Radio stations might be willing to pay performance fees

The National Association of Broadcasters has proposed a plan to pay at least $100 million per year in performance fees for music playing on the radio.

Satellite and Internet-based music services currently pay a different royalty structure than over-the-air stations, which is what frustrates music groups trying to collect as much revenue as possible. The association's proposal suggests that larger broadcasters pay about 1 percent of their net revenue in performance fees, while allowing some smaller stations to not pay anything at all.

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Small stations claim they could be put out of business if a new royalty payment tier is adopted, as critics and supporters of the new payment scheme continue to voice their opinions.

"I think some people inside the industry think we should fight and fight and fight,” said Peter Smyth, Greater Media radio group CEO said in an interview. "But at the end of the day, we have to make good deals that help us move forward.”

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The Recording Industry Association of America (RIAA) responded to the proposal by stating that this is the start of a relationship that needs to be in place for both sides to move into the future in a "productive way."

The organization responsible for collecting performance fees, SoundExchange, collected more than $180 million in 2009 alone. The collected money is split between the copyright holder, which is normally a music label and the artist.

Any compromise or agreement must have approval from Congress -- the House and Senate agreed in 2009 that broadcast radio should have to pay performance fees, but it asked both parities to come up with an amicable agreement together. Negotiations have been ongoing since February, with both sides willing to negotiate until a deal is done.

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I'm all for both sides meeting together to reach an agreement, but it'll only add another layer onto the nightmare of music licensing. The only one possible silver lining in this agreement is that it could also cause the fees for online radio to go down, allowing for increased innovation in internet radio.

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