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Senate Committee Advances Music Streaming Bill

- Separately, NAB Endorses More Radio Consolidation

The Senate Judiciary Committee last week unanimously passed the Music Modernization Act which includes significant reforms to songwriter compensation by on-demand streaming services, payments to pre-1972 recording artists and producer royalty shares. The measure retains language relating to the ASCAP-BMI rate courts that NAB negotiated before it passed the House earlier this year on a vote of 415-0.

The Senate committee added at the NAB’s urging a section that establishes an enhanced oversight role for Congress in any Department of Justice review of the ASCAP and BMI consent decrees. While nothing in the bill prevents DOJ from undertaking any action relating to the decrees, the measure ensures an appropriate and clear oversight role for Congress in that review.

Timing for final Senate passage is still unclear.

NAB to FCC: Allow More Radio Consolidation
The NAB Radio Board last month came down in favor of more consolidation in Radio ownership and advanced specific suggestions to the FCC for consideration in the next quadrennial review of the commission’s ownership rules which is anticipated to begin later this year. 

TAB does not take a position on ownership regulations.

The recommendations, which did not garner unanimous support from NAB Radio Board members, are based on market size:

  • Largest 75 Markets:  Allow one entity to own up to eight FM stations in a market, allow ownership of up to two additional FM stations in a market for owners that incubate station ownership by new entrants into the industry, and completely disregard AM stations when calculating ownership concentration.
  • All Other Markets:  Allow unlimited ownership.

In its arguments for the proposed changes the NAB Radio Board pointed to the extraordinary evolution in the media marketplace since 1996 when the current ownership rules were set and before Pandora, Spotify and YouTube arrived on the scene. Further, some industry researchers have found that more than half of all local advertising revenue, local Radio stations’ core revenue, is now being siphoned by digital entities like Facebook, Google and digital music subscription services.

As attorney David Oxenford with the Wilkinson Barker Knauer law firm has noted, proponents of greater diversity in Radio station ownership will argue that consolidation will hinder such opportunities. Still others will likely contend that consolidation since 1996 has led to some Radio groups to overextend themselves financially, rather than helping the overall economics of the industry.

A Notice of Proposed Rulemaking in the quadrennial ownership review is not anticipated for several months. Once issued, there will likely be a 60-day window for public comments followed by a period to allow for replies. No decision is likely until at least late 2019.

Oxenford’s Assessment of Changes in the Audio Marketplace

Questions? Contact TAB’s Oscar Rodriguez or call (512) 322-9944.

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