The Local Radio Freedom Act is attempting to protect small radio stations, like KASO/KBEF here in Minden, from having to pay additional fees for playing music.
Broadcast radio pays royalties on musical compositions, which are typically owned by the songwriters or music publishers. Digital or “streaming” radio pays royalties for both the musical compositions and for sound recordings which are usually owned by the recording artists and music labels. There has been a repeated push to change this so broadcast radio must also pay both.
The royalties are paid through different performance rights organizations (PROs), each of which offers different selections of music. KASO/KBEF has been paying three different PROs and has just added a fourth in order to access a wider variety of music for its listeners. Since KASO/KBEF has both broadcast and streaming radio, they are paying the musical composition royalty twice and the sound recording royalty once to each of those PROs.
“We have blanket agreements that we pay an agreed upon percentage that is negotiated by [the PROs],” said Mark Chreene of KASO/KBEF radio. Rates are billed monthly or quarterly, depending on the agreement.
When asked about how additional fees might affect KASO/KBEF, Mark said, “For a small station like us, it would price us out of business. There’s no way we could afford to do it. To be honest, the rates I have to pay for royalties is already a pretty good clip. It’s a lot at the end of the day.”
“Radio has had a unique relationship with the music industry for years,” said Mark. Broadcast radio, which is free to listeners, offers free promotion of music, giving artists an audience and promoting tours and events for performers. In the Local Radio Freedom Act it states, “the sale of many sound recordings and the careers of many performers benefited considerably from airplay and other promotional activities provided by both noncommercial and advertiser-supported, free over-the-air broadcasting.”
Local radio provides localized information, supports local fundraising, and helps bring the community together. People far and wide tune in to the St. Jude Auction every year. It is very rare nowadays to find high school sporting events covered on the radio, but our station still does it. “And it’s unusual to have two local radio stations in one community like we do,” said Mark. “That’s unique as well.”
“What Congress is proposing would help to protect us from having additional fees that would probably shutter a lot of us for good,” said Mark. “And then you’d have a lot of communities that would be losing their stations just because they can’t afford to keep them open.”
Losing your local station would probably not be a temporary situation. There are only a limited number of radio frequencies available. Larger stations and broadcast chains will buy local stations for their radio frequency band, but will use it to broadcast network news and programming, not local. This is what happened to Springhill’s station.
Local radio is supported almost exclusively by advertising, and mostly local advertising at that. During COVID many local businesses have struggled. “When those guys struggle, we struggle,” Mark said. “We’re only here as long as we have the support of our community, and through the advertising of small businesses that are here. The bulk of what keeps us going is home-spun dollars.”
The Local Radio Freedom Act is bi-partisan. The bill was introduced in May of 2021 by Representative Kathy Castor, a Democrat from Florida. Representatives Mike Johnson and Julia Letlow, both Republicans from Louisiana, are co-sponsors. The bill has currently been referred to the Subcommittee on Courts, Intellectual Property, and the Internet.