The Canadian Association of Broadcasters (CAB) today called for a resolution to oppose a new royalty structure proposed by Canada's record labels.

The resolution, adopted at the organization's annual meeting in Ottawa, states that, "the CAB will take all measures to publicly oppose this egregious and abusive demand by the record labels including taking action before Parliament, the Copyright Board and the courts."

Glenn O'Farrell, president of the CAB, said the record companies are demanding almost $50 million ($53 million U.S.) in royalties beyond the $70 million ($75 million U.S.) that radio current pays under nine existing tariffs. O'Farrell said it was short sighted of the music industry to bite the hand that feeds it, considering, "it will only hurt one of the few areas that is still working well for them in the digital world."

O'Farrell said that radio is one of the forces still driving music sales. "The irony of the record labels' demand is that private radio creates value for the recording industry. Private radio broadcasters are deeply concerned about the attempt by the recording industry to recoup its losses by claiming additional payments for music played on the air," said O'Farrell. "While broadcasters recognize that artists, producers and other rights-holders should be fairly compensated for the use of their songs, our industry believes that this tariff proposal is a blatant abuse of the principles of the Copyright Act."

The Canadian Recording Industry Association, which represents the country's major music recording companies, was not available for comment. But music industry sources disputed the $50 million figure the CAB put forth, saying it was vastly inflated.

O'Farrell said the music companies clearly benefit from the support of radio, and that CAB members already pay millions in royalties for the use of music on their stations.

"There is a clear promotional value to the record labels when their songs get played on the air, just as there is a value to radio to have those songs to play," noted O'Farrell. "That said, radio already pays millions of dollars annually to the labels, artists and songwriters to put the music on the air. We consider this demand to herald a damaging shift in the long-standing beneficial relationship between the two industries."

The CAB's resolution opposing the royalty comes at a time when radio in Canada is at its historic peak. In 2006, private radio's advertising revenue increased 5.3% to $1.4 billion ($1.49 billion), with profit of $284 million ($304 million).