This afternoon, Senators Patrick Leahy (D-VT) and Orrin Hatch (R-UT) and Representatives Howard Berman (D-CA) and Darrell Issa (R-CA) introduced legislation that would ensure terrestrial radio compensates artists when their performances are broadcast over the air.
This proposed legislation would make sure all radio platforms are treated equally, and pay a performance royalty to artists. Currently satellite radio, cable radio channels, and Internet radio all pay a royalty for the use of music... AM and FM radio receives the only exemption.
"It's just plain wrong for (terrestrial) radio to be allowed to build profitable businesses with growing revenues on the backs of artists and musicians without paying them fairly for it," said singer-songwriter Tom Waits.
"The bottom line here is that radio plays music to attract listeners and bring in advertising dollars," he said.
We all like lists when it comes to sifting through legislature, especially when it involves royalties, so here's a breakdown:
- Small commercial stations would pay $5,000 per year
- Non-commercial stations such as NPR and college radio stations would pay only $1,000 per year
- Stations that make only incidental uses of music, such as “talk radio” stations, would not pay for that music
- Religious services that are broadcast on radio would be completely exempt.
Over 75% of all commercial radio stations and over 80% of all religious stations would be covered through these accommodations.
Of course, the NAB isn't happy, and quickly issued the following statement... complete with colorful holiday references:
"After decades of Ebenezer Scrooge-like exploitation of countless artists, RIAA and the foreign-owned record labels are singing a new holiday jingle to offset their failing business model," said NAB Executive VP Dennis Wharton.
"NAB will aggressively oppose this brazen attempt to force America's hometown radio stations to subsidized companies that have profited enormously through the free promotion provided by radio airplay," he added.
[via Reuters]
Thanks MUSCLE13!
If those stations could survive without the music their case would be real. But the fact of the matter is that the stations themselves benefit more than the artists. The FM radio industry is propt up on the back of the artists and instead of being thankful they try to convince us that the roles are reversed. That may have been in the 50's, but come-on.
If there is no need to pay the artists then don't play the artists music to make your point I say. It's like commercials - you don't have to run them, but you do for the profits. Well don't run the music and see if the artists beg forgiveness. I say not.
FM went from the promoter to the leach in the last 50 years as media evolved.
Another good example of the monopoly the broadcasters currently enjoy that needs to be broken up or set at the same standards as all other media.
Why do they constantly bring up the promotion of music and artists. Isn't that what Sat Radio and any other radio that plays artists does? Sat Radio does it better because of the fact the artist and song is always displayed on the screen, you never have to be guessing who is playing or what song it is if it's something new.
They should pay just like satellite radio .
"Foreign-owned" is such a complete non-sequitur, and bald-faced demagoguery, that it pretty much stamps the whole argument as irrelevant. Let us play music for free FOR THE U.S.A., MAN! Good grief.
I see that "small" stations pay only $5000 flat rate, and talk stations don't pay for the music they play coming in and out of breaks. I'm assuming large stations pay per song somehow. I wonder how the deal handles a small station that has a half-music, half-talk format... it'd seem more fair for them to get to negotiate a lower flat rate... I only ask because there's a station near me, WAMD in Maryland, that's a 50-watt AMer on life support but it's a little bit of a (very) local institution. I really think $5k could be the difference between the corporate muckety-mucks pulling the plug altogether or not. I guess the business world is a cruel place but I think this shows the negative effects of deals like this. C'est la vie.
Good, screw 'em. If you can't evolve to the new marketplace, you don't deserve to stay in business.
if sat rad must pay. so should terestrial.
however, Every time I start my car in the moring ... should GM get a couple dollars for their "preformance" Everytime one of my paptented Transformers or cables is used should I receive a couple dollars for their "preformance"
I certinly agree that whats good for the goose is good for the gander, however, I do not think this is good for radio as a whole.
But back to my wacky conspiricy theroy.... this was Expsed by the merger and the spotlight on Sat Rad and its royalty rates. not only that but the NAB's outlandish fight against Sat Rad brought attention to itself and the exemptions. Again I say, The merger has done what it was desiged to do... now they just need to have it denyied or have it apoved with such restrictions that they can both walk away after the deadline in March or was it April?
Jeff - You already paid GM for the ownership and use of the car, so your analogy doesn't work (I get your point, however).
NAB cannot argue that terr radio provides a "service" to artists but say that sat radio must pay. I guess their argument about a "free service" to the artists misses the entire payola problem in terr radio.
How ironic-- Rehr wants to discuss failing business models, eh?
Terrestrial radio does not provide a service to musicians, it exploits them for profit.
"America's hometown radio stations"?!?! We don't have any of those up where I live. Just a bunch of corporate owned formula stations.
Most terrestrial radio stations do no service at all to 99.9% of artists. Playlists are so badly shrunk by payola and other agreements, there are hardly any artists getting airplay. So unless you're a well-promoted act with major studio backing you're not on the radio anyway.
The Internet is the only other outlet...bands are taking it upon themselves to get heard and the Internet offers some options. All the musicians I know don't even think about the radio any more, which is a big shift in thinking. It used to be you'd do whatever you could to get on the radio and use that as a springboard for popularity. Now, it's not even in the conversation.
I know payola has been around since the early days of rock radio...but it's gotten so bad now. The same crappy songs are always on the same irritating stations at the same time of the day.
Hopefully satellite radio can get its act together, businesswise, and take advantage of terrestrial radio's "commercial sellout" stance. That stance is what got sat radio started in the first place. Never before has the opportunity for success been so well presented. I hope they don't screw it up too badly.
I used to like the radio. Now, I couldn't care less. I listen to MP3s wherever I go. But I'm willing to consider radio again.
This must bring a smile to Mel's face. TV
All right lets calm down on the large comments, The Sqeaky Wheel is very upset. You'll be censored. Goodbye Orbitcast.
Can I hire the NAB's writers? Even I can't think of that kind of alliteration.
Can you guys clarify something-
So currently, satrad and internet stations must pay for broadcasting music, but terrestrial does not?
Is this correct?
I quite tired of everyone wanting a piece of the action.
that is correct Mario
Mario, the NAB and terrestrial stations it represents pay the writers of the song a royalty, but not the artist performing it. So they already cut a royalty check for the person who writes it, but feels there is a big enough difference that they are not obligated to pay the artist who is performing it as well.
This has always amazed me, as the writers get paid for years afterwards, and if the artist writes it (which is becoming less common, obviously) then they get paid for that. But the actualy performance somehow does not deserve to be compensated.
There is a forum discussion on this topic here:
http://www.orbitcast.com/forums/showthread.php?goto=newpost&t=629
I shed a little more light on this interesting topic...
Sorry Mario, forget to mention that you are correct on internet and satellite radio. They pay both the artist AND the writer for the songs they play. I am not a big fan of this where everybody is taking a cut, but I think its extremely unfair and uncompetitive that the big dog (terrestrial) has a huge financial advantage already, and then is exempt from paying the artists. They have no more claim to "promoting" an artist than Pandora, XM, MTV, etc. It should be an equal playing field, and I think that if these new mediums of music are being charged these fees while still in their infancy trying to setup a business model and user base, then terrestrial radio, who make billions off the backs of artists should as well. For far too long they have used this promotion exemption to become very wealthy for the artists to get nothing in return.
The NAB rode the tiger on royalty rates for Internet and Satellite, and now they're going to get eaten by it. :D
The music artists, et al, are going to price themselves out of the market. Everything in life has a maximum price that people will pay. This payment is not necessarily in the form of buying a CD, but also though their charging more to have their music played on the radio, Internet, etc. What's going to happen is that groups will form to simply meet or maybe set up a library for the group where they can come in, rip the music to their MP3 player and then have it for life and listen to that format versus radio music. The artists will sell fewer copies in the end. As for the radio stations, they'll play less music or older music. As for the artists, they're screwing themselves. Radio was built up on free music and anybody who screws around with this tried and true method of introducing the public to their music is shooting themselves in the foot. As for the requested royalty rates, this sort of thing never goes down in in price, only up. As the old doctor said to his patient; "If you're bleeding you're dying. It just a matter of time."
For every dollar that the RIAA collects what percentage belongs to the artists?