| NAB: 75% Of Americans Oppose Performance Royalty |
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FMQB.com (October 15, 2009)
According to a new poll commissioned by the National Association of Broadcasters (NAB), the majority of Americans oppose the proposed performance royalty rate for radio. The poll, conducted August 24-31, randomly surveyed 1,000 likely voters nationwide to examine America's attitude toward the controversial issue. Participants were questioned on their knowledge of the proposed legislation, and were given additional information about the issue from a May 6 article published by The Wall Street Journal. You can read the complete article at http://www.fmqb.com/article.asp?id=1547493
LARadio.com also featured the following article in which SCBA president Mary Beth Garber addressed the topic.
(October 13, 2009) Last week the Huffington Post published an article titled “Radio Will Stop Playing Music,” written by Tamara Conniff, former chief editor of Billboard Magazine. In part she wrote: “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.”
Mary Beth Garber, president of the Southern California Broadcasters association sent a response to LARadio for publication:
Every radio station in America would, we’re sure, be willing to give a share of all the money they make charging people to listen to the performers’ songs. That’s because not one cent of our revenue comes from that. Not one cent. Unlike Satellite Radio and many Internet-only music sites, we do not charge a fee to listen to our content.
Our revenue comes from developing our radio stations into intellectual properties – brands – just as the performers do. We pay dearly to create and maintain those brands. We pay on air talent [more intellectual property]. We pay promotional costs. We pay people behind the scenes to produce the content we provide, and to select and program our content, including musical content.
We charge advertisers for access to our product [our brand], to promote their products. We give that access to performers in exchange for access to their product [their brands]. The performers are welcome to a share of the revenue we get as a result of creating and sustaining our brands – as long as they’ll also pay a fair share for the costs of doing that.
Actually, that is exactly what we are doing and have been doing all along – they use our brands to promote their brands in exchange for providing some of the content for our brands. We do not ask for a share of their product revenue and they do not ask for a share of ours.
If KIIS/fm [Ryan Seacrest is the dj in the mornings, it’s one of the top rated stations targeting young people in the U.S.] doesn’t play a new artist, no one is likely to notice or care. But if KIIS/fm does play that artist, it will make that artist into a Brand. We trade a share of one intellectual property for a share of another. It costs a fortune to create and sustain KIIS/fm as a brand. Who is protecting the rights to KIIS/fm’s intellectual property? They get no government subsidies. They don’t charge artists for access to their brand. They trade intellectual property access for intellectual property access. And the artists get the better end of that deal [they don’t have to pay Ryan Seacrest’s salary].
So the system – the business model – is fair and sustainable.
And as for the likelihood of the artists getting 50% of anything, dream on. The labels – most of which are located outside the U.S., by the way, will get 100% of the fee, and they will parcel out what they decide is left after deducting ‘fees’ for their artists. That takes a long time. Some artists don’t get paid for years, many have to sue. And, outside of the few top billing acts in the world, none of them actually make 50% of any royalties paid by any revenue source that goes through the labels.
As for the other countries’ radio stations paying royalties – check out how many of them also get government subsidies and have government regulations about what music they are allowed to play, and in what proportion. Check out how many of them actually do charge artists to play their material. And then, let’s get real – how many global ‘hits’ have been made based on airplay in France? Why do you think the mantra of label management is ‘get it on the radio in U.S.’ Ask RCA’s Peter Gray. Ask Clive Davis. Both have done interviews in the past year talking about how getting a song played on radio in the U.S. is what makes a hit. And they want us to pay them to be able to make that money?
Can you find me another business where that business model is in play? I can’t imagine a Venture Capitalist would consider investing in it if it were.
Think it through all the way, Ms. Conniff. Of course radio should not also pay artists to develop their own brands so they and their labels alone can benefit from the publicity and promotion.
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