Economic study abets radio royalty payments.

New research from the Phoenix Center, titled “Promotional Effects and the Termination of Royalty Rates for Music,” concludes that any promotional benefit of radio airplay is merely part of a private agreement between the music and radio industries, and should not lead to federal law that mandates the free use of music by the radio industry. One of the co-authors of the study, Michael Stern, put it this way: “Our analysis shows that a market-negotiated rate balances the income derived by commercial uses of music and any promotional effects those users provide, revealing that any promotional effect is fully internalized by the parties. In layman’s terms, this means that if you use music to make a profit, then you should have to negotiate with the rights holders for the right to do so.” The voice of the broadcast industry, NAB Executive Vice President of Communications Dennis Wharton, had this to say: “Our stations are proud to be a primary platform for new music discovery, and NAB will strongly oppose RIAA-backed legislation that would transfer hundreds of millions of dollars from local radio to mostly offshore record labels.”

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