Radio Will Stop Playing Music
Stations are threatening to flip to talk, religion and sports. Or even worse, only play hit songs. Why?
The music industry wants radio to pay for playing music. Radio stations currently pay the songwriters and publishers of songs, but not the artists performing the work (which often is different from the songwriter). Of course radio should pay. Part of the reason why songs become popular is because of the performers. However, it may be too little too late. The recording industry should have been more forward thinking in 1939 when broadcasters convinced them radio play was 'promotional' and did not merit payments. (Ironically, MTV persuaded the record labels of the same thing for playing videos in the 1980s.) Additionally, the recording industry did not have strong enough lobbying power against the broadcasters in 1976 when the copyright law was amended.
Thankfully, the recording industry was smarter when it came to webcasters, satellite radio providers and cable companies. When those technologies emerged they fought for the performance right payment.
Of note, the United States is one of the only nations in the world, holding court with such liberated countries Iran, North Korea, and China, which does not pay performing artists for radio play. As a result, foreign stations do not have to pay American artists when music is played internationally. This costs American artists tens of millions of dollars annually. It is estimated that acts and record labels (who would receive 50% of the royalty) are being deprived of at least $400 million a year.
To obtain this payment, the Performance Rights Act, backed by the MusicFirst Coalition - a group of labels, artists, and managers--was introduced earlier this year. Thus far it passed out of the House Judiciary Committee over the summer, but has yet to clear the full House. The Senate Judiciary Committee announced this week it will take up the bill.
Under the Performance Rights Act, smaller stations and non-commercial stations would only play between $500 to $5,000 annually. For bigger larger stations, fees would be negotiated or be earmarked as a percentage of revenue. The National Association of Broadcasters (NAB) argues for some small stations, who are already stretched paying publishers and songwriters, even a nominal fee could be too much.
Interestingly, an NAB backed bill titled the "Local Radio Freedom Act" has been introduced as a counter to the Performance Rights Act and has the support of over 158 lawmakers.
The NAB claims because the record companies are in financial trouble, they want radio to pay to offset costs. The NAB also calls the Performance Rights Act a 'tax' - which it is not because it's not a government payment.
Terrestrial radio is actually in the same mess as the record companies. Thanks to the plummeting economy, radio has reportedly lost 60% of its advertisers, including belly up companies Comp USA, Good Guys, Tower Records, and Circuit City, as well as local automotive and financial institutions. Clear Channel let go of most of its part staff. Citadel is close to chapter 11. Cox is doing similar cutbacks.
Radio One has gone to the extreme by calling the act racists, claiming it targets smaller minority owned stations, which is ridiculous. A few stations have gone so far as to blacklist artists who speak on behalf of the Performance Rights Act in front of Congress.
Some claim the debate is simply Big Radio vs Big Content. Big Radio doesn't care as much about music as it does money. So, if broadcasters are forced to pay a performance fee, more and more stations in every market will flip to talk, news, sports, and religion (some already have). Or, insiders fear radio will opt to only play the hits they pay for, leaving a vacuum for emerging artists.
Should radio pay. Or course. It just may be too late. The coffers have dried up.
If radio is really 'promotional' for record labels, then maybe the labels should pay radio stations every time a song is played? Oh right, program directors asked for that once upon a time, and the labels coughed it up. It's called payola.
Follow Tamara Conniff on Twitter: www.twitter.com/tamarastar
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AM/FM Radio already only has talk and hits. I never learn about new music on terrestrial radio, save the newest from Britney Spears, etc. I have pondered this issue for some time, and given that internet/cable/satellite radio already pays a performance royalty, so should terrestrial radio. But it should be phased in and smaller stations should be either exempt or pay a very small amount. I have no love of the recording industry (nor the big radio broadcasters for that matter), but it seems fair to have the performance royalty. This will also mean that American artists can finally collect those royalties from overseas as well (since American stations don't pay foreign artists, all foreign countries will not pay American artists, in retaliation).
My Part 2
The real problem is that there are no laws in place that enforce the way the record companies and PROs distribute royalties (taxes) that are collected on behalf of the artists. If you really want to change the status quo, don't write about levying new taxes to support a failing business model becasue they haven't figured out how to navigate the digital world.
The real crime is being commited by the recording industy's failure to embrace the digital landscape. MP3.com and Napster showed the way. 10 years later we are still where we started with hundreds of digital corpses lining the Internet highway. How can it be possible that the recording industry has not made any progress in the last 10 years. That's where the crime is!
First, it is not a tax when monies are collected and delivered to a copyright owner. That's called a royalty. The theory of financial compensation for use of intellectual property is derived from the Constitution under Article I, Section 8, and has been upheld by the Supreme Court on numerous occasions.
Second, government intervention DOES regulate how royalties are paid to the artists. Under the DMCA, webcaster royalties are split 50/50 between the artist and the sound recording copyright holder (who is often the artist). This is far better than most artist/label contracts. This SAME system would be implemented if the Performance Rights Act passes. So, if you believe that artists should get more, you should actually be arguing in favor of government intervention.
Unitron Part 1 and Part 2 are right on the mark!
My Part 1.
The 16th Amendment to the Constitution of the United States gives the congress the right to levy Taxes, Duties, Imposts and Excises. Please tell me if there is another industry where the Federal Government steps in and passes laws to ensure payment. If it looks like a tax, its a tax. Just admit it!
If radio is truly not promotional then it shouldn't matter to the recording industry if radio stops playing music, should it? They do have the right to run their own business as they see fit, or are we going to pass laws that dictate that the radio business must play music?
Tamara - There is a difference between Payola and legitimate pay-for-play business models. If broadcasters want to sell advertising time to record companies they can without violating the law.
The recording industry and the PROs have a long history of not paying royalties to the rightful owners! All you have to do is ask an artist when they received their last royalty check and how much it was?
The RIAA is spending millions of artist royalty dollars on a marketing campaign to influence artists to speak up on their own behalf so that recording companies can continue to do business as usual, or even worse with the new 360 deals.
I refer you to Article 1, Section 8, where it talks about promoting the progress of science and useful arts. That's the justification for patents and copyright laws.
If it's a violation of copyright to play someone's record without paying them, then the money paid to them is not a tax, it's just a cost. If it were a tax it would be paid to the (or at least a) government.
As for the integrity of record companies, see my earlier mention of someone else's observation that compares them to ranchers.
Unitron,
First, if the non-profit classical music station you suggest makes less than $1,250,000 per year, it will be subject to a low, flat fee of $5,000 under the PRA. Indeed, this flat fee covers more than 75% of stations operating in the U.S. If the station classifies as a "public broadcasting entity," it will pay $1,000 per year.
Second, you will note that all classical stations ONLINE must pay a royalty. Why should terrestrial broadcasters get a free pass? They make money off of the music just as much as webcasters do. Furthermore, this online fee has not caused all web stations to shut down or switch to talk radio. Broadcasters use this and other arguments as a scare tactic, while webcasters (who enjoy far fewer listeners) are doing just fine, and continue to stream a wider variety of music than terrestrial stations.
I invite you to read the Senate version bill for yourself here: http://www.govtrack.us/congress/billtext.xpd?bill=h111-848.
You appear to make the mistake of thinking that I believe satellite and internet radio should be subject to fees from which broadcasters should be exempt.
I do seem to recall somebody getting the online fee schedule arranged so as to screw the small, independent internet stations.
Back when we still rode dinosaurs to work, I used to be a broadcast radio station music director. Record companies never called to complain about us playing without paying, they called to try to get their product on our airwaves because they knew it drove record sales, so I'm a little tired of the whining about how radio has been cheating them for the past 80 years.
If the situation has changed and they no longer need radio exposure, fine, let them work out a new arrangement. I never said that the NAB were all misunderstood saints.
Unitron,
The reason you didn't receive calls from labels was because they were calling where their complaints might actually get something accomplished - Congress. Labels have introduced bills to create a performance right in nearly every Congress since the 1960s. Unfortunately, the broadcasters have successfully lobbied against the right every time. This massive US broadcasting lobbying force is unique, and helps to explain why every other industrialized nation in the world has a sound recording performance right.
Furthermore, there is no "arrangement" for the labels to renegotiate with broadcasters. Broadcasters will not even sit down to discuss their use of the works with the labels. Broadcasters take sound recordings, use them without the owner's permission, and won't even negotiate the value of promotional consideration in our digital era.
Who listens to Radio? Not the current generation else tradio couldn't threaten to cut listeners offf from music. Nobody's listening. Nobody cares what radio does at least since they missed Michael Jackson's death for better than 24 hours, despite listeners calling in with the news and requests. Radio is dead, at least the commercial version is.
Anyone care to point out today's radio greats? Can anyone here point out any great commercial radio station? Face it, for performers, radio died in the eighties. For advertisers, not until Bush broke the banks.
The Local Radio Freedom Act is not a counter to the PRA. It's a non-binding resolution that will have no impact on law. Additionally, a number of the representatives who signed it did so before some of their concerns were addressed, particularly the timing for when payments would start and the impact on small and non-commercial broadcasters.
As Senator Leahy said in an August hearing, legislation is going to move on this issue.
What about non-profit broadcast stations that devote much or most of their air time to classical music?
They aren't exactly swimming in ad revenue, and, if there's a better form of free advertising for new classical releases, it is one of which I am unaware.
This is a bad bill. It's nothing more than a money grab by the recording industry desperately trying to recover from their failure to see their industry changing right under their noses. If you don't like free public radio...advocate to change it. Throwing the baby out with the bath water so that the greedy fat cats can eat it is not the solution.
Thanks to everyone for posting. I read all of them. Keep the comments coming.
Some of the reason a song becomes popular is the performer.
Most of the reason is because someone - primarily radio - plays it and people hear it.
Oh yes, payola. The radio stations didn't complain about it. The record companies didn't complain about it. Everyone loved it when a tastemaker, in return for some publishing, played the record.
The complainers were primarily people who couldn't believe that the audience preferred Little Richard to Pat Boone. Congress, pumped up with the attention that investigations into jds and comics induced, immediately investigated why Johnny was so hip.
Payola worked many ways. In 1962, if Elvis Presley was to sing your song, The Colonel got a chunk of the publishing. I knew of one hit record in the 80s that was fully formed and recorded by a local band and later, suddenly, co-written by the artist with the hit. In the 80s, the record companies insisted on controlled composition clauses so the statutory mechanical reproduction fees were discounted for bands that wrote their own music. (The bands agreed to receive less of the money they were entitled in order be in business with the record company.)
The proposition is always made with the same question: do you want 50% of a hit or 100% of nothing.
I oppose charging the radio stations. It's entitlement stuff. It's putting the forest in the care of the old trees. It's wrong. Now, record companies, find new artists and, once you do, get excited and supportive about anyone who does you the favor of playing and selling those tracks.
Clear Channel blows.
The compressed sound of most radio HURTS THE EARS.
Radio is already dead except for some good college stations.
If I want to hear damned "Hotel California" at 2:36 everyday, I know where to go.
Meanwhie, I have my own music and the net and the stores keep me abreast of what is new and interestings.
Greed killed Radio like it killed everything else.
Some radio broadcasters say the will stop playing music when the Performance Rights Act becomes law, but let's get real.
First, it is one of several over-the-edge arguments that the National Association of Broadcasters, Clear Channel and other big radio ownership groups have come up with because they don't want to pay a performance royalty. Others include (1) it's a tax - it's not; (2) most of the money will go to the labels - it's the other way around, most of the money goes to artists and musicians; and (3) radio promotes music - they have it backwards, music promotes radio, no one listens for the ads.
Second, other radio platforms that do pay performance royalties are playing more music than ever.
Third, radio stations around the country are playing more and more music on their new HD channels; radio needs music.
And finally, music radio stations around the world pay a performance royalty and they are still playing music.
On another note, in 1939 a federal appeals court decision created the hole in copyright law that today allows broadcast radio to get a free ride while satellite radio, internet radio and cable TV music channels pay a performance royalty. Even music radio stations that stream their signal online - same music, same talent, same ads - pay a performance royalty.
Marty Machowsky
musicFIRST Coalition
A few thoughts:
Tamara, it is a bit disingenuous to say that the recording industry should have been more "forward thinking." The industry has been fighting for this right since the 30s, and, as you recognize, its repeated defeat has more to do with the lobbying power of broadcasters than the fairness of the bills. If by "forward thinking" you mean labels should have spent more money on lobbyists, that's a separate (and sad) argument.
It is important to understand that the fairness of the RIGHT to collect has nothing to do with the depth of the coffers, or payola, or promotion. Justify it all you want, but in no other area of copyright does one have the right to use someone else's intellectual property for "promotional" compensation. Movies based on books undoubtedly promote the sale of the books, but no one argues that no royalties are due to book authors.
As for those who distrust record companies, it might be helpful to actually read the bill. The Act currently before Congress states that 50% of radio royalties would go DIRECTLY to artists - regardless of their contracts. The other 50% goes to the copyright owner, which in thousands of cases is, again, the artist.
What constitutes the artist? The one with the name on the label? What about the arranger, the studio musician, the background singers? Yes, the Supremes were good, the musicians made the records kill.
And thousands of cases where the artist is the copyright owners suggests to me, based on 30+ years of watching the industry, of hundreds of thousands of cases where the artist is not.
Part One:
Far be it from me to say anything nice about the NAB and money, but they aren't responsible for the confused mess that is writing, composing, arranging, producing, performing, recording, manufacturing, promoting, and distributing recordings of music, spoken word, nature sounds, sound effects, et cetera, and figuring out who gets paid how much for what.
Or for the equivalent in the realm of video.
Payola was as much, if not much more so, the invention of record companies looking for the repetitious exposure of their product (which also meant less time available for their competitor's product as well) so conducive to record sales. (That it was also conducive to sheet music sales makes me wonder if there's an untold story about the deal between publishers and record companies)
Remember, it's in the radio station's interest to play music people want to hear. You don't have to bribe them to do that. Remember, also, that the only thing radio stations have to sell is airtime, and playing somebody's record burns off some of that time. Back when people bought records, every airing of a new record was a free commercial for that record. That's why record companies mailed out 45s to radio stations every week.
And considering the crappy songs that became hits because of their videos way back when MTV actually aired music (or, at least, "music"), video airtime was a free commercial for the records as well.
Here endeth Part One. Stay tuned.
Part Two:
It's not broadcasting's fault that record companies (and other content providers) didn't see that digital was going to be a double-edged sword, and that after everybody bought their record, 8-track, and cassette collections all over again in the form of compact discs, the ever-accelerating backswing of that sword was going to change their world forever, and that the world didn't owe them a living any more than the buggy whip makers taken by surprise by Mr. Ford and his ilk.
If the MusicFIRST Coalition has their way, I wonder how much of the money collected from radio stations will go the actual artists you hear on the records, or to their estates, and how much will go to record companies to whom they signed over their rights years ago.
As someone has said, record companies are concerned about artists the way that ranchers are concerned about cattle.
Also, in the interests of full disclosure, we should be told whether the Performance Rights Act, of which this column seems to be in favor, would result in any checks made payable to the estate of Ms. Coniff's late father.
RIAA? MPAA? NAB? Don't trust any of them further than you can throw them.
A Part Three is not anticipated at this time.
Personally, I think the performing artist is as deserving (if not more so) of payment than the songwriter and publisher. Whether anyone should be paid each time a radio station plays a song is another question, but that the actual performer should get nothing while the publisher and songwriter get paid is unfair.
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