Radio Group Pitches New Royalty Deal With RIAA

National Association of Broadcasters would pay record artists and labels one percent of all revenues

August 25, 2010 2:43 PM ET

The National Association of Broadcasters (NAB) has proposed a deal with the Recording Industry Association of America (RIAA) that would have radio stations give one percent of their revenues — roughly $100 million a year — to the music industry as performance fees, the New York Times reports. The groups, who recently came together to ask Congress to require FM radios in all digital devices, have long disagreed on royalty payments for artists and labels played on the radio. The NAB has favored the current arrangment, in which only songwriters see radio royalties.

Under the new deal, larger stations will pick up the majority of the one percent fee (calculated across the industry), while smaller stations — who argue that the additional burden could cause them to shut down — would pay a lesser percentage or nothing at all. "I think some people inside the industry think we should fight and fight and fight," said NAB member Peter Smyth. "But at the end of the day, we have to make good deals that help us move forward." Any deal between NAB and the RIAA would have to be approved by Congress.

Meanwhile, a coalition of six tech-industry associations have challenged the NAB and RIAA's efforts to have Congress mandate FM transceivers in digital devices like iPods and phones, Billboard.biz reports. Clearly, the FM chips would expand the audience for radio and the record industry. The tech groups argue that the move would put an unfair financial burden on them.

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