As I’ve written in RAIN before, in the mid-20th Century, the United States took a different approach to legislating the relationship between radio broadcasting and music copyright owners than other nations did.

The “U.S. solution“, as it developed over the course of a couple of key decades, was to issue far more AM and FM licenses per city than in other countries (leading to increased competition, which is of course bad for broadcasters’ profit margins). At the same time, on the other hand, Congress did not extend a sound recordings performance royalty to those broadcasters (which of course helps broadcasters’ profit margins a bit).

Compared to the solution used by other countries, copyright owners (A) suffer because they don’t get a royalty payment, but on the other hand (B) benefit because there is vibrant music radio market, giving lots of airplay to lots of genres of music and lots of artists, which helps sell records and concert tickets and etc.

On the whole, are copyright owners better off or worse off under the U.S. solution? I’d argue better, since the American music industry has historically been the world’s largest and healthiest.

Certainly record labels have had a tough few years lately — but it’s problems largely of their own making. (They bungled the chance to monetize P2P when their lawyers shut down the original Napster; they were slow to offer legal download sales; they aren’t adjusting their pricing to take into account the changing competitive landscape; etc.)

The record industry trying to grab a billion dollars or two from another industry is perfectly understandable. (David Mamet line: “Eveyone likes money — why do you think they call it ‘money’?”)

But, to be fair, if you want to unwind part of the U.S. solution using the rationale “because that’s how they do it in other countries,” you need to unwind the compensating other parts as well..

And I don’t see any practical way, at this point, to shut down 1/3 or 1/2 of U.S. radio stations.

Comment

1. I agree with your reasoning, and I could agree with your thoughts for an indefinite period of time. But, respectfully, merely because we agree and recognize your inescapable logic, doesn’t mean that those whose power and influence are firmly established won’t succeed in obviating or denying that logic.

   I remember a political science professor saying to his class, “Politics is about who gets what, when..”

   This is not to say that new technologies and those who innovate and use those technologies will not someday themselves occupy positions of influence and power. But what that professor’s words do mean, in my opinion, is that those who have and wield that influence (e.g., the RIAA) will do all they can to obtain as much money as they can in order to compensate for the ongoing diminution in CD sales.

   We can argue ad infinitum (or, is it ad nauseum? Perhaps ad nauseum is a more appropriate term.) with Mr. Simson that the broadcasting of music over all media tends to promote the sales of CD or, at a minimum, the sales of tracks, et cetera.

   But, regardless of how often we advance that worthy and accurate concept, clearly, at least according to my perception, Mr. Simson is not accepting those
   ideas. Or, even if, in fact, he privately agrees with those ideas, that gentleman represents interests that are not in the mood or frame of mind to admit the logic of such arguments.

   Even if you and I agree that the interests represented by Soundexchange and the RIAA are tending to be short-sighted, the fact remains that they are adamant about extracting from all broadcasting media as many royalties as they practicably can.

   And this is so even if, by persuading Congress to enact legislation that will extract royalties from terrestrial radio, the RIAA’s actions will thereby cause that medium to switch to other formats (e.g., talk shows and the like). This is true even if, by accomplishing its ends, it causes fewer royalties to flow to the recording industry and the artists Soundexchange represents.

   I would not blame you for calling me pessimistic. And I’m sure that sometime in future there will be reform of some of the terms of the DMCA (the Digital Millennium Copyright Act of 1998).
   However, will that reform happen soon enough to save those who broadcast on a small scale? In the meantime, I am becoming more discouraged as time goes by. I am despairing of negotiations between Internet radio and Soundexchange coming to fruition. And, even more, do I despair that Congress will enact the Internet Radio Equality Act. Obviously, members of Congress have stated that they prefer a negotiated settlement. That is all well and good. But my question is: When will those negotiations conclude?
   When will those negotiations produce a positive settlement when, after all, the CRB will be holding hearings about new royalty rates in only a few years’ time?

   Finally, how long will it take before Congress decides that not only does the IREA need to be enacted into law, but that the very terms of the DMCA need to be revisited and reformed?

   Thank you for giving me this opportunity to express myself. I greatly admire what you have done and the professional and excellent nature of your website, through which I have learned many things.

   Sincerely,
   Charles St.James

   Radio Orenovscotia

   — Charles St.James · Dec 20, 11:20 AM · #

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