Radio's Right to Free Tunes Is on the Rocks

16 Comments

There are hearings this week in Congress on whether non-satellite radio stations should pay a performance royalty for the music they play.  They have not had to do so, unlike the radio industries in other parts of the world, for historical reasons. The music industry has been lobbying to right this decades-long wrong, and its arguments seem to have sympathetic ears in Congress — notwithstanding the political capital of the National Association of Broadcasters.  I’m not always sympathetic to the arguments of the labels, but in this case, I am.
Quite simply, I don’t think U.S. terrestrial radio has a leg to stand on. They claim that they serve a promotional role for the music they play and that they should therefore be exempt (while Internet and satellite radio isn’t). As Billy Corgan testified, there is no doubt that radio is a heavy promoter of music, but so what? Stations are still using a copyright, and the owner of the copyright ought to get paid for it — especially if their IP can be used without an individually negotiated license. The NAB’s argument is absurd: Radio stations will pay Rush Limbaugh for his content and go after people that try to re-broadcast it, but they won’t do the same for the music they play?

It is time for this to be changed, and I hope it happens.  It may well hasten the departure of music from FM radio, but that would be a market decision. In fact, some enterprising labels may calculate that they do indeed derive a greater promotional benefit and offer to waive the royalties for stations playing their repertoire.  But that should be the prerogative of the copyright holder.

16 Comments

Linda A.

BTW, I neglected to mention in my previous post, you can still get exposed to new music via the Internet and good ol’ CDs.

Linda A.

Sounds to me like yet another case of the rich just trying to get richer. As John Mellencamp sang, “Ain’t that America…” Yes, it is, John. Yes, it is.

ASCAP music publisher

Radio stations have had to pay public performance royalties for decades , usually to organizations such as ASCAP and BMI which collect the royalties on behalf of the songwriter, music composer, and publisher.

Radio stations have never had the right to play music royalty free, not even indie produced music.

The bill that is being passed simply extends those royalties to the musicians and bands actually performing the music, whereas before the broadcasters only had to pay royalties to the songwriter, music composer, and publisher (copyright holders).

Robert

One way or the other the RIAA (who are the ones behind this) will destroy music as we know it. Over the past 50 years of their existence the RIAA has managed to make it so an artist only receives on average 50 cents out of 15.00 for a new CD. The member labels know this and are trying to extract every last cent it can from every source just to stay alive. Go ahead, charge royalties on the radio. Radio stops playing your music. Then go after places like MTV and they stop too. Guess where people will end up getting exposed to new music – NOWHERE.

Good job RIAA! You’re closer than ever to destroying your industry.

Paul

You have it bass-ackwards. The government should not be involved in the obligations of the distributors of copyrighted content. That relationship should be completely private.

Lou Covey

This could be great news for local indie bands. Radio stations would have to balance the cost of playing big-name groups’ music agains what would probably be a bargain from local groups that have no label. I remember when KSAN in SF used to play a lot of unknowns (like the Doobie Brothers, Tower of Power and Jefferson Airplane) before anyone every signed them to labels. Today we have huge broadcast conglomerates working hand in glove with recording companies and shutting out the indies. Local radio could have a competitive advantage by shifting over to local groups.

Rags

GreenTambourine,

That’s right! The labels have indeed paid in-cash and in-kind to get radio to play them. But the principle of paying for the commercial exploitation of intellectual property should still apply. The labels could always then choose to waive this (and effectively drive down the cost of their payola).

GreenTambourine

So let me get this straight: For decades the labels have thrown everything from Cadillacs to call-girls for radio dee-jays to play their music. Now all of the sudden, they want radio to pay them? I always love it when rich Hollywood moguls fly in to Washington in their private jets to ask Congress for more money.

Dilip

Hey,
There is a fun talk at Stanford Grad School of Business on March 17th. MC Hammer and the manager of Death Cab for Cutie are going to be there among other distinguished panelists from Tapulous, Mozes…
Check it out…
http://www.vlab.org/article.html?aid=260

eas

What’s even more absurd is that radio pays a royalty to the songwriters. It’s just the performers getting screwed. This may have made sense when selling concert tickets was more important than selling recordings, but it’s been the better part of a century since that was the case.

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