The Senate Judiciary Committee meets next Tuesday to discuss S 379, the Senate's version of the Performance Tax bill. Our very own Sen Feinstein is the author of the bill and the head of the committee. Here is a letter to her on behalf of Southern California broadcasters:
 
The Honorable Dianne Feinstein
331 Hart Senate Office Building
Washington D.C.  20510
Attention: Neil Quinter

Re:  S 379 Performance Royalty

Dear Senator Feinstein:

On Tuesday, August 4, the Senate Judiciary Committee will be holding a hearing on S 379 and they will be holding the fate of the economies of over 300 local radio markets and over 13,000 local radio stations in their hands.

We know you like to think you are protecting intellectual property, but in your attempt to protect the performers, you are trampling on the intellectual property rights of thousands of radio station brands.  Actually, in the long run, you’ll be hurting the performers, too. 

Every radio station in America would, we’re sure, be willing to give a share of all the money they make charging people to listen to the performers’ songs. That’s because not one cent of our revenue comes from that. Not one cent. Unlike Satellite Radio and many Internet-only music sites, we do not charge a fee to listen to our content.

Our revenue comes from developing our radio stations into intellectual properties - brands - just as the performers do. We pay dearly to create and maintain those brands. We pay on air talent (more intellectual property). We pay promotional costs. We pay people behind the scenes to produce the content we provide, and to select and program our content, including musical content.

We charge advertisers for access to our product (our brand), to promote their products. We give that access to performers in exchange for access to their product (their brands). The performers are welcome to a share of the revenue we get as a result of creating and sustaining our brands – as long as they’ll also pay a fair share for the costs of doing that. 

Actually, Senator Feinstein, that is exactly what we are doing and have been doing all along – they use our brands to promote their brands in exchange for providing some of the content for our brands. We do not ask for a share of their product revenue and they do not ask for a share of ours.

If KIIS-FM in Los Angeles (Ryan Seacrest is the DJ in the mornings, it’s one of the top rated stations targeting young people in the U.S.) doesn’t play a new artist, no one is likely to notice or care. But if KIIS-FM does play that artist, it will make that artist into a Brand. We trade a share of one intellectual property for a share of another. It costs a fortune to create and sustain KIIS-FM as a brand. Who is protecting the rights to KIIS-FM’s intellectual property? They get no government subsidies. They don’t charge artists for access to their brand. They trade intellectual property access for intellectual property access. And the artists get the better end of that deal (they don’t have to pay Ryan Seacrest’s salary).

So the system – the business model – is fair and sustainable. 

But what happens if you decide a radio station’s intellectual property isn’t worthy of protection? 

The majority of a local radio station’s content is produced locally. It generates local jobs and local taxes (as well as Federal taxes). Is it really in the best interests of the people of California to take hundreds of millions of dollars out of local economies to send about 85% of it to companies in England, France, Germany and Japan? How much of that money do you suppose will ever find its way back to Redding, Fresno, San Jose or Santa Ana? Those cities – virtually all the cities – in California and across the U.S. have radio stations, and they will have to take money that is now producing content and promoting radio station brands and send it to the mostly foreign-owned record labels.

Based on the formula now being used for internet royalties, the market of Los Angeles would forfeit over $200 million in just the first year to the record labels. Very little of that money is likely to come back to the market. Certainly not enough to replace the jobs and taxes it will eliminate.

Every radio station in California is a constituent of yours. On behalf of those located in Southern California, I respectfully submit that we, too, have a right to protection of our intellectual property. And our communities have a right to expect your concern for their economies. 

Please consider the entire picture before you submit your vote, Senator Feinstein. Please consider all the ramifications to your constituents of your vote.

Best regards,

Mary Beth Garber
President, SCBA