Back in the early days of AM radio (1939 to be exact), stations convinced the record labels that they were a promotional arm to help them sell records. Thus, radio didn’t have to pay the acts or labels any royalties. That argument worked. And the record companies and artists who perform the music for decades have been unable to change that.

Over the years, this has cost acts and labels billions of dollars, saving terrestial radio stations an equal amount.

Now the federal government is trying to change that. The Performance Rights Act passed out of the House Judiciary Committee this week and will be acted on by the full House soon. The National Association of Broadcasters has aggressively lobbied to fight against this bill, but the Recording Industry of America and a coalition called MusicFirst (formed in 2007) have put together an impressive campaign to support this bill.

As Forbes notes, the bottom line is: should a business that profits from the intellectual property of someone else be required to compensate that person?

In an odd loophole, radio stations have had to pay the composers of the songs, not the people who perform the songs. (Those are two different copyrights.) Most other countries require payment for both copyrights. Radio stations shell out $450 million a year to composers or about 3 percent of their revenue. Artists and music labels are seeking a similar amount.

Smaller stations and non commercial stations would have royalties capped (from $500 to $5,000 a year). For bigger stations, fees would be negotiated.

Already, satellite radio and cable music stations, as well as Internet-only stations, pay royalties to artists and composers.

Gary Lewis, who runs Cumulus Atlanta (Q100, Rock 100.5), said he believes terrestial radio still provides plenty of firepower in terms of selling downloads or CDs, be it Shinedown or Lady Gaga. “We generate demand,” he said.

And he noted that the “label conglomerates, largely European owned, are looking to find new sources of revenue to offset their declining sales as people find alternative means of music distribution.”

Lewis also said radio stations are struggling and many who are barely getting by could go under as a result of paying, say, three percent of revenue to artists and labels.

These arguments have been effective in getting many House members to go against the bill and the NAB has claimed to have garnered a majority.

“The members of Congress just simply aren’t buying the argument that radio stations ought to be taxed to make up for the struggling business model of the record labels,” NAB spokesman Dennis Wharton told the Associated Press Tuesday.

Martin Machowsky, a spokesman for MusicFirst Coalition (which includes record labels and recording artists), said all other platforms which help promote music pay royalties and those platforms are becoming more important as radio’s influence wanes.

He estimates artists and labels are being deprived $300 to $400 million a year. And he said most foreign countries provide royalties to recording artists and record labels and the others who don’t include Iran, China and North Korea, not bastions for freedom of speech.

Machowky also argues that most music played on FM radio is oldies, songs that hardly gain sales or even need the promotional aspect of radio. And he said there is evidence radio can be a substitute for purchasing music, not a driver.

“There’s a fundamental notion that it’s unfair,” he said. “Radio’s arguments have withered over time.”

I have mixed feelings about this. One one side, I think the artists should get paid. On the other side, I would hate to see radio go under because they can't afford to pay artist royalties.

Cathy Hughes, with Radio One, has launched a major campaign on all of her stations against this bill because she doesn't want to pay anything.

We'll see what happens.

I'd like to see the stations have to pay the labels because it would always cause tension between the two groups. Hopefully the stations would get so tired of paying the labels that they would start playing homemade CDs from bands that have no record label whatsoever and we might finally get a style change. And if they didn't, maybe it would be such a constant fight between the stations and the labels that both of them would go under. Either way, it's a win win situation.
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[Edited 6/4/09 7:40am]

I agree with Vainandy. Start playing songs outside of BMI, Ascap and Sesac. Play some independents. Hell I know tons of artists who would just love for you to play there song for free just to get some recognition. There are plenty of artists who are under a Creative Commons copyright who you could play for free. Yes Vainandy, this will bring about a big style change.

Greed and more greed.

daytonohioplayer said:

ASCAP, BMI, SESAC are only publishing companies, not record companies. Andy is referring to record companies (Warner Bros., Sony, Universal, etc.).

daPrettyman said:

Don't the radio stations pay the publishers?
[Edited 6/4/09 8:16am]

At the risk of being unclear, my original thought is they should play songs from anywhere as long as it is good music. Play music outside of the major labels and the big 3 (ascap, bmi and sesac) Maybe its a pipe dream!! LOL!

daytonohioplayer said:

Yes, publishing is for the song itself, not the recording. Publishers (ASCAP, BMI, etc.) handle paying the royalties of the music back to the songwriter. Record companies handle the promotion and distribution of the music of the artist. They pay the artist for the recording itself.

daytonohioplayer said:

I agree, but all songs are published via ASCAP, BMI, etc. You don't want to get rid of those companies. You want to eliminate record companies, not publishing companies. That's how the songwriter gets paid.

Now publishers? You're getting complicated now and I don't know how it all works when it gets that detailed. All I know is, I want this damn shit hop out of style by any means necessary.

vainandy said:

I could live with that.

So, in most countries there is a royalty paid to both the songwriters (or whoever owns the publishing for the songs) AND mechanical royalties to the performers?


Well...that seems fair, to me. I can't see any argument why the performer shouldn't get paid. I can see how there could be an argument as to what percentage they get, especially compared to the songwriters share, but to say they shouldn't get paid at all makes no sense.

vainandy said:

I'll keep this basic and maybe it will help.

Radio stations specifically already pay licensing fees to BMI/ASCAP/SESAC based on their playlists.
The majority of fees collected, go to the writers and publishers of the songs on these playlists as royalty payments. That's the way it's been and the way it should stay imo.

Q: What does a publisher do to justify their getting paid?
A: It's the publisher's job to exploit (a good thing in this case) the writer's song catalog.
Exploit = filing copyright papers, getting songs placed (with other artists, TV, movies, commercials), collecting necessary royalties, etc. In many cases the artist has their own publishing company (a smart business move) however negotiating a deal (and thereby spliting any incoming royalties) with a more established publishing company can be beneficial.

Q: And why would a writer with his own publishing company enter into this kind of deal and split their publishing income?
A: Generally this would occur with a publishing company that is more "connected" and has a track record of getting songs placed in the places described above. The bottom line here is that 50% (or whatever the negotiated percentage is) of something is obviously better than 100% of nothing.


I feel that if a record company does their job of putting out a quality product that the public wants to buy, that's where their money should come from.

In the case of performers (the "artist") i'm a little more sympathetic.
However ideally, if they don't write, they should be talented enough to make their money from being performers in a live setting.

The real trick here is to somehow break the radio station's Playlist Blockade and opening it up to more (hopefully better) music.



tA

Tribal Disorder

http://www.soundclick.com...dID=182431

theAudience said:

Very well said. I wish that the "Playlist Blockade" would go away for good. It's so obvious how some stations are getting perks/paid/whatever by listening to playlists. When you hear a block of Universal music (old or new, Motown or Cash Money), it's so obvious.

^ See, we don't really get that in the UK.

We only have a very limited selection of radio stations. Basically, you have the national BBC ones and then a couple of local stations or so.

I don't get the feeling that there's any kind of payola thing going on over here, just shitty music to get to a wide audience to please advertisers, in the case of the commercial stations.

The BBC plays a good mix of music, to be fair, I guess.
[Edited 6/5/09 8:22am]

daytonohioplayer said:

Thus actually SAVING the radio stations ALOT of money.

rocknrolldave said:

Well, paypola is illegal here in the states, but shady practices take place all of the time among record companies and radio stations.

Here in the states, especially in large cities (New York, Los Angeles, Dallas, Houston, Chicago, Miami, etc.) you have a TON of radio stations. Many of them are the same format.

Here is a listing of the ratings in Los Angeles (recent) that shows each station in that area and thier ranking. Notice that many of them are owned by the same company. This gives you a good idea of what it is like across the country with formats and stations.

Station Format Owner
KIIS-FM Top 40/M Clear Channel
KFI-AM Talk Clear Channel
KRTH-FM Classic Hits CBS Radio
KOST-FM AC Clear Channel
KBIG-FM Hot AC Clear Channel
KRCD-FM Spanish Adult Hits Univision
KLSX-FM Top 40/M CBS Radio
KLAX-FM Regional Mexican SBS
KLVE-FM Spanish Cont Univision
KTWV-FM Smooth Jazz CBS Radio
KCBS-FM Adult Hits CBS Radio
KKGO-FM Country Mount Wilson FM
KPWR-FM Top 40/R Emmis
KBUE-FM Regional Mexican Liberman
KROQ-FM Alternative CBS Radio
KNX-AM News CBS Radio
KSCA-FM Regional Mexican Univision
KHHT-FM Rhythmic AC Clear Channel
KYSR-FM Alternative Clear Channel
KLOS-FM Classic Rock Citadel
KABC-AM Talk Citadel
KUSC-FM Classical USC
KXOL-FM Latin Urban SBS
KLYY-FM Spanish Adult Hits Entravision
KMVN-FM Spanish AC Grupo Radio Centro
KPCC-FM N/T Pasadena CC
KSWD-FM AAA Bonneville
KLAC-AM Sports Clear Channel
KFWB-AM News CBS Radio
KDLD-FM Regional Mexican Entravision
KHJ-AM Regional Mexican Liberman
KSSE-FM Spanish Cont Entravision
KRLA-AM Talk Salem
KSPN-AM Sports ABC Radio
KDAY-FM Urban Magic
KFSH-FM Christian Cont. Salem
KWIZ-FM Spanish Variety Liberman
KKLA-FM Religious Salem
KOST-FM STREAM AC Clear Channel
KTLK-AM Talk Clear Channel
KKJZ-FM Jazz CSU-LB
KWVE-FM Religious Calvary Chapel
KCRW-FM Variety Santa Monica CC
KJLH-FM Urban AC Taxi
KDIS-AM Kids Disney
KTNQ-AM Spanish Talk Univision
KFRG-FM Country CBS Radio
KGGI-FM Top 40/R Clear Channel
KOLA-FM Classic Hits Anaheim
KSFV-LP Spanish News Venture
KWKW-AM Spanish Sports Lotus
XEWW-AM Spanish News Clear Channel
KJLL-FM Adult Hits Amaturo
KLAA-AM Sports LAA 1
KSCF-FM Hot AC CBS Radio
KTPI-FM Country Clear Channel
KCAQ-FM Top 40/R Gold Coast
KCEL-FM Regional Mexican Gold Coast
KGIL-AM Talk Mount Wilson FM
KGMX-FM AC Gold Coast
KKZQ-FM Alternative Gold Coast
KLTX-AM Spanish Christian Hi-Favor
KPFK-FM Variety Pacifica
KFMB-FM Adult Hits Midwest TV
KGBB-FM Adult Hits Adelman