H.R. 848, known as the Performance Rights Act, seeks to provide compensation to musicians for songs played on the radio. It was sent from the House Judiciary Committee to the full House of Representatives on May 13.
In its present form, the bill would require radio stations that play music to begin paying artists an annual fee through SoundExchange, which collects and distributes royalty money from broadcasters.
"Radio in this country earns billions of dollars each year in advertising revenue without compensating musicians who bring music to life," said Martin Machowsky, spokesman for the musicFIRST Coalition, which is lobbying in favor of the bill.
Machowsky said musicians receive royalty compensation from other media, such as Internet broadcasters and cable-TV music channels, but over-the-air radio has never been added to that list.
"The United States is the only developed country in the world where stations don't pay a performance royalty," he said. "It's important that radio support music." Repeated attempts to contact SoundExchange for comment were unsuccessful.
Radio stations already pay annual royalty fees to songwriters, who may not necessarily be the performers of a song, according to Kris Jones, spokesman for the National Association of Broadcasters.
"That's done out of recognition that a songwriter has a harder time monetizing a song on the radio," Jones said.
Sharon Tinsley, president of the Alabama Broadcasters Association (ABA), said typical royalty payments can make up as much as 9 percent of a station's total revenue.
"For stations in east Alabama, I would say they're easily paying a total of $8,000 to $10,000 in fees already," Tinsley said.
The proposed legislation means that local stations would have to pay anywhere from $500 to $5,000 in additional royalties each year, depending on each station's annual profits.
Jones said the fees could amount to $2 billion to $7 billion nationwide each year.
"When you're looking at a figure like that, it sets off alarms for radio station owners," he said.
In addition, Tinsley observed, "This is a per-station fee, so if somebody owns multiple stations, you're talking about closing in on the costs for insurance for a group of people, or pay for a part-time employee."
Who should pay?
The bill, if signed into law, won't take effect for three years, but it's already worrying some local station managers.
Mike Carter, operations manager for WHMA-FM in Anniston, said it would be a financial burden.
"We figured it up, and it would cost our company $16,000 a year in added expenses, which is basically a startup employee," he said. "I don't know what we'd end up doing. In this economy, it's the worst time for any company to see additional expenses."
Chris Wright, program director for Rock 105.9 and Rock 98.3, said he would face budget cutbacks as well.
"It's a chunk of money that would otherwise be there for having additional personnel or services for the listeners, and it's not going to be there," Wright said. "We're going to provide our listeners with the music they want to hear, but there may end up being fewer radio stations as a result."
U.S. Rep. Mike Rogers, R-Saks, opposes the bill, calling it a tax on radio stations.
"These local stations are small businesses that aren't in fashionable offices. They're struggling and they don't have extra money, and [the Performance Rights Act] could take many of them under," said Rogers. "Stations are concerned about offering local content, like weather information and community news, and it takes resources to do that. To take this money away to pay some corporate suits is unreasonable."
Wright called the bill a "record company bailout."
"The majority of the money would go to the record companies to save them from their bad business decisions," he said.
The ABA's Tinsley said the creation of Internet music downloading services, such as iTunes, has hurt the record companies' revenue.
"People aren't going to pay online what they used to pay at a record store," she said. "The record labels' relationship with consumers has changed, and they don't know what to do about it, so they're turning to the easiest target."
But Machowsky, spokesman for the musicFIRST Coalition, said the bill is all about giving performing artists their due.
"It is additional income for musicians, many of whom work hard and struggle every day to make ends meet," he said. "There's a very fundamental principle at stake: that you're taking something I've created and using it to make money. Radio stations should compensate artists and musicians when they do that."
Wright disagreed, saying musicians care more about the exposure that radio gives them.
"I played a local artist a couple of days ago, and I can't tell you how much he appreciated his song on the radio," Wright said. "He wasn't calling me to ask for money; he was calling to thank me for playing his song."
Who gets paid?
Buck McPherson, of the Anniston-based band McPherson Struts, said he thinks songwriters should be the people reaping the benefits of a song's success. The band writes all of its own music.
"If you wrote the song, you put pen to paper and had the good sense to publish it," McPherson said. "Songwriting is a craft, and, in the end, it's about the song — not the singer."
Jones, the spokesman for the National Association of Broadcasters, echoed McPherson's opinion.
"You're not going to buy a ticket to watch a songwriter write the lyrics to the next great song," he said, "but you do know who sings the song. You buy their album, download their song, buy their concert tickets and their merchandise, and that translates into money for the artist."
Rogers said the bill likely won't be considered until later this year, but, if it's signed into law, he called on radio stations to stop playing new music.
"I think you'll find a lot of record companies changing their tune if they can't get their new artists on the air," he said.
Jones said if the bill passes, stations may cut back on playing local and aspiring artists because of their unproven financial value.
"If you're a DJ and you've got two CDs in your hand — one of a known artist that your audience likes, another from an artist that your audience doesn't know yet — it's less likely that you'll play the new artist, because you can't take that big of a financial risk," he said.
Machowsky called that point "bogus."
"It's an astonishing statement from an industry that's mainly playing older music," he said. "Radio folks say they play what listeners want to hear, but the industry has been criticized for not breaking new artists."
McPherson Struts just released its first album, and started getting some airplay shortly thereafter.
McPherson said hearing his band on the radio was a strange but exhilarating feeling.
"I was very excited about it," he said. "I was pumping my fist out the car window."
McPherson said the three-man band is registered with ASCAP, which is one of three agencies representing songwriters and their publishers. They haven't been eligible to collect any royalty money until recently, when songs from their album started getting "spins" on the radio.
"I'm not sure if they'll pay us half a penny per spin, or a penny per spin — we're just finding all of that out right now," he said.
McPherson says he expects the band to make more money now that they have albums and other merchandise for sale, but he won't quit his day job as a chef just yet.
"The money's just not good enough in this economy to warrant that being our only job," he said.
Editor's note: Whit McGhee is working as an intern for The Star. He also is program director for WVOK-FM, based in Oxford.