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Legislation Would Force Radio Stations To Pay Royalties

Posted by Soulskill on from the scrounging-for-pennies dept.

Major Blud writes: Congressman Jerrold Nadler (D-NY) and Marsha Blackburn (R-TN) introduced the "Fair Play Fair Pay Act" today that would end regulations that allow terrestrial radio stations to avoid paying royalties to artists and labels. Currently, AM/FM radio stations aren't required to pay royalties to publishers and songwriters. The proposed measure requires stations that earn less than $1 million a year in revenue to pay $500 annually. For nonprofit public, college and other non-commercial broadcasters, the fee would be $100 per year. Religious and talk stations would be exempt from any payments. Larger radio companies like iHeartMedia (858 stations in the U.S.) would have to pay more.

"The current system is antiquated and broken. It pits technologies against each other, and allows certain services to get away with paying little or nothing to artists. For decades, AM/FM radio has used whatever music it wants without paying a cent to the musicians, vocalists, and labels that created it. Satellite radio has paid below market royalties for the music it uses, growing into a multibillion dollar business on the back of an illogical 'grandfathered' royalty standard that is now almost two decades old," said Congressman Nadler.

14 of 218 comments (clear)

  1. ASCAP and BMI by Sylak · · Score: 5, Interesting

    So what you're saying is my college radio didn't need to pay ASCAP and BMI?

    1. Re:ASCAP and BMI by mveloso · · Score: 5, Insightful

      Those are licenses, not royalties. If you want an example of how to make licensing so complicated that it's incomprehensible, read up on music licensing and royalties. Licensing to ASCAP/BMI is not a royalty - it's a license. I would think that BMI/ASCAP would pay royalties as part of the license fee, but it sounds like they don't.

      Someone needs to come out with a diagram of how, what, and who gets paid in the music business.

    2. Re:ASCAP and BMI by dgatwood · · Score: 5, Informative

      Those are licenses, not royalties.

      You are technically correct—the best kind of correct.

      Radio stations pay licensing fees to ASCAP and BMI, who in turn pay the composers and publishers proportionally based on the percentage of airplay (and concerts and other performances) that their songs received. They do not pay the artists or the record companies, so the article is correct in that regard. But yes, they most certainly do pay the composers and publishers, albeit indirectly. That's the whole reason those performance rights organizations exist.

      There is a caveat, however. Not all radio stations are considered "reporting stations". I know our college radio station diligently logged our plays for reporting purposes, but when it comes to actual royalty payouts, those organizations use a random sampling of radio stations, rather than tallying every song on every station. If your music is played only on a small number of radio stations, there's a good chance you won't get paid because you won't show up in their sampling. Now over time, they're getting closer and closer to full reporting, so this is becoming less of a problem, but it is something to keep in mind.

      In any case, I would say that the summary is just plain wrong. In effect, radio stations pay royalties (indirectly) to composers and publishers, but not to performers and record labels.

      --

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    3. Re:ASCAP and BMI by gumbi+west · · Score: 4, Insightful

      The flip side of the sampling is that there is some near (but not exactly) zero play bands getting far more than their share of royalties. Basically, they face a very imprecise but accurate estimate of their payout.

    4. Re:ASCAP and BMI by davester666 · · Score: 5, Funny

      I reject the very idea that the system could possibly be gamed for the general advantage of the major labels and their most popular bands.

      --
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    5. Re:ASCAP and BMI by sg_oneill · · Score: 4, Interesting

      Yeah I can attest to this. I know for a fact my album was played a number of times on various US radio stations, but acording to ASCAP it never was at all.

      Which is kind of annoying, because at least one of those stations was fairly big in California . if I'm not mistaken.

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    6. Re:ASCAP and BMI by Anonymous Coward · · Score: 4, Informative

      "Basically, they face a very imprecise but accurate estimate of their payout."

      Wouldn't that be the other way around?

      You have your precision, 0.0001% of airplay, but your accuracy is off. If a value has fine precision, but based on "loose" information, you can get precision without accuracy. Saying pi is 1.23456789098765432 is very precise, but saying it is 3 is more accurate. Random sampling would get you a precise number when you do your division, but if the sampling size is too small, it would be inaccurate.

      Let's say you have 100 stations, but only sample 8 stations, playing 100 songs each.. Only 1 station plays Two Tons of Steel's "Death Trap" and reports it. They love the song and played it 5 times. That one station is in your sample of 8 stations. You do the numbers, and TTS have 5 of the 800 plays in the sample. TTS gets 0.625% of airtime. A nice precise number. However, it is inaccurate by an order of magnitude. They got 0.05% of airtime.

  2. School of Rock by Fireflymantis · · Score: 4, Insightful

    Dewey: Oh, you wanna learn something?

    Summer: Yes, I do.

    Dewey: You want me to teach you something? [most of the students nod] Here's a useful lesson for you: give up. Just quit. Because in this life, you can't win. Sure, you can try. [really getting angry] But in the end you're just gonna lose, BIG TIME. Because THE WORLD is run by the Man.

    Frankie: Who?

    Dewey: The Man. Oh, you don't know the Man? [class shakes their heads] He's everywhere. In the White House, down the hall, MISS MULLINS, she's the Man. And the Man ruined the ozone, and he's burning down the Amazon, and he kidnapped Shamu and put her in a chlorine tank! Okay? And there used to be a way to stick it to The Man. It was called rock ‘n’ roll. But guess what. Oh, no. The Man ruined that too with a little thing called MTV! So don’t waste your time trying to make anything cool or pure or awesome, because The Man’s just going to call you a fat, washed up loser and crush your soul. So do yourselves a favor and just GIVE UP!!!

  3. Free advertising by ShaunC · · Score: 5, Interesting

    For decades, AM/FM radio has used whatever music it wants without paying a cent to the musicians, vocalists, and labels that created it.

    That's because radio is free advertising for the artists. Now they want the free advertising and to get paid for it, too? In decades past, the labels would bribe radio station PD's to get their music played; I wonder if they'd rather return to that model where it costs them money (and coke, and cars, and plane tickets) to get their artists some airtime?

    Speaking of payola, it should come as no surprise that "TV/Movies/Music" are among the top 3 industries donating money to both Mr. Nadler and Ms. Blackburn.

    --
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    1. Re:Free advertising by Jason+Levine · · Score: 4, Insightful

      I think it's more along the lines of: Internet Radio came along and the music industry wanted them to pay royalties because "Internet" equals "One Step Away From Piracy." They wouldn't let their music near the "PiracyNet" unless they were compensated first. Fine, so the Internet Radio companies paid them. Now, however, the executives got greedier and noticed that Internet Radio was paying them while Non-Internet Radio wasn't. Greedy executives saw dollar signs and decided that this couldn't stand so they got their buddies in Congress to put forward legislation to force everyone to pay them royalties. (Oops. I mean every Radio company. The "everyone needs to pay $X a month to the music industry no matter what you do" legislation is still being ironed out.)

      --
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    2. Re:Free advertising by jandrese · · Score: 4, Insightful

      In decades past, the labels would bribe radio station PD's to get their music played

      It's much more efficient now. Everybody is owned by the same megacorps so there doesn't have to be any "corruption" to make sure only your artists get airtime.

      --

      I read the internet for the articles.
  4. BULL$#1T by chromaexcursion · · Score: 4, Insightful

    There's NOTHING in the bill that would pay artists,
    only record companies.
    As to the comments on ASCAP and BMI. In most cases "license fees" are another term for royalties. And in this case they are.
    This is more backdoor BS by the record company shills.

  5. And why would that be? by fuzzyfuzzyfungus · · Score: 4, Insightful

    What principled justification would there be for excluding 'religious' and 'talk' stations from payment? One would think that any 'religious' station would either be a nonprofit or deserve to pay like any other business; and 'talk' is huge business, and presumably not a terribly heavy consumer of music.

    I can take a few guesses about the pragmatic political considerations for those exemptions; but they aren't exactly complementary.

  6. Re:Should really be named by Froboz23 · · Score: 4, Funny

    Legislation killed the radio star...

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