"For decades, local radio airplay has jumpstarted and sustained the careers of countless musicians and record label moguls," said NAB president and CEO Gordon Smith, in a statement. "Local radio's unparalleled promotional value drives increased record and merchandise sales and sells out concert venues. NAB applauds lawmakers for standing with hometown broadcasters in opposing a job-killing performance royalty that would damage the No. 1 platform for exposing new music."
While Smith touts the value of local radio and promotion, the assertion is a little disingenuous when looking at the ownership of U.S.-based terrestrial stations. Out of 11,357 AM and commercial FM stations in the country, over 850 belong to iHeartMedia, based in Texas (where the LRFA's authors are based), alone. Over 450 belong to Cumulus Media, based in Georgia. Over 300 belong to Townsquare Media, based in Connecticut. Over 130 belong to CBS Media, based in New York, and over 130 belong to Entercom, based in Pennsylvania, as well. The takeaway here: a not-insignificant portion of "local" U.S. stations are owned by five companies. This consolidation allows companies to promote similar playlists and artists across the format-aligned stations in their networks.
The NAB also did not address the disparity between the royalties terrestrial radio pays and the royalties that digital broadcasters such as Pandora (which is continuously attacked for it's alleged low payout structure, based on statutory licensing) pay.
"We believe Congress should have a robust discussion about the mechanisms by which people who make music are compensated for their creative property," reads a letter from Congressmembers to their colleagues. "Unfortunately, the Local Radio Freedom Act is a misleading resolution aimed at preemptively shutting down this important debate so terrestrial broadcasters can continue to profit from the work of musicians without any compensation."