Radio May Have To Pay To Play

devjj writes "Ars Technica reports that Congress is considering two bills that will remove the exemption terrestrial radio broadcasters currently enjoy that allows them to broadcast music without compensating the artists or labels for it. In the current dispensation only songwriters get paid. The National Association of Broadcasters is furious at the RIAA, which is pushing repeal of the exemptions, and has responded by agreeing that artists need better compensation — and is asking Congress to investigate modern recording contracts. "

This could actually help a little

[elrous0]

Finally, we have someone with a little actual power fighting the RIAA. Sadly, the RIAA will probably just back down in the end. But it would be nice if the broadcasters used this case to encourage Congress to take a good hard look at the heavy-handed tactics used by the RIAA in general in recent years.

Sadly, this is a no-win case in Congress either way. With Republicans in the hands of big business and Democrats in the hands of Hollywood, the possibility of anyone looking out for the consumer is pretty much nil. Calls for reform usually only end up with even more onerous legislation [news.com].

Paying others to advertise for them?

[Anonymous Coward]

The RIAA is again shooting itself in the foot. Why should radio stations pay for the right to advertise music which essentially is what radio stations do, provide free advertising for artists.

Re:Good, maybe REAL artists will now have a chance

[vortigern00]

And here is an example of what I always tell people about myself -- that my mind is open and I can change opinions the instant I see my old one is wrong.

When I first read this article my only thought was "goodbye college radio"... but your point is so very true. This will shoot the 'AAs squarely in the foot. Radio stations can't afford to pay for music. Even ClearChannel etc won't pony up for this. This may just clear the way to get the forest of unwanted garbage music out of our face so we can see the few trees of good music that are out there!

Sorry, I'll come up with a better metaphor after my coffee...

-Vort

Re:Good, maybe REAL artists will now have a chance

[betterunixthanunix]

We should compensate artists, but there is a problem with that: when the artist starts getting big, somebody has to step in and help, and they have to get paid. The existence of a record company is understandable; what is not understandable is a record company making more money than the artist they are publishing. Of course, that can all change with the existence of the Internet, CD burners, and digital music players, since distribution does not have to cost millions of dollars anymore. Unfortunately, as with so many cases, trying to sweep away a large, established industry that makes their money from out-of-date technology ("technology" in the economic sense), is almost impossible.

With all our modern technology, though, musicians could make money with only one or two guys helping them with distribution, even worldwide distribution, and take home a much larger percentage of the profit. As long as a quiet place to record the music can be located, even someone with almost no financial backing could potentially sell a lot of music. If only there weren't people fighting such ideas...

Re:What happened to the good old days of payola...

[smchris]

No kidding. How the scales have shifted. My favorite quotes (paraphrasing from memory):

Harry Shearer eulogizing on the "genius" of the departed Sonny Bono (a promoter as well as a performer) after his skiing into a tree: "How much 'genius' does it take to meet on Monday morning to decide how to spread the payola around?"

Randi Rhodes: "Being a disk jockey, you know the _really_ cool promos -- one ones that came with the little packet of cocaine."

Re:Paying others to advertise for them?

[mea37]

It kind of looks like junior took over the "family business" and never really learned the ropes. He doesn't understand why the old man did the things the old ways, so figures now that he's in charge he doesn't have to play by those rules. Probably thinks it's brilliant business. But of course, as he makes a string of bad decisions and revenues drop, he has to find someone to blame. Couldn't be his own fault...

Ok, seriously... the radio exemption is sound marketing and worked as such for years. (Hint -- it isn't the raw quality of the music that makes Top 40 into Top 40.) Of course, I tend toward a free market view -- so if the labels don't want free advertising, maybe they shouldn't be forced to take it. Treating your advertising medium like a consumer doesn't make a lot of sense, but barring a shareholder lawsuit they shouldn't be compelled to make good business decisions.

Of course, there is an argument about equitable treatment. For decades the radio stations have built their own businesses around being the free advertiser of mainstream music. What exactly is the radio station to do if not play music to promote it? Not the labels' problem? Well, maybe, but then the labels did benefit from the radio stations' putting themselves in this position.

The bottom line is, radio play doesn't compete with a CD purchase or a download. As a consumer, I don't have control over the next song on the radio. I don't have control over when the radio plays music at all, vs. when they play other advertisements, news, other random talk, etc. That's what you get when you buy music -- the right to hear what you want when you want (current overzealous copyright interpretations notwtihstanding).

Same holds for satelite radio, and by all rights the exemption should've been extended to them. With internet radio, you could stray into a gray area, but as long as they're centrally controlled and stream their content, they should be in the same boat. The underlying technology behind the broadcast is irrelevant.

Finally...

[bkr1_2k]

Honestly, I hope this passes. If it does, it will be the end of music radio as we know it and finally the record companies will understand they've slit their own throats. Clear Channel and the like won't like the music industry cutting so heavily into their profits and they'll do whatever they can to defeat this. Two heads of the same monster fighting can't be that bad, right?

Re:Good, maybe REAL artists will now have a chance

[innerweb]

when the artist starts getting big, somebody has to step in and help, and they have to get paid.

How about when the artists start getting big, they have to pay somebody else. Then the money flows from the artist to the support (distribution, marketing, etc) and the artist gets paid if there is any left over from an employer's standpoint. This will actually help keep things much more honest, and force artists to use the system that works (for distribution) instead of the broken ones.

This arrangement would put the artists squarely in control. The only issue, is how many artists could manage doing this themselves. After all, the industry parasiting them is technical the distribution, marketing, etc portion hiring the artists. This ensure the artists are no more than store clerks in the chain.

InnerWeb

Re:Good, maybe REAL artists will now have a chance

[ByOhTek]

Yes, but not in the way you think.

They'll start charging more per-play for the top 40 stuff because they can.
That top 40 stuff will loose air time for the cheaper stuff
The cheaper stuff, with more air time, will become more popular, raising it's price to play...
rinse-repeat

Over all, I think this will ad variety to music played on the radio, as the companies are force, due to expenses, to play more obscure music.

RIAA is very shrewd.

[russotto]

This proposal does many things which are good for them

* It's a strike against attempts to relieve webcasters of RIAA payment.
* If it is enacted, the RIAA (SoundSource) ends up collecting all the royalties
* Which means they can screw non-members out, furthering their stranglehold.
* They'll still pay for radio pay, it's just that part of the payment will be an exemption
    from royalties, reducing their direct costs.
* Which will further increase the cost of non-RIAA music compared to RIAA music
* Particularly since the exempt music will still be counted in whatever formula they use to
    distribute collected royalties, thus screwing non-RIAA artists more.

Sure, lets legislate the fall of indy radio

[Steauengeglase]

None of this smells right. Initially I thought, "Awesome, this will finally get the cartel chains off of radio". After sitting on it for a while I realized that this can only lead to one outcome, the (ultimate) death of independent radio.

We automatically assume that Clear Channel will fight this to the ground and it goes without saying that they certainly won't have any positive PR on it and the only thing we will hear are grumbles about Big Government.

Instead Clear Channel will go into a licensing agreement with the RIAA because both parties will make concessions for each other. Either fines will more or less be canceled out or the RIAA will set it at an very low rate. Both parties have too much to loose if Clear Channel gets hit hard as they are a source of guaranteed advertising. Instead the only ones who end up paying will be the independent mom and pop radio stations (all 8 of them). They will (obviously) go into bankruptcy and CC will quickly sweep in to buy them at a discount.

old media dead

[fermion]

Honestly, old media is dead. This is why it matters little if the foxie nazis own the WSJ, or if every commercial radio station is owned by a few large corps. Local news can be had through, god help us, bloggers. Music can be downloaded or rented or whatever. And television, well the writers strike tells all. Back in the late 80's when the writers went on strike, everyone cared. All the shows at the time were the center of the universe for many people, and the viewers were furious. it was in the major newspapers every day. No new episodes of Moonlighting. No Bruce Willis. No Cybill Shephard. Now, there are no talks, and the biggest news is that Letterman is going to cross the picket line. People just don't depend on the old media as they used to, or if they do it Jackass type unscripted shows where we see exactly what a prostitute will do for the chance to win money.

So does it matter that radio will have to pay? Not to the listener. The reason is that old media exists to provide filler content between ads. The filler content sole purpose is to attract the consumer. So, sports are ideal as it soap operas for boys watch, and it is usually watched live. Radio is ideal because most people have radios in their car where the people are a captive audience, and radio provides a unique ability to meet local markets. Newspaper have a unique ability and infrastructure to develop, design, print, and deliver ad campaigns. The sophisticated abilities of old media just do not yet exist on the internet.

The danger with the pay to play is that will increase costs so that advertising cannot support the media. This is no danger to most consumers. If local radio commercial fails, it just means that those who want that kind radio will have to pay for satellite service. This is likely the end game that many are hoping for, as satellite radio can probably bear the payments more easily. This means that many frequencies will be be free to transmit idie content from small radio stations. Certainly no one here thinks that is a bad thing.

Re:RIAA is very shrewd.

[DrWho520]

That is if it works out for them. The NAB may have turned this strategy directly against the RIAA.
In a gutsy move, the NAB agrees. Artists do deserve better compensation, and so the NAB respectfully suggests that Congress examine the notorious world of major label contracts. Should the committee not know where to begin, NAB President David Rehr offers seven helpful suggestions.
"Over the years, how much did the various record labels benefit financially from the sales of the performer witnesses at the July 31, 2007, hearing? How does that compare to the compensation actually paid to the performers who testified on the 31st?" he asks. Or again, "What is the minimum, maximum and average dollar amount the record labels receive from a performer's recording? What is the average amount that performers earn from the sale of each CD? From each download?"
This is a collision of two vastly powerful, evil entities. But if it makes the music business become more equitable and performers actually make their own fair share, I will root for evil entity number 2 (the Radio Broadcasters.)

In-Studio Performances

[cappadocius]

This copyright [on performances] is generally held by the record company.

This is true for the radio single version of a song, but is not universally true. There will be some performances that are owned not by the record company but by the radio station. When an artist is on tour, drops by the local radio station to plug their album and performs an in-studio version of their song, that copyright can easily end up going to the radio station.

What passage of this bill might mean is that such recordings owned by the radio stations would become more important. You'd end up hearing more "exclusive tracks" and I can easily see radio stations deciding to play an artist or not based on their willingness to provide them with non-RIAA owned performances. And I can easily see radio stations in different markets setting up trade deals that would give them access to each other's in-studio performances.

At that point, I imagine the RIAA probably tries some sort of counter-shenanigans like stipulating in artists' contracts that they have to assign the copyright for all performances to their record company.

Comopensation?

[misleb]

Wait a minute. This is totally backwards. Being played on the radio is basically advertising. The record companies should be paying radio stations to get artists heard. And the bigger the hit, the more they pay to keep it playing. Or something like that.

Then again, it would suck for indie labels that might not be able to afford to pay to broadcast. And you'd end with an even smaller subset of music being played on the radio.

How about a compromise. Record labels admit that radio play is free advertising. And Radio stations continue to get revenue from advertsing.

-matthew

Re:Good, maybe REAL artists will now have a chance

[gstoddart]

Maybe I'm not understanding this correctly... but doesn't the RIAA want people to listen to these songs on the radio so they go out and buy the cd?

They want to be paid every time anyone listens to their songs, and they want to be paid for every potential set of ears. Period.

They say their revenues have been slumping (or not growing as fast as they feel it should -- I'm not really sure), so they're looking to have the rules changed to make sure they get more money from everyone all the time.

Personally, I think you're right -- the radio stations are going to balk at getting gouged even more to play the music so the record companies can sell the records. I mean, a new song getting on the charts requires radio play to be heard in the first place.

Cheers

Re:Good, maybe REAL artists will now have a chance

[vistic]

I consider myself a music lover, and I think most of the artists I like are signed to Metropolis Records [industrial-music.com]. I e-mailed them once about their RIAA affiliation and they promptly replied to inform me that they are in no way a part of the RIAA.

Avoiding the RIAA is an option, and it's one I apparently started to take even before I was aware of it.

Re:Good, maybe REAL artists will now have a chance

[sootman]

Many people regard them as total sellouts and possessive to no actual talent or creativity... they are a hit generator, which is exactly the kind of thing that they play on pop/rock radio

Someday, there will be a thread about the RIAA without all this elitist bullshit. WHAT THE FUCK IS WRONG WITH POP? I like meatloaf, bubblegum, McDonald's hamburgers, pizza, Mountain Dew, and pop music. Music is not the center of my life, nor is it the apex of the arts. It's enjoyable noise that makes my commute more pleasant. You don't like pop? Fine. The rest of the world does. Not because it's what's been forced down their throats, but because they didn't study enough to learn that they're not supposed to like it--whatever the fuck that means.

Go find a classical music snob and ask him what he thinks about the music you like. ("Radiohead? HA!") While you're at it, ask a chef what he thinks of your dinner selection, a car enthusiast what he thinks of your ride, and the unwashed masses of Slashdot about your operating environment and text editor of choice. Maybe send these folks [typepad.com] a picture of what you're wearing right now. There is no dispute concerning taste. [google.com] (And I refer to the Latin form of that phrase not because I'm a language snob but to make the point that this idea has been around for a long, long time.) And while you're out gathering all these opinions (as if they matter), I highly recommend hitting a bookstore (NOT a video store) and checking out High Fidelity. [wikipedia.org]

Note that this doesn't mean I like the RIAA's tactics, but that's unrelated to what they happen to sell. They could sell bottled water, or own baseball teams, or make operating systems and office suites--they'd behave the same way and they'd still be assholes for doing it.

Ask yourself this: pick any band you like. Imagine they get picked up by the RIAA. Does that make their music bad? Imagine they become unexpectedly, insanely popular and spawn a whole new world of music, Sprite ads, flannel-based fashion, and extreme sports. [wikipedia.org] Does that make their music bad?

If your reflex is to tell me "Nirvana really sucked, Pearl Jam and Soundagarden were the real geniuses" then you're missing my point--ignore the band I chose as an example. Just imagine any band you like in their place.

PS: I'm not picking on you in particular. I could have replied to any of a dozen posts in this thread.