New performance royalty rates for 2010?

2010 isn’t shaping up to be a good year for radio. There’s a lot of competition out there for listeners’ ears. Satellite radio, iPods, iPhones…all have contributed to a drop in listeners for local radio stations. Add a struggling economy, and the result has translated to a drop in ad revenue. I’ve seen statistics suggesting that the local radio industry suffered a decrease of somewhere between 11% and 20% in ad revenue during 2009 and some analysts are saying the industry could experience the same again in 2010.

Accordingly, the Radio Music License Committee (RMLC) has gone into contract renewal meetings with BMI and ASCAP seeking reductions in the performance royalty fees the stations pay to the organizations.

The two industries have agreed to an “interim 7% rate reduction for both ASCAP and BMI.” The new interim rate went into effect on January 1, 2010. The final rate will be determined by a court and made retroactive to January 1.

The RMLC seems to expect the final rate to be at least that low, if not lower. And it would seem that ASCAP and BMI don’t disagree that the rate should be lower, reflecting the decrease in ad revenue. Just how low, is yet to be determined.

A reduction in these licensing fees, means smaller paychecks for songwriters, many of whom depend on their royalty checks for significant income. A hard year for radio, means a hard year for songwriters.