The Media Institute, a nonprofit research foundation focused on communications policy issues, has voiced their opposition to the Performance Rights Act, which would force radio stations to pay royalties to artists for playing their music. A new paper called Performance Fees on Radio Stations: A Debacle Waiting To Happen was written by Media Institute VP Richard T. Kaplar and says that the royalty would impose an undue economic burden on broadcasters already reeling from the recession.

The paper reinforces the view that radio broadcasters and record labels have enjoyed a "mutually beneficial economic relationship" in which broadcasters play recordings available for free, thereby building audiences and ad revenue, while record labels get the benefit of that free airplay to boost record sales. Imposing a royalty scheme on broadcasters would not only upset this equilibrium, but would likely force a significant number of stations into bankruptcy or off the air altogether. Black and Hispanic stations would bear the brunt of compulsory performance fees for sound recordings, and the loss of such stations would be particularly acute for Black and Hispanic communities where local radio stations are "a primary venue for the expression of minority and ethnic viewpoints," the paper states.

Kaplar concludes that the Performance Rights Act "would most likely reduce diversity, and thus run contrary to Congress’s long-standing goal of enhancing media diversity. The economic and diversity impacts would be especially harsh on minority-owned radio stations, the outlets least able to tolerate additional burdens. Record companies should not try to kill the 'golden goose' of radio broadcasting in an effort to boost their bottom lines. Free music for free airplay has stood the test of time. It’s an arrangement that is not broken, and does not need to be fixed."

The full Policy Views issue paper can be read here.