This week, President Obama officially backed the controversial Radio Performance Royalty Act. The bill would require terrestrial radio stations to pay money to record labels for playing their artists’ music. The act would also include new rules and consequences for illegal streaming of content and online infringement.
The bill has gone to Congress a number of times in the past, and the White House has traditionally taken a similar stand on the issue. But with the combination of a failing economy, relatively low album sales, and a struggling radio medium, the outcome of the bill creates higher stakes. Record labels, who once needed radio in order to give exposure to their artists, benefit more from radio royalties; money that they are losing from sluggish record sales. This could potentially lead to the dissipation of a number of local radio stations. The National Association of Broadcasters called the bill a “jobs-killing fee on America’s hometown radio stations.”
Public radio station National Public Radio (NPR) also faced a financial shift recently. A bill passed by Congress on Thursday banned the station’s affiliates from using federal funding on radio programs. They are, however, able to use that money for administrative matters. The station must now rely on sponsorships, listener contributions, and grants, which make up a bulk of their funding.
The measure was approved 228-192 in the House, along party lines.
