Radio Bill in Congress

http://www.detroitnews.com/story/life/2015/04/13/bill-force-radio-pay-artists-introduced/25721721/

This would exacerbate the economic issues facing radio if it becomes law. I don't think the article accurately captures the facts, but someone tell me if I'm wrong. Artists get paid a fixed fee, sometimes it could be a fraction of a cent for spins that are on the air, do they not? It may be part of their distribution agreement so they don't get it directly, but don't they get something from the publisher who the radio stations do pay?

And it will die just like it did back in the 1950s when Rock N' Roll first started to appear on the radio #HistoryRepeatsItself again

JMO......

Cheers & 73

There is one big mistake in the article. The bill would require AM & FM stations to pay the same royalty that digital services pay. Satellite radio already pays this royalty.

The royalty would not just pay artists. They would get 49% of the money. 50% would go to their label, and 1% to musicians. The bill ignores the fact that the digital royalty was created to reimburse artists and labels for money they lose from music sales. Broadcast radio is not digital, so it doesn't compete with music sales.

The other issue it ignores is the federal payola law. Broadcasters are not allowed to accept payments from record labels, and payola laws only apply to broadcasters. The royalty would be reverse payola. So labels could discount their royalty to promote airplay of certain songs. That would be considered payola. So in order for this royalty to be instituted, Congress would also have to eliminate the payola law, and they're not going to do that.

The third issue it ignores is that Congress can't agree on anything. This proposal has been brought up many times before. Even the President says he would sign it. But they can't pass the bill. Too many problems with it. So while it makes headlines every time it gets brought up, it's very unlikely to get passed. If it does, it opens a bunch of legal problems that would keep it in court for years.

So labels could discount their royalty to promote airplay of certain songs. That would be considered payola. So in order for this royalty to be instituted, Congress would also have to eliminate the payola law, ...

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Not necessarily. They could stipulate equity of payments.

... Congress can't agree on anything.

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True. Unless of course the RIAA offers "Congressional Payola" to the opponents.

wadio said:

Not necessarily. They could stipulate equity of payments.

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They could, but the bill as written does not. And the fact is that the record labels want to be able to use the royalty to manipulate airplay. They're currently doing it with the digital royalty. So I wouldn't expect such a stipulation.

wadio said:

Unless of course the RIAA offers "Congressional Payola" to the opponents.

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They've done it before, and they'll do it again. But this is one issue that most Congressmen don't want to touch.

The truth of the matter is if this STUPID radio performance rights bill becomes law, the money that the stations would pay wouldn't go to the artists, musicians, or song writers. It would go directly to the record labels, which the majority of those are based overseas. It would also force many music stations to flip to a talk radio format, consisting of mostly syndicated shows, that are based mainly out of New York, or even worse, to go dark! It would also eliminate tens of thousands of local radio jobs and may even spell the end of such popular music apps as iHeart Radio. It might pave the way for shock talkers such as Howard Stern to return to conventional radio.

IHeartRadio pays this performance royalty already because it's digital.

When this was first proposed 8 years ago, stations threatened to flip to talk. But realistically, with the collapse of talk radio ratings in the last two years, that's less realistic. What's more likely is you'll see more radio companies get into the record label business, so the money they pay in royalty stays in the company. Cumulus already has such a partnership with Big Machine. If you remember, some of the original record labels, like Victor and Columbia, were later owned by broadcasting companies like RCA/NBC and CBS. Very likely we could be heading back there again.

Still, the bottom line is that Congress isn't interested in getting in the middle of this issue. There's no upside to it. They'll milk it for all the perks they can get from both sides, all the lobbying they can enjoy, and in the end, do nothing.