders. The recording industry receives broadcast radio airplay, which promotes sales for sound recordings and concert tickets. For the radio industry, sound recordings attract listeners to radio stations that sell advertisements."
  • "The proposed act would result in additional costs for broadcast radio stations. Costs from performance royalties would vary based on whether the station broadcasts music and its gross annual revenue. Stations may also face administrative costs from record-keeping and playlist reporting requirements as well. According to broadcast industry stakeholders, some radio stations that are unable to adjust to these new costs may reduce staffing levels; change from music to non-music programming, such as news, talk, or sports; or discontinue operations."
  • "The proposed act would result in additional revenue for record companies, musicians, and performers. Musicians and performers whose songs are broadcast on the radio would receive an additional income stream. According to recording industry stakeholders, record companies could use the additional revenue to invest more heavily in the creative process of music."

"We provided a draft of this report to FCC and the Library of Congress. In its letter, FCC emphasized the financial difficulties in the broadcast radio industry."

Share on:


  1. “Both the recording and broadcast radio industries benefit from their current relationship”
    What’s the point of making the change then? The government has no business trying “provide more income” for anyone. If someone can’t figure out how to make enough money with their business to stay in business, then they can continue and do it for free or go out of business.

  2. @Christopher – I see you’re a musician as well. Currently, only songwriters and publishers get performance royalties for radio airplay. It seems like you would be interested in a legislation that would allow you to get compensated for your work as a performer. I agree that the government shouldn’t be about providing more income, yet it should be considering ways to protect our assets and allow us to reap the benefits of our work as performers. I personally would appreciate getting residuals on my performances. Any income stream is a good income stream.
    Also, looking at the annual statutory license royalty rate proposed, if a station is making $100,000 per year, it can likely find it in its budget to designate $500.
    Clay Butler

Comments are closed.