Boucher: Online Stream Could Top Broadcast Signal Value

Spoke at the NAB State Leadership Conference in Washington

Radio broadcasters are going to have to pay a per-performance fee--or tax, as broadcasters call it--so it is in their interests to get together with not only music rightsholders but cable, satellite and online distributors to figure out how much that should be.

That was the advice or Rep. Rick Boucher (D-VA), chairman of the House Communications, Technology & Internet Subcommittee Tuesday to an audience of concerned broadcasters at a National Association of Broadcasters State Leadership Conference in Washington. Essentially, that is a fly-in of 500 or so local broadcasters so they can press the flesh with legislators and regulators and voice their concerns, one of which has been the prospect of having to pay to play songs.

Boucher said that as part of bringing broadcasters into that performance rights scheme, the rates cable, satellite and online music distributors already pay would come down. He said would ultimately benefit broadcasters, too, because their online streams would likely be at least as valuable to them as their over-the-air signals, and maybe moreso.

That may have been an effort to sugar coat a biiter pill for broadcasters, who face the prospect of having to add another expense to already stretched budgets. It was not what broadcasters wanted to hear, something Boucher readily acknowledged. NAB members have been pushing hard against any fee/tax, saying it could cost jobs and reduce music diversity. But it was what Boucher suggested they needed to hear.

The recording industry wants radio broadcasters to pay a per-performance fee for airplay, as do cable and satellite. NAB has had no interest in negotiating or paying such a fee, arguing that music companies are already compensated via the radio airplay that is crucial to driving their music sales.  

That may be, but Boucher suggested there was the congressional will to impose the fee on terrestrial radio, and that broadcasters needed to come to the table. "The votes exist today in the House Judiciary Committee to approve a federal measure that imposes a royalty on terrestrial radio," he said. "That bill would pass the House. The Senate, I think under its current membership, is probably more sympathetic to having such a law being imposed than it was two years ago."

He said it was in their interests to hold multilateral talks with the aim of setting a fee. He suggested that fee could be lower than the one currently charged cable and satellite, which he argues is too high. But he also said that if they did not want to negotiate, a fee, and perhaps a higher fee than they could independently negotiate, could be imposed.

"The fact is that you are the only entity exempted from the performance royalty. Satellite pays, cable pays, online streamers pay, and at a very high rate, a rate that I personally believe is too high. I think that rate, as part of a negotiated solution, will come down, and that a rate that achieves parity, should be applied across the board."

Boucher said that lowering the rate for everyone would ultimately serve broadcasters interest, but that that was because he said eventually, their online stream of their braodcast signal, for which they do pay a performance royalty, "was at least as valuable, if not more valuable, than [their] terrestrial signal."

Boucher said after his speech that he had already gotten reaction from two broadcasters. "One thanked me for the recommendation and said he agreed. Another said: We don't think it is time to negotiate."