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    • Sat Mar 1st 08:56 AM | Rating: 0 0
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      The Radio and Recording Industries' Unnecessary Roughness
      Good attempt at balancing views but there are quite a few holes in this article, relative to forcing radio to start paying a "performance fee."

      First, address your statement "This exemption of payment obligation for performance rights on radio has been routinely debated between the radio and recording industries for more than 70 years through numerous legal proceedings and Congressional actions..." After nearly thirty years in radio, I'm at a loss to come up with one time this issue was mentioned before a few years ago. I remember having record label promo people knocking down my door to get a record on air; in some cases leaving limos outside the station, with illegal substances in the backseat, so I could "go out for the night to unwind."

      Before this mess began the record industry was paying millions of dollars annually in payolla to get their music played - sounds like record execs thought there was some value in having their music on the radio. Audience numbers have not degenerated enough to warrant a complete reversal in the business model. Could it be that the record industry has butchered itself over the past fifteen years and now needs another revenue source?

      Here's another of your comments that needs to be addressed: "They [labels] further lobbied Sound Exchange, the independent, nonprofit performance rights organization that is designated by the U.S. Copyright Office to collect and distribute digital performance royalties, to push for an increase in royalty rates collected from the likes of internet and satellite radio companies who use their musical performances." Sound Exchange is about as "independent"... from the music industry as my brother is to me. SE was a radio industry creation that was forced to declare it an independent company in the early days of CRB. SE is still very much under the thumb of the record industry.

      Next, you declare "After receiving some backlash from internet radio start-ups, Sound Exchange was forced to modify their positions somewhat to this end." Where did you get your information? Or, is the word "somewhat" code for "we'll rape you this year, then rape you with the same force again next year instead of raising the violence level." The only modification to these outrageous performance fees is in extending the exceedingly high payment through 2010, instead of raising them annually. An "oh, by the way" on this is that there are caps in this offer that keep internet radio stations well-below audience levels needed for creating a viable business. Exceed the cap and you pay the higher fee.

      Sound Exchange is still in a battle with all except a few entities that have signed - each of these granted exceptions by SE because they effect so little of overall airplay - ie: college radio. Religious broadcasters and NPR are also very close to an agreement with SE. But talk to anyone outside of these circles and you'll find having Sound Exchange respond to any proposal to change the rate is akin to getting rid of leech that's clamped on to the middle of your back. (Disclaimer: I am very close to these negotiations.)

      Performers should be paid. It's "who" should pay them that's the question. As the record industry started down its path of forcing low-quality songs on the public, not-so-cleverly hidden within the one or two good tracks on an album, performers had their own deal with each label. What's changed which now forces performers to ask for payment from the one industry that gives them exposure?

      Yes, we now have the internet. But it's still a near impossible job to put out a song/album and have it discovered online. As for Satellite Radio, do the math - 15 million national subscribers split between 200+ channels and two companies doesn't get you a large amount of exposure (especially when many of these subscribers are still in cars parked on auto dealers lots). Downloading? It's still illegal if the public doesn't pay. But that's a record industry problem, not radio.

      I've not been a friend to the radio industry since consolidation, and still feel it stumbles every time it takes its foot out of its mouth. But here are reasons why terrestrial radio should not have to pay a performance fee; 1) It already pays BMI, ASCAP, and SESAC. 2) Musicians and artists receive their session fees and whatever meager percentages the record industry lets them have. Performers know this is a rough business before getting in, and they sign their deal with labels (hopefully) after reading the contract.

      The one question I'm still waiting to hear answered - if label logic is used - is "why should a new artist be paid the same amount of royalty/performance fee as an established act is paid? Then, you can ask, "What was it that drove the established artist to become "established"... I'm willing to bet it wasn't selling songs out of the trunk of their car.

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