On April 3, Bloomberg.com published an interesting article on the on-going feud between radio and the recording industry.
Music stars and hometown broadcasters are going toe-to-toe in Washington as they lobby lawmakers on legislation that would make radio stations pay royalties to music labels and performers for playing their songs. The radio industry may be hit with annual fees of $2 billion or more if the bill passes, according to David Oxenford, a broadcast-industry lawyer in Washington.
Traditional radio stations are the only broadcasting system that does not pay fees at this time. Satellite and Internet radio already pay the fees. Traditional radio only pays when they stream their broadcasts over the web.
A spokesperson for the music industry testified that radio stations pay songwriters and music publishers and leave performers with “no form of compensation at all. This issue is one of fundamental fairness.”
At this time, both music labels and radio stations are struggling with declining revenue. Listeners are using the internet and recording devices like iPods. Because of the decline of income, both sides are fighting this battle with all the resources they can muster.
The industries are spending millions to have their say in Washington. Broadcasters reported $45.5 million in expenses and campaign donations to influence Congress and federal agencies over the last two years, while the music industry doled out $30.8 million, according to the Center for Responsive Politics, a Washington-based research group. Each group outspent the trucking industry, home builders and coal-mining companies.
At this time, it seems that the music labels are winning endorsements from the committee members of the House and Senate. However, according to David Kaut, an analyst in Washington DC, “the broadcasters are still a very formidable opposition.”
A spokesperson for Commonwealth Broadcast Corp. said that radio stations will have to reduce the news programs or fire employees if forced to pay the fees. But a recording industry spokesman says the broadcasters are using scare tactics and over-inflated estimates.
Both sides are doing everything they can to influence the politicians to vote for their side. They have hired lobbyists and, although both sides have lost revenue in the last year, they are spending millions to have the vote go their way.
Traditional Radio vs. the recording industry…..neither seems to be on high moral ground at this time.
Another issue is that internet radio stations are required to pay royalties to performers. Internet broadcasters generally do not object to the principal of paying performers, but the industry is demanding much more in fees than the broadcasters are earning. Thereby pricing the internet stations out of the market and potentially closing off one facet of promotion for their artists. There has to be some balance between what is due to the performers and what the broadcasters can fairly pay.
The labels want all the power and the money. I have to wonder if they are demanding a high amount for the performers so they can get a cut of the performers fees? Seems like the people behind the industry fees ought to be thinking about what would happen when they put the broadcasters out of business for required such high fees. There would be no one left to play the music. How does this all work with payola which we all know is live and well? How the industry operates is very interesting, but not sure that I understand it all. It doesn’t seem right that the industry can either buy a career for someone they like or sabotage the career of someone they don’t like.
Since I have no love for either industry, and both act in their own best interests and leave the artist swinging in the wind, I hope they both go under. Radio used to be a means to introduce new music to the public. Now it is nothing but an advertising tool, playing the same songs over and over. Boring.
I haven’t listened to traditional radio for years. There is no variety and it is boring. They force feed the public until you are sick of the artist and song. It is all about greed/power.
It most likely wont’ happen but I’d love to see the big corporations divested from ownership of the radio stations and the stations allowed to go back to letting the DJs play what the public wants to hear. I’m tired of having the same ‘music’ force fed day after day after day.
Radio is dying because they refuse to play anything but the same formulated songs over and over again. Gone are the days when Top 40 TRULY meant the Top 40. When listeners could actually request a song and have it played. The record industry is the one who pushed this tripe and now they’re back peddling big time. I cannot feel too sorry for them. If I felt that the recording artist would get more than pennies on the dollar, I could probably support them more.
The recording industry is also changing and the major labels have been too slow, or too arrogant, to change with the times. The public buys differently now. Some of the most pushed and promoted CDs of this year have substantially fallen short on sales. 1M single downloads is not going to recoup the mega dollars spent in promotion, it probably won’t even recoup the cost of a video. Since the label recoups all promotion costs up front, it is ultimately the recording artist who suffers for the label’s lack of vision.
I don’t know the answer to any of this, but both genres need to regroup and rethink how they are running their businesses if they are going to make it in the current economic climate.
Fascinating article. Thank you.
I found it very interesting also. I rarely listen to radio because I cannot find a station that plays the music I want to hear.
Gone are the radio days when voice, lyrics and melody matter! I must admit that I only tune in
to radio during the Christmas holidays. Thanks for bringing the aticles to CANN. Very informative.
Very interesting article. I, too, confess that I never listen to the radio anymore. That is not likely to change unless they start treating Clay better and playing what I want to hear.
Musicfan, thanks so much for this article. You guys do a great job with this blog.
Thank you for a great article. I think the industry should start asking the public what they want if they want to make money again. Somewhere along the line they lost sight of the fact that the public is their customer and not the industry itself. Too many people don’t listen anymore because of the mentioned playing the same songs ad nauseaum and the fact that the stations keep playing the same songs. It’s sad when an individual’s Ipod have a greater variety of music than a station does.
That was a very interesting article. Please keep us updated on the outcome of this battle.
Thanks, glad someone wrote about this. I too don't listen to the radio, every artist and group sound iden tical. Clay was such a breath of fresh air and since I can't listen to him on the radio, I just throw in one of his cd's. Works for me.