Radio already pays annual fees to ASCAP and BMI, which covers the songwriters, but it doesn't pay a fee for the musicians. The musicians union used to be compensated in other ways (through "record turner" jobs, for instance), but they haven't been paid by radio in a long time.
The theory has always been that radio pays them in ways more valuable than money--they expose their songs to the populace for free--and the populace, in turn, buys those songs. Free advertising.
Of course, the union counters that the radio stations are also making a ton of money by playing those songs (selling 'un-free' advertising), and that they should get a share of it.
I've always been opposed to the concept because I think the radio industry is too fragile right now to handle another huge fee. However, I've rethought that over the past few months. I do think something can be worked out that is reasonable. With Apple killing the record companies, it really could be in radio's best interest to make sure that new music survives. If it doesn't, radio won't have any new product to promote.
The details on the upcoming battle is here.
