Steve Newberry Testifies Before Senate Committee

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NAB Joint Board Chair Steve Newberry, who also serves as President/CEO of Commonwealth Broadcasting, testified on Tuesday before the U.S. Senate Committee entitled "The Performance Rights Act and Parity among Music Delivery Platforms." Newberry told the committee that he believed the proposed legislation "will upend local radio broadcasting as you have always known it."

"I have been a part of the radio industry for over 30 years and I can honestly tell you that I have never seen the economic pain the radio industry is currently experiencing," said Newberry. "And as challenging as radio's current economic landscape is, it will deteriorate even further if a performance fee were to be enacted. Already this year, publicly traded companies are reporting revenues down 24%, 20%, 24% and 25%."

Newberry made the point that beyond radio's "economic landscape," that the radio industry provides "compensation to record labels and artists today." The artist is "paid" with free advertising and free exposure every time a radio station plays their music, he added. "Local free radio is the unique developer, exposer, promoter, and great populizer of new and old music, to multiple new and old generations of listeners."

"There is a value to free radio promotion, but how do we quantify it? Economist James Dertouzos determined that radio airplay was directly responsible for up to $2.4 billion a year in music sales. And that figure doesn't include the additional billions earned annually in concert or merchandise sales from radio promotions, artist interviews, and CD and concert ticket giveaways."

Additionally, he pointed to the thousands of calls, e-mails, texts and visits from record label promoters trying to get a song on the radio or increase the rate of spins or plays. "One station in Salt Lake City actually kept track of the number of calls and e-mails received from record labels between August 1, 2008 and July 14 of this year. This one radio station received 9,597 e-mails and 755 calls over the course of nearly a year. That's a total of 10,352 contacts that averages to 28 contacts a day," Newberry added.

And finally, Newberry said that "getting artists airplay on local radio is apparently valuable enough that record labels continue to spend thousands of dollars inviting radio program directors to hear private 'showcase concerts' by recording artists. I ask that this stack of e-mail invitations be included as part of the record. These private concerts offer a real glimpse into how much record labels need radio airplay."

In conclusion, he said "It's true, radio competes with other listening platforms, but this competition has not diminished the extraordinary value of radio. Satellite radio has 18.6 million subscribers, and Internet radio has approximately 42 million listeners. But these numbers are dwarfed by the 235 million listeners over the air radio has every week. Radio is the number one way to expose, promote, and get music into the lives of the listeners who fund the recording industry through sales of music, concert tickets and merchandise."