For radio, talk of royalties is in the air

TEXT OF STORY

Scott Jagow: Today, Congress holds a hearing on the business of radio. Specifically, royalties for playing music. Jeremy Hobson reports from Washington.

Nancy Sinatra: You keep sayin’ you’ve got somethin’ for me.

Jeremy Hobson: A lot’s changed in radio since 1966, when Nancy Sinatra released her hit “these Boots are made for Walkin.” Even the song’s changed a bit, thanks to Jessica Simpson.

Jessica Simpson: You keep sayin’ you’ve got somethin’ for me.

But one thing hasn’t changed — it’s still free for FM radio to play those songs. They don’t have to pay royalties to musicians, as satellite radio and radio stations in other countries do.

Sinatra: I don’t think that’s fair.

That’s Nancy Sinatra, who will be making the case on Capitol Hill later today for a royalty requirement. She doesn’t buy the argument that radio play leads to record sales.

Sinatra: Most of the time when I listen to the radio, I don’t hear them mentioning the artist or the musicians or any of that, so I don’t see where the promotion is.

Dennis Wharton: Well that’s interesting, cause we just released a study that proves without doubt that radio airplay generates enormous revenues for record labels and for musicians.

That’s Dennis Wharton with the National Association of Broadcasters. He says royalties could cost the industry as much as a third of its annual ad revenue.

Wharton: This is a dire threat to the radio business.

Wharton’s argument seems to be resonating on Capitol Hill. Already, almost half of the House of Representatives has signed a resolution against imposing royalty fees on radio broadcasters.

In Washington, I’m Jeremy Hobson for Marketplace.