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Insider December 8, 2022 — Radio, radio

AM radio is vanishing, FM radio has a royalty problem, and satellite radio is growing.

Hello, everyone. Jake here today. All I really want to do is hear conspiracy theories about Spotify Wrapped — I swear they must be doing some curating on the numbers — but unfortunately, I have no proof to back mine up, and there’s real news to discuss instead.

Today, an issue all out dedicated to radio: a senator tries to stop the death of AM radio, SiriusXM gets serious about satellites, and the House takes a step toward overhauling radio royalties. Writeups below are from me, with reporting across the board from Ariel.

Sen. Markey is determined to save AM radio from the electric vehicle revolution

Automakers have been removing AM radio from some of their latest electric vehicles, and Senator Ed Markey (D-MA) would like to put a stop to that.

Markey wrote a letter to 20 automakers, including BMW, Ford, and Tesla, imploring the companies to maintain support for AM radio given its role as a critical communications medium. “Broadcast AM radio remains a crucial, cost-free source of news, sports, and weather, and, more importantly, is an essential medium for public safety officials — including the president — to communicate with the public during emergencies,” he wrote.

The removal of AM radio has been slowly underway for years. The Drive wrote a great piece earlier this year explaining what’s going on: some EVs from Audi, BMW, Porsche, Tesla, and Volvo are now being sold without AM radio, and even some hybrids are dropping it as well. The companies say this is because of electromagnetic interference from the EVs’ drivetrains as a result of the huge amounts of electricity being pulled out of their batteries. They claim this substantially degrades AM reception and audio quality.

But the article argues that there’s likely another cause at play here: this is a trend primarily among European automakers, and AM radio — known as “medium wave” over there — has largely fallen out of use in Europe. Why include the tech if a major swath of customers won’t use it anyway?

The catch is that there seem to be ways to avoid the interference issues. The Drive points out that Ford, General Motors, and Stellantis all make EVs with AM radio. (Though Ford is actually removing AM from one EV that shipped with it.)

Markey seems to have caught onto this. In his letter, he writes that automakers have “developed innovative technologies to address this problem.” He also asks all 20 companies to respond with information on whether they have plans to remove AM radio and, if not, what technologies they’re using to avoid interference.

AM radio is obviously an old technology that’s been superseded in countless ways. But it retains a major role for US listeners, and especially while it still serves a critical safety function, it’s easy to imagine legislators and regulators wanting to keep an eye on automakers trying to deprecate it on consumers’ behalf.

SiriusXM is adding two new satellites

SiriusXM is adding two more satellites to its… array? fleet? armada? What’s a group of satellites called?

Whatever the answer is, SiriusXM announced last week that its satellite capabilities are on track to expand even further, with new units being developed to expand service in Canada and Alaska, SiriusXM spokesperson Kevin Bruns told Hot Pod. The new models will operate at higher power and provide “higher service quality,” he said.

SiriusXM currently has six active satellites. These two new ones are being made by space tech company Maxar Technologies, which is also working on two others for SiriusXM, with the first expected to launch in 2024. Bruns declined to comment on the price of the satellite deals.

Bruns says the new models will provide “higher power operation and higher service quality.” It’s good news for SiriusXM customers, but it also speaks to just how hard it is for the company to expand its performance and range: there’s a roughly three-year turnaround time from announcing a satellite to getting it online.

A half-step toward musicians getting paid for AM/FM radio plays

On Wednesday, the House Judiciary Committee approved a bill that would require AM and FM broadcasters to start paying performance royalties to musicians when their songs are played on air. The American Music Fairness Act still has a very long way to go before it becomes law, but this week’s approval is a sign of legislative life around addressing a long-running dispute between radio giants and the music industry. And it speaks to why radio giants like iHeart and Audacy are investing more in podcasting — an area where they can own the content outright and avoid ongoing fees.

Music royalties are, to put it politely, a nightmare to understand. And the situation around radio royalties is particularly strange. The Future of Music Coalition has one of the clearer breakdowns: “When you hear Counting Crows’ recording of ‘Big Yellow Taxi’ on the radio in the US, Joni Mitchell — the composer of ‘Big Yellow Taxi’ — is compensated through BMI. But Counting Crows receive nothing for this performance.” Basically, US law says radio stations must pay out royalties associated with the writer of the song, but royalties associated with the performance are waived.

This is not a normal thing that other countries do. But it’s a long-running practice in the US, and it’s certainly helped prop up radio stations big and small over the years by removing what would otherwise be some costly fees. The Recording Academy says the bill would “give music creators what they deserve.” The National Association of Broadcasters, on the other hand, said that this bill would “jeopardize local jobs, prevent new artists from breaking into the recording business, and harm the hundreds of millions of Americans who rely on local radio.”

There are a bunch of exemptions built in to stop this legislation from decimating small broadcasters. College and noncommercial stations would pay a nominal amount, and small local stations would pay just dollars a day. But big names, or stations that have a major parent company, would be on the hook for royalties.

The bill is unlikely to become law anytime soon. There’s less than a month left in this Congress, and the legislation still needs Senate committee approval and full votes in both houses. Plus, it’s not clear that there’s enough support yet to get it across the line — Rep. Jerry Nadler (D-NY)  has been working on the issue for years at this point. Inside Radio reports that Nadler, who chairs the House Judiciary Committee, has been in bipartisan negotiations to gain support, while Rep. Jim Jordan (R-OH), who could lead the committee in the next Congress, intends to keep developing the bill in the new year.

That’s all for today. We’ll see you again tomorrow.