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Radio advocate: Net radio royalties 'far from a model to emulate'

Posted on: 02/11/2008

From a reply to a Buffalo News editorial: The Buffalo News editorial of Jan. 30 [RAIN coverage here], headlined “Pay royalties to musicians,” paints a very simple picture — radio stations should pay artists for playing their music. Problem is, it just isn’t that simple.

The record companies, hiding behind the artists, claim that Congress should mandate a brand new performance fee on local radio to “compensate artists,” a fee in the ballpark of hundreds of millions to billions of dollars.

The News missed this crucial point: Under the existing structure, artists and the record labels already are compensated for their work… artists and the record companies are compensated through the sale of records/ CDs, concert tickets and merchandise — sales generated largely from the promotion radio stations provide by airing the artists.

According to American Media Services, 62 percent of those surveyed first discover the music they ultimately purchase by listening to the radio. This promotion is “free air play,” because radio stations are prohibited from charging artists or labels to play music on air.

Under the proposal in Congress pushed by the labels, artists would receive less than half of the new fee while a full 50 percent would go to the labels, an industry notorious for questionable treatment of its artists. And while the labels get richer, the most vulnerable sector of radio — niche, ethnic, college and other special stations — would be hit the hardest…

This fight has played out before with satellite, cable and streaming music stations. Since Congress originally legislated the fees for these technologies in the ’90s, the fees have escalated rapidly to unaffordable levels

Far from a model to emulate, the lesson learned from the Internet streaming royalty debacle should be to repeal the fee on Internet radio.

Hurting radio actually undercuts the labels’ ability to get the artists’ music out to the public. As with Internet radio, the recording industry may be killing the proverbial goose in an attempt to steal the golden egg. Parity already exists today between record labels and local radio, and it doesn’t need fixing.

Cathy Rought represents the Free Radio Alliance, a coalition of more than 200 members that formed to oppose the performance fee.

Read the full editorial reply here.

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  1. Is it not a bit of a double standard to impose a performance royalty on Broadcast Radio, but then prohibit Radio from charging for the airtime used by the artists they play?

    This seems a bit more like legislated profits rather than the exercise of free market principles.

    David · Feb 11, 08:15 AM · #

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