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Radio May Have To Pay To Play
devjj writes "Ars Technica reports that Congress is considering two bills that will remove the exemption terrestrial radio broadcasters currently enjoy that allows them to broadcast music without compensating the artists or labels for it. In the current dispensation only songwriters get paid. The National Association of Broadcasters is furious at the RIAA, which is pushing repeal of the exemptions, and has responded by agreeing that artists need better compensation — and is asking Congress to investigate modern recording contracts. "
See The New Yorker for more information.
All the RIAA is going to do is find a way to pay the radio stations what they pay in royalties, and then charge that cost back to the artists via some "promotional fee" or other such garbage.
The only solution to getting artists paid is the death of the RIAA and its component companies.
You're confusing performance royalties with copyright royalties. All radio stations, Canadian and US, pay performance royalties - about 1.7% of revenue. College stations typically pay a flat fee of $450/year. RIAA wants stations to pay, in addition to performance royalties, copyright royalties of about 7.5% of revenue - with low income stations paying $5000/year.
You've got it backwards. All stations - Terrestrial and over-the-air - pay royalties to the copyright holder of the song itself. These royalties are paid to organizations like ASCAP and BMI, who then distribute the money to the songwriter. The royalties this article discusses are collected by SoundExchange on behalf of the copyright holder of the "performance" of the song (ie the recording the radio station plays). This copyright is generally held by the record company.
Terrestrial stations have so far been exempt from paying the performance royalties, but it looks like that may change.
I don't care why you're posting AC
Sorry, but you're displaying a fundamental lack of understanding about how radio works (from a financial point of view), along with a lack of knowledge of radio history. Understandable, because no one knows this stuff anymore except for telecom geeks.
Playing music over the radio has, since it's inception, been about advertising to promote sales of music (records, sheet music), advertising to promote attendance at live events, and to provide programming to attract listeners for, of course, advertising other goods and services. In the last case, think of how flowers use nectar to attract bees. Giving away nectar is just a cost of doing business if you want to be polinated.
Of course, it isn't a perfect analogy, because unlike flowers, radio stations aren't producing what they're giving away.
What radio explicitely hasn't been is a revenue source for song performers. Song writers, absolutely. I'll leave it up to you to look up the ASCAP / BMI controversy of 1939/1940.
In fact, what is amazing about this is that, were the RIAA's proposal to be adopted, it would end up setting up a system exactly the opposite of the Payola scandal, where record producers paid / bribed radio station employees and execs to play records.
I also have to wondeder what ASCAP and BMI will think of this. If this proposal results in a drop in radio play, then payments to songwriters (as opposed to song performers) will fall.
Oh, and this could definitely blow up in the RIAA's face. Clear Channel, Infinity and the like are notorious for being very, very tough business people. If this proposal goes through, and if they aren't able to negotiate a miniscule enough rate per play, I wouldn't put it past them to start buying up the larger RIAA members, just to get their music catalogs. Would there be anti-trust implications? Sure. Would it be worth a few tens of millions here or there to try. Absolutely.