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Pay For Play 2.0: Radio Broadcasters Propose Digital Music Framework

Radio broadcasters are seeking to remain viable in the digital age in a new proposed deal that would see station owners pay record labels $100 million annually in performance fees.

The proposed framework, released earlier this month by the National Association of Broadcasters, follows urging from Congress last year for stations to work out a payment deal directly with the Recording Industry Association of America. Such a payment scheme would make terrestrial broadcasters a bit more like Internet radio stations, which paid labels some $180 million in performance fees last year, according to the New York Times.

But broadcasters want some concessions in return, including a government mandate on cell phone makers to include FM radio tuner chips in all mobile phones. Such chips would enable stations to better compete with the likes of Pandora and Last.fm.

The proposed requirement is receiving pushback from hardware makers, which characterize the chips as bulky drains on cell phone batteries. “We are completely, inalterably opposed to this,” the Consumer Electronics Association’s Gary Shapiro tells the Times.

By the newspaper’s account, the RIAA — whose members are themselves desperate for new revenue sources in the digital age — is in favor of the FM chip requirement, and confident that the parties will come to terms on the issue.

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