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NAB hits the RIAA where it hurts

David_rehr_nabMany years have passed since my seven-year stint as a reporter in Washington, D.C., so I'm no longer fascinated by all things inside the Beltway. Still, I have a soft spot for bold lobbying, which is why I've enjoyed watching the National Assn. of Broadcasters so much this year. It's been a tough slog for the broadcasters, with fights over decency, webcasting fees, HDTV carriage on cable systems, the XM-Sirius merger and local ownership restrictions, among other issues. And yet, in spite of all the demands on its time, the NAB keeps cranking out nuggets of lobbying gold. The latest example is the belt-grazing blow it threw at the major record companies yesterday in response to their push for more royalties from radio stations.

Let me set the table a bit before describing what the NAB did. Rep. Howard Berman (D-North Hollywood), one of the entertainment industry's go-to guys on Capitol Hill, plans to introduce a bill later this month requiring radio stations to pay "performance royalties" to labels and artists for the songs they air. The controversial initiative, which the NAB deems a "performance tax," would cost broadcasters millions. To lay the groundwork for this bill, Berman convened a hearing on performance royalties in July in the House Judiciary Committee panel that he chairs. The theme of the hearing, whose witnesses included Judy Collins and Sam Moore, was "ensuring artists fair compensation."

Yesterday, NAB President David K. Rehr (pictured above) sent a letter to Berman and the panel's ranking member, Rep. Howard Coble (R-N.C.), calling for more hearings to probe deeper into the question of artists' compensation. In particular, he urged the subcommittee to explore how labels compensate artists -- a notoriously sensitive topic for the major record companies, whose contract terms are frequently likened to Lucifer's. Brilliant move, Dave! From the NAB's perspective, it's much better to debate what the labels would do with the new royalties than whether stations should continue getting a pass on them.

The letter includes seven suggested lines of inquiry, all of them minefields for the labels. These include comparing how much the labels benefited from selling Collins' and Moore's music to the compensation those artists received, determining the average compensation performers receive from music sales, and exploring how to create pensions for artists under contract. And how's this for a loaded set of questions:

On average, how many performers find themselves in debt to record labels after signing with a label? On average, what is the amount of that debt? What is the impact on those performers?

It's hard not to admire tactics like this (that is, if "admirable" is a word that ever applies to corporate trade group lobbying). They're what make Washington great theater, albeit usually in the Kabuki or Absurdist genres. I'll be eager to see how MusicFirst, the lobbying group that labels and artists created for this issue, smacks back. How about a full-page ad from artists who collected big advances from the labels before releasing CDs that tanked?

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Times editorial writer Jon Healey pens opinion pieces about a variety of business issues, and blogs about technologies that are changing the entertainment industry's business model.

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