Don't Touch That Dial! - The Future of Broadcast Radio
House Judiciary Committee Chairman John Conyers (D – Mich.) recently introduced a bill (H.R.848) to eliminate terrestrial radio stations’ current exemption from paying royalties to performance artists. If the current bill becomes law, radio stations will have to “pay to play” on a go forward basis.
There is heated debate on both sides of this issue. Those in favor of eliminating the exemption, which has been in place for the last 80 years, cite the following:
- Although songwriters receive royalties through negotiated agreements, the artists who perform on musical recordings receive no remuneration from the radio stations. Recording artists make very little money, while radio stations generate massive amounts of income via recorded music formats. Many older artists live in poverty, lacking the basic necessities or proper health care, while radio stations continue to generate income by playing their music.
- Radio stations that play music generate income by selling advertising spots. Since artists provide product (music) which attracts listeners, creating the market for Ad revenue, they should be entitled to a share of the proceeds
- Eliminating the exemption will place terrestrial radio stations on equal footing with European radio stations, internet streaming services, satellite radio, television and the movie industry, all of whom pay royalties for use of non-original content.
Those who favor continuation of the exemption raise the following arguments:
- Radio stations already pay for content. They pay millions in royalties annually to songwriters. Forcing them to pay additional royalties to the performers will put many smaller radio stations out of business, or force them to change to a Talk Radio format.
- Stations that continue to play music will ultimately narrow their formats, which will have a negative impact on newer artists, whose music will not be played.
- Radio has been the primary exposure vehicle for many artists, helping bring their music their music to the masses, generating sales and stimulating concert attendance and merchandise sales. Many established artists who’ve signed lucrative record deals and are able to command millions annually in appearance fees owe their start to terrestrial broadcast radio.
- Poorer communities which do not have access to satellite and internet will be negatively impacted as terrestrial stations cease broadcasting, change their format or limit their play lists. Public service, community information and community outreach will be negatively impacted as well.
Some in the broadcast community feel that the music industry’s support of this legislation is nothing more than an attempt to supplement lost income due to continually declining sales, disguised as an altruistic appeal to more equitably compensate performance artists. They point out that the bill currently under consideration would give 50% of the royalties collected to the record companies, which are primarily internationally based organizations. Were the bill to pass, the US would essentially be pulling dollars out of the domestic economy and shipping them overseas. Some stations have offered to support a bill that would solely compensate the performance artists. Record companies feel they are entitled to a share of the proceeds since their initial investment in the artist makes the end product possible.
As someone who grew up on radio, I am very disappointed in today’s segmented formats and restricted playlists. However, I would feel a sense of loss if the limited options currently available were to continue to dwindle or cease to exist. Similar to television, the day is fast approaching when we will need to pay for entertainment that was previously piped into our homes, offices and automobiles free of charge.