RSSCongress Considers Performance Royalties for Terrestrial Radio
By Scott M. Fulton, III | Published July 31, 2007, 11:25 AM
Since the inception of the medium, American radio broadcasters have been exempt from paying royalties to song performers (though not songwriters), on the theory that radio already provided a service to performers in the form of promotion. But with Internet radio, satellite radio, and MP3 distribution having radically reformed the music landscape, Congress is asking whether that exemption remains valid.
At issue is much of the business model of the American broadcasting industry, which has already seen tremendous change over the last decade with the consolidation of station ownership among a handful of companies, such as Clear Channel.
With members on both sides of the House Subcommittee on the Courts, the Internet, and Intellectual Property appearing united behind the ideal of charging broadcasters performers' royalties in the interest of "restoring parity," the balance would seem to be overwhelmingly tipped toward lifting the long-standing radio station exemption from owing performance royalties.
Part of the reason for considering lifting the exemption may be to help soften the blow for the performance royalty firm SoundExchange, if Congress should decide -- which appears likely -- to support legislation that reduces Internet radio's performance royalty commitment to a level on a par with satellite radio. If SoundExchange were to receive revenue from a new and already very well-developed source, it may be less willing to put up a fight.
Still, major radio broadcasters face the prospect of being financially responsible for the shifting landscape of music distribution. As the sole representative of the broadcast industry -- Charles Warfield, president and COO of ICBC Broadcast Holdings -- made clear, payments to royalties organizations would have to be compensated for somehow.
Stations may have to increase advertisements, and potentially reduce commitments to public service such as news and traffic - which relaxations in FCC regulations in recent years, ironically, would enable them to do.
For more: Lopsided Case for Performers' Royalties Made by House Subcommittee
What's really funny is that this would result in a circle of money. Radio stations that pay record labels for broadcast rights->Record labels that pay radio stations to promote certain songs. http://en.wikipedia.org/wiki/Payola
Just how much more corrupt can this thing get???
At an even higher level, all these $$$ will most likely be reported as revenue and included in GDP numbers, etc... in representing "the economy." Yet, the money is not *really* doing anything except circling around and around not making profit or loss....but represents a loss due to inflation.
Score: 0
|If this concept wasn't such a subterfuge it could be a terrific idea. If performance royalties were paid directly to performers, artists would not only receive compensation for their work, but it might provide an incentive for artists to bypass the major labels and market their work directly through independent labels or using alternative marketing schemas - particularly where those distribution methods were not aligned with the RIAA.
The problem is that Congress is really not considering directly paying performers, but rather paying the owners of the recorded compositions, which are the record labels themselves. The present artist/label contract schemes result in record companies actually deducting promotional costs from artists royalties. This includes costs of CDs and promotional materials sent to broadcasters. The proposed legislation would do nothing more than result in the recoding labels being paid performance royalties then deducting promotional and record keeping costs from the artists royalties and advances. In the end the artists get the shaft and the record companies generate additional revenues courtesy of the government.
Given that the labels have control over these promotional expenses this legislation would likely provide additional leverage to record companies and little benefit to the majority of performing artists. Unless the legislation was to specifically require payment to the artists themselves this entire concept is nothing less than a scam designed to provide revenues for the recording industry - not performers. Even then the record labels would likely change contract wording so that artists would have to share their performance royalties, just as the labels have already managed to tap into songwriting royalties by incorporating shared publishing/sonwriting revenues into contracts.
Score: 0
|Does this surprise anyone at all? Nobody saw this coming at all? We're talking about the RIAA pushing legislation here, people who sue for what was it again? 1.65 TRILLION dollars???
Come on, didn't you realize they have to make up for all those billions of illegal downloads of Britney Spears, Metallica, and Creed songs....
Score: 0
|Does playing an artists song on the radio still help promote them? Yes, it does. What is the question here, is congress completely retarded?
No, they've been bought and paid for by the RIAA. Common knowledge by now, I'm surprised they didn't do this earlier. If they could they'd charge people royalties for listening to songs in their head. I don't really care though, I haven't listened to the radio in over a decade now with all the commercials and the horrible sh*t they try to pass off as music.
Score: 0
|Good, charge Clear Channel up one side and down the other. It would be a good a**hole tax for ruining FM radio.
I stopped listening to radio years ago because of companies like Clear Channel. So they can increase commercials all they want, it won't effect me..:)
Score: 0
|Insane.
Here's a radical idea: How about making "performers" actually go out on the road and "perform" for a living.
Obviously, all this "piracy" and "revenue margin decrease" they talk about hasn't hurt their ability to showcase their ginormous mansions and 50 cars on MTV Cribs. They look so poor, don't they?
Score: 0
|This is not about putting down clear channel, but about GREED. It's not good enough that a radio station plays your song, and if it's popular is your ticket to stardom.
Now if you wrote the song, you get a payment in exchange for the playing of your song. Now the lazy A**D performers, who(these days can barely sing) want yet another piece of the pie.
The world is getting out of hand...
Score: 0
|I agree in theory, but I do support this because it's ridiculous that satellite radio and internet radio are expected to pay royalties for every performance but broadcast radio doesn't have to pay s***. It should either be everyone or no one, as the current scheme is essentially a subsidy for broadcast radio.
Score: 0
|Based upon how you read the CRB/SoundExchange legal implications, they have the sole rights to collect royalties even if YOU post YOUR OWN song on YOUR OWN web site for public download. Regardless of whether you involve RIAA at all. Something is really wrong with that.
Score: 0
|