Radio Industry, Songwriters Strike New Licensing Deal

The radio industry has agreed to pay $1.7 billion over six years to a group that doles out royalties to songwriters under an agreement under which stations will now pay a set fee for music, rather than a percentage of yearly revenue.

The agreement is the largest single licensing deal in the history of U.S. radio, according to the American Society of Composers, Authors and Publishers, which represents more than 190,000 songwriters and publishers.

As part of the deal announced Monday, the nation’s 12,000 commercial radio stations also will have ASCAP’s blessing to simulcast its 7.5 million copyrighted songs over the Internet.

But the industry doesn’t expect a huge number of traditional radio stations to begin simulcasting on the Web because stations will still have to pay fees for Internet broadcasts to the Recording Industry Assn. of America, the group that represents record labels.

Simulcasting radio shows on the Web “is not a profitable thing to do anyway. When you introduce these RIAA fees, it makes it impossible, especially for the smaller operators,” said Keith Meehan, executive director of the Radio Music License Committee, which negotiated the deal with ASCAP.

Meehan said it had been a long-standing goal in the radio industry to get rid of the revenue-based fee structures because many stations believed the system was unfair.

ASCAP executives say the new deal cuts down on the paperwork needed to verify each station’s revenue, and it was negotiated without costly litigation on either side.