Could AM/FM's royalty exemption doom webcasting's hope for relief?

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Issue Date: 
Nov 29 2012 - 12:40pm

From Issue:

It was clear that many members of the House Judiciary subcommittee weren't interested in hearing about Internet radio's problems during yesterday's hearing (see our coverage here).

[SomaFM's Rusty Hodge has posted audio of the meeting online here. We should also point out that Tom Taylor has excellent and extensive coverage of the hearing in his Tom Taylor Now newsletter here, as does Inside Radio here.]

The meeting was to discuss the Internet Radio Fairness Act legislation intended to bring relief to an industry whose most successful representative remains unprofitable and paying more than 50% of its revenue in music rights. But music industry witnesses and their allies on the subcommittee deftly turned the spotlight elsewhere: the fact that broadcast radio does not have to pay royalties for sound recordings it plays on the air.

The maneuver perhaps revealed just how difficult it will be for IRFA-backers to gain any ground while the "radio royalty" issue remains unresolved in the eyes of the record industry.

In recapping yesterday's House Judiciary subcommittee hearing on the Internet Radio Fairness Act, ArsTechnica concluded:

"Overall, to say Pandora's battle appears to be an uphill one would be a serious understatement. Its main ally is the terrestrial radio industry, which has become a 'bad guy' to many in Congress. And the list of opponents is growing to include not just the entertainment industry but also unions and interest groups, both liberal and conservative... the AFL-CIO, the NAACP, Americans for Tax Reform, and the American Conservative Union all opposed the bill...

"In the meantime, the Internet radio industry—which essentially consists of just one large player—will continue to be a losing bet."

Read Ars Technica's recap (also the source of the boom box photo) here.

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