Tech industry to RIAA, radio biz: Keep your 'legacy technology' demands away from our cellphones
The battle between recording and radio industries over performance rights royalties has moved to a new platform: your cellphone. The Consumer Electronics Assn., the trade group behind the annual CES event, has lashed out at the radio industry's push for FM radio tuners to be a government-mandated addition to mobile devices.
"We believe that product design is the domain of innovators in the marketplace -- not the government," reads a letter signed by Gary Shapiro, CEA's president and chief executive. "As such, we will vigorously oppose any effort to force manufacturers by legislative fiat to include legacy technology in devices."
This isn't the first time the CEA has voiced opposition to the idea of FM tuners becoming a requirement for cellular devices. The concept was introduced by the National Assn. of Broadcasters earlier this year as part of its ongoing negotiations with the RIAA -- the Recording Industry Assn. of America -- over the introduction of performance rights royalties to the U.S. market. Currently, U.S. broadcasters pay only songwriters/music publishers for songs played on the air, whereas most countries also compensate the musicians and record labels.
Congress has requested the RIAA and NAB to work out a compromise after the House and Senate judiciary committees backed the Performance Rights Act, which would require broadcasters to pay royalties to musicians and labels. In agreeing for stations to pay about 1% of net revenue -- a figure that is estimated to generate an additional $100 million for the music industry -- the NAB has requested that FM tuners become mandatory in cellular devices.
"Government mandates are unnecessary for our two industries to meet consumer demands," reads the CEA letter. "As with the nation’s transition to digital television, the advent of broadband-enabled devices affords broadcasters and manufacturers a unique opportunity to work collaboratively to ensure that consumers enjoy all the benefits of new technology."
In increasing the number of mobile phones with FM tuners, radio believes it could better compete with fast-rising streaming services such as Pandora, as well as boost its listenership and increase advertising. Such a compromise is contingent upon the U.S. government approving legislation to mandate the installation of FM tuners. The NAB, in its response last week, highlights the public safety benefits of the installation of tuners, which would ideally work if cellular networks were down during a disaster.
"It is premature to discuss a legislated mandate related to radio chips in cellphones, since no legislation has been introduced," the NAB's executive vice president of communications, Dennis Wharton, said in a statement. "Nonetheless, the public safety benefits of having free and local radio's lifeline service in mobile devices is undeniable, a fact underscored by the disability community's recent endorsement of this technology."
Both sides have issued competing studies that claim to illustrate public support for or opposition to such a move. The NAB does have a website, Radio Rocks My Phone, advocating on behalf of the issue and listing which devices sport tuners. The NAB has cited studies that claim two-thirds of all adults ages 18 to 34 say they would listen to more radio if their mobile devices had FM tuners, while the CEA has cited surveys that argue consumers are opposed to any sort of government mandate.
Apple recently brought a FM tuner to its Nano line of iPods, yet the iPod brand has maintained its market dominance while being largely radio-free. Microsoft's Zune, however, has carried radio capability since its introduction in 2006.
-- Todd Martens
Photo: The FM-ready iPod Nano. Credit: EPA