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Radio Royalty Legislation Described As 'RIAA Bailout'
An anonymous reader tips an article at TechDirt about draft legislation from Representative Jerry Nadler (D-NY) that would dramatically increase the music royalty fees for cable and satellite radio to put them at the same level as internet radio streaming. TechDirt calls this the 'RIAA Bailout Act of 2012' and says the RIAA has been pursuing similar legislation to increase royalty rates for terrestrial radio as well.
"As it stands now, the rates are so damaging that Pandora — the top player in the space — has made it clear it may never be profitable. Yes, never. Nadler's bill would effectively make sure that no one else in that market would be profitable either. The end result? Many of these services don't exist or never get started. That would actually mean fewer services, fewer listeners and lower royalties. It's almost as if he has no concept of price elasticity. Lower prices can create higher total income. Also, the idea that any particular Congressional Rep. should be (effectively) determining what the "fair" price is for anything is, well, horrifying. "
Seems they (the RIAA) would rather take nothing, and blame it on piracy, than take something!
"For every expert, there is an equal and opposite expert"
the government we currently have wants to control everything. 'spread the wealth around' i think is the catch-phrase
Nadler's bill would effectively make sure that no one else in that market would be profitable either. The end result? Many of these services don't exist or never get started.
I think that's quite the desired effect by the RIAA, to repress technologies and services. This is a deep rooted mentality that has been "proven" in their eyes by cassette tapes (remember when people were duping records and recording radio plays and that was destroying everything?) and Napster and Bittorrent -- all new technologies that they attribute with the decline of their iron grip on their "consumers." Internet radio is just the latest demon and, of course, if their profits slide it will be the new scapegoat. The article notices this as well:
“Congressman Nadler’s discussion draft would only perpetuate this hypocrisy and worsen an already flawed legislative mistake that is discriminating against new technology and hampering innovation,"
I do slightly object to this statement:
t's almost as if he has no concept of price elasticity. Lower prices can create higher total income.
No, I disagree with you there. I think services like Amazon and iTunes have shown them this and they reject that concept anyway. They built up their empires by reducing the diversity of music and creating a single song that everyone had to have. Radio jockeys play it 24/7, the Billboard Top 100 tells you what it is and it's basically slammed down your throat everywhere. This strategy payed off very well for them for quite some time. They wanted to reduce the amount of music you wanted or desired and price it out at $18 for the album. Everybody had to buy it and that's why you can pick up New Kids on the Block or Brittany Spears albums at your local thrift store for pennies now. And that's the best way the RIAA could have it since everyone got sick of that music, burned out on it and had to have the next $18 album that they were told to buy. Since everyone had to buy it that was $18 * tons of money.
Now new technology comes along and offers a more diverse music repertoire and the possibility of buying that single song and *GASP* radio jockeys that aren't yoked into playing the same goddamn song over and over again. And this frightens the music executives. They know about price elasticity, they just don't want the profits they should be making and instead wish to return to a simpler time when they told you what to pay and everyone paid that because there was no other option and society was shoving it down their throats. Lower prices CAN create higher profits but the way the RIAA has been running the show means it probably will not.
My work here is dung.
Can somebody explain why the government is involved in this at all? Why are royalty fees simply negotiated between the licensor and licensee?
This is not like utilities, food, or health care where we need to prevent an oligarchy from profiteering by withholding necessities. If you do not agree to the fees, do not license the content.
Go green: turn off your refrigerator.
Lower prices can create higher total income.
This is true when the lower price generates more sales. This is not happening in the music world.
People are buying single tracks or tuning into Pandora instead of building up a collection of CDs. This benefits the consumer because it is much more efficient to listen to music this way.
i.e. the new cost structure of the internet means that the consumer reap most of the rewards of improved efficiency. I am not a friend of the RIAA but I do recognize that they have left the land of honey and milk for a barren desert.
The entitlement mentality of the RIAA is astounding.
Radio has for decades played their songs as advertising. In the past record companies have gotten in trouble for paying radio stations to play certain music.
Now they want to have their cake and eat it too.
There is NO DIFFERENCE between the radio playing the song and a streaming service playing the song. It is still advertising for the record company. I have bought many songs after hearing them on a streaming service. I also already own many songs that play on streaming services I listen to. The record company being paid per play by streaming services is obnoxious crap.
I always smile when I think of how badly Apple and Amazon screwed over the record companies in providing access to digital versions of their music. They had the ability to build their own stores and they were idiotic enough to fail and it the process hand over billions to companies that laid the digital groundwork for them. True, record companies make money from Amazon and Apple, but Amazon and Apple make money off the record companies too _and_ they completely control the ecosystem.
I'm anxiously waiting for Apple, Amazon, and Google to start getting into the business of distributing artists songs just like they do for app developers. They could also use their promotional capabilities to drive sales for these artists. Sales where they make more money than selling what the record companies give them. When this happens the writing will be on the wall and the record companies will finally die the death they so deserve.
Nadler's bill would effectively make sure that no one else in that market would be profitable either. The end result? Many of these services don't exist or never get started. That would actually mean fewer services, fewer listeners and lower royalties. It's almost as if he has no concept of price elasticity. Lower prices can create higher total income.
This is too simplistic of a view. By limiting the number of stations that can play music you licence, you will make less money on the licencing, sure. But you also will have more control over what plays on the airwaves (or satallite waves, etc). By playing king-maker for what's hot and what's not you end up making far more money in the long run. The music industry has to compete with it's back catalog, all the way back to when music was first recorded. They need some way to get people to buy current music over the greatest of the past. They do this by controlling what becomes popular.
-- ssoorrrryy,, dduupplleexx sswwiittcchh oonn.. -Quote found on actual fortune cookie.
I'm still not sure, what is RIAA's purpose? The artists compose and perform the music, the distributors (radio stations, iTunes, Google Play, Pandora and P2P etc) distribute that music to the masses. What is RIAA's role in this ecosystem? Where does RIAA fit?
When RIAA music becomes prohibitively expensive for radio stations, non-RIAA music will get more airplay and exposure.
In every dying industry that made loads of money in its heyday, they're whining to Congress.
The correct action is to let them die out.
However, the most steady trait of corporate fat cats is they are all for the free market in public but are the first the whine about it when the market turns against them.
Wrong. See also 9.2, the "3 step test".
There is no way to make sure you don't get sued. Wrong goal.
Realistically....you can't do fuck all.
In reality, if someone wants to try to sue the pants off you, they will. Hell, you could get sued by some asshole that hasn't even released a song yet but can (try to) show that he wrote similar music or lyrics before you did.
There's nothing you can do to protect yourself. NOTHING.
Of course....what the industry doesn't tell you...they can't protect you either against some lunatic asshole that thinks (correct or not) that you ripped off his creation.
So realistically....you're fucked whether you release RIAA or indie. So just don't be that asshole that releases with the RIAA.
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And it's so common that the example that immediately popped into your brain happened 40 years ago.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
You do all realize that this is precisely the argument used to lower taxes in general, right? And specifically, to lower taxes on businesses. If we replace "royalty" with "tax" and "Pandora" with "every small business in America", then you have the exact argument that Republicans use to support tax breaks.
Just thought I'd point that out. So, in order to be intellectually consistent, should we also support Republicans on the tax breaks? Should we slash taxes to encourage economic growth?