Artists and labels seek royalties from radio
With CD sales tumbling, record companies and musicians are looking at a new potential pot of money: royalties from broadcast radio stations.
For years, stations have paid royalties to composers and publishers when they played their songs. But they enjoy a federal exemption when paying the performers and record labels because, they argue, the airplay sells music.
Now, the Recording Industry Assn. of America and several artists’ groups are getting ready to push Congress to repeal the exemption, a move that could generate hundreds of millions of dollars annually in new royalties.
The decision to take on the volatile performance royalty issue again highlights the rough times the music industry is facing as listeners abandon compact discs for digital downloads, often listening to music shared with friends or obtained from file-sharing sites.
“The creation of music is suffering because of declining sales,” said RIAA Chief Executive Mitch Bainwol. “We clearly have a more difficult time tolerating gaps in revenues that should be there.”
Hmmm… Could some of those gaps be a result of actions by the record companies and RIAA? Naaah! That’s crazy talk!
UPDATE: Speaking of which, the Onion (one of the finest journalistic institutions this country has ever seen) has done it’s research and produced a hard hitting piece on this:
“What’s the point of putting out a new Ja Rule or Sum 41 album if people can just call up and hear any song off the album that they want?” Frackman asked. “In some instances, these stations actually have the nerve to let the caller ‘dedicate’ his act of thievery to a friend or lover. Could you imagine a bank letting somebody rob its vaults and then allowing the thief to thank his girlfriend Tricia and the whole gang down at Bumpy’s?”
The RIAA are idiots, so what’s new?!
Sounds like a good idea. No matter how much advertising they get, the RIAA should know that in the future they won’t get more than one sale for a CD. After that, it will end up online, and everyone else will burn themselves a copy. They might still get some money from older folks who will buy at stores, and maybe some more from ITunes downloads and the like. However, most people prefer buying something for free than paying $1.
Maybe this will get some more powerful groups to revolt against them. If the big radio stations suddenly are playing Indie or Creative Commons music in protest of these new fees, mainstream music suddenly wouldn’t be mainstream, and the RIAA loses even more.
Is the Onion staffed by the re-incarnations of Casey and Nostradamus? Or is our culture in such a steep decline that parody from a few years ago is surpassed by our reality? This is hardly the first Onion story that essentially came true a few years later, and it’s starting to be a little creepy.
The whole “save internet radio” issue is over these performance royalties that broadcasters do not have to pay. All forms of broadcast have to pay song royalties which goes to the writer of the song. Until recently that was it. Performers were only paid if someone bought their album.
Then just a few years ago, they added performance royalties for new forms of broadcast media (radio and TV were exempted). Digital satellite pays about 5% to 7% of its income for performance royalties, and unless the law is changed, internet radio stations will pay 50% to 300% of its income starting July 15th. Internet radio will be shutting down if that happens.
So it is no surprise that now they are trying to go after broadcasters, many of whom are actually losing money these days themselves. I guarantee that if broadcasters have to pay per song performance fees on top of the royalty fees they already pay, that a lot more stations will be going news/sports/talk format soon.
RIAA does not understand its own industry very well. There are three reasons why CD sales are down and none of them have to do with piracy.
First, American music in general sucks these days, it is mostly the same kind of stuff they have been pushing on us the last decade or so. I’ve been listening to British Pop/Rock recently, most of which has yet to cross the atlantic.
Second, “record stores” are a dying breed. The only ones staying in business sell cheap used CDs and RIAA seems to be going after them too. The only places to buy CDs are department stores like Wal Mart, or electronics stores like Best Buy, or finding the occasional bookstore that has a CD department.
Third is the growth of MP3 players, Why buy a CD with 2 songs you like and 8 you dont when you can save money and buy those two you like on the internet?
#4 Li picked up on the Onion article’s date. Should have been part of the Update text :
The Onion – October 2, 2002 – RIAA Sues Radio Stations . . .
Problem with a post like this, no controversy, everyone agrees. So this post may be the last. Thus boring…and infuriating.
Internet radio deserved to die, since there are better solutions using similiar technology. As for radio, good luck, as most radio stations work on tiny margins.
Make Dec. 25th 2007 a CD-Free Christmas!
Pass it on.
“Or is our culture in such a steep decline that parody from a few years ago is surpassed by our reality?”
Not culture Li but business. Peak oil is here, they all know it. There’s no room for growth but business must constantly show growth. Only solution: feast on your own guts.
#8 – You jumped the shark a long time ago, but yet you continue to post these amazingly stupid comments as if you are trying to out stupid the last stupid thing you said…
It’s endearing.
Wow you guys are slow today.
This is an obvious prelude to the RIAA beginning to sue people who illegally steal music with their radios. So if you have a radio in your house or car, and have it on, you can probably expect the summons to begin arriving any day now.
I’ve been working in broadcast radio since 1977, though some has been news (not talk, NEWS) so didn’t have to always do the BMI logs semiannually. Some time ago, the engineer (who lives and works in another state because of the _current_ owners -more at end) sent me this, which sounds like the Onion:
RIAA Claims Music On Car Radios Meant Only For Original Vehicle Owner!
Trade Group Vows To Go After Passengers Who Illegally Share Soundwaves.
The Recording Industry Association of America announced today it would be expanding its crackdown on copyright infringement by suing family members, hitchhikers and carpoolers.
Lawyers for the RIAA maintain that the radio in each car was never meant to be listened to by anyone else except the original owner of the vehicle.
Therefore, any additional passengers who listen to music on the radio in another individual’s car are doing so illegally and without the express permission of the copyright holders of the respective songs that are broadcast.
RIAA attorneys were preparing to go to Federal District courts across
the country to have subpoenas issued to every car maker in America in the hopes of forcing them to disclose the names and addresses of all purchasers from the last 20 years.
“We think this is a no brainer,” said an RIAA spokesperson who declined to be identified. “These drivers have been illegally sharing music on their radios and their passengers have been getting a free ride for way too long,” he continued.
Legal representatives for the RIAA also warned that they would
especially be targeting the “big fish” like charter bus drivers and RV
owners who blatantly turn up the radio volume allowing others to hear.
In addition, RIAA lawyers said they were hoping to get a court order to
exhume the bodies of Scottish physicist James Clerk-Maxwell, who
developed the theory of electromagnetic waves and Guglielmo Marconi, who discovered and harnessed wireless radio in order to sue both corpses for unfair business practices.
/end
Now, the station is ‘up for sale’ (FCC Daily Digest 5/8, first page) and apparently is moving from an Illinois ownership to New York (state) owners, with at least one co-owner living in AZ.
I have my resume available.
J/P=?
“Not culture Li but business. Peak oil is here, they all know it. There’s no room for growth but business must constantly show growth. Only solution: feast on your own guts.”
OK, but doesn’t that just show a lack of imagination? If peak oil is here, then why not invest in a growth industry, like, I don’t know, windmills? I think that the problem is not a lack of room for growth, but rather that the old ways of buisness are being supplanted by changing events, and the principles refuse to let go of the ways they used to make money. I’m no social darwinist, but I am an economic darwinist; enterprise must adapt or die.
Just read another story noting that theft of music, via file sharing is down significantly. So how does the RIAA explain that? They are having problems giving it away. Doesn’t the RIAA understand that there is very little good music being generated. I’ve got money to spend, I just don’t like anything I hear.
Li: Here’s what I learned when I was in the business world:
Never ever change your business model.
Never speculate on the future, just make money now (this quarter), even if it’s at the expense of the future.
Expenses can be explained away, increased revenue raises the stock price now. (EG spend a million dollars to fix a 25 thousand a year revenue leak.)
Selling the product isn’t important, let alone developing it, selling the stock is.
Saying something makes it true, as long as marketing and legal have approved it. Anyone who says different is open to possible legal action.
It’s more cost effective to lobby and threaten legal action in order to raise the stock price than any other activities. So why do anything else?
We never did it. Market research and legal told us that we had to. See this pie chart? Obviously it’s right, it’s a pie chart! So we had to.
I think that’s the end of the list.
Pretty soon the market (Hubbert’s peak) will act on a number of dinosaur businesses, from newspapers to automobiles. Then watch all these rootin’ tootin’ free enterprisers howl like a spoiled 2 year old that didn’t get their pony.
Ok,
How many of you have gone to a Nusic store LATELY, and tried to find something THAT ISNT geared to the TEENY BOPPERS… ISNT the current selection that you hear on the radio ALL THE TIME…
I remember when Record stores were HUGE… NOT some 40×20 shop.
If you can find a shop with more then 1000 selections I might be tempted to go look.
As to radio…DUH! music just dont do it… And finding a radio channel I like, Old rock, classical, Instrumental, and experimental…IS HARD in this area…and most of it ISNT made in the USA, and is FREE Adverts for the group to buy something thats DECENT to listen to.
THEN try to get a decent signal..
HOW long can the RIAA HOLD music at ransom?? I know they have at LEAST 80 years of music… They have stuff that hasnt seen the light of Day, in 40 years.. Ask RCA and Dick Clark…
The Internet has grown up and is rocking the boat. So naturally they want us to move to Internet 2 where they can stop this dangerous trend of us getting what we want when we want it!
Consider. “What if Internet stocks aren’t a bubble?:
“That was in the 1960s, and Hughes passed the time watching film after film in his private screening room, a plutocrat’s privilege. With the wonder of the Internet, cable hookups, and the Time Warner-AOL film library, every Internet user can turn into a dissipated freak like Howard Hughes. That’s American democracy at work.”
http://www.atimes.com/media/BA27Ce01.html
#11 – Nothing incorrect with my post, but due to your inability to counter it I’m going to have to declare victory in yet another thread.
“The creation of music is suffering because of declining sales,” said RIAA Chief Executive Mitch Bainwol. “We clearly have a more difficult time tolerating gaps in revenues that should be there.”
The creation of music is suffering?????
Bainwol needs to get out more. There is great music being “created” in nearly every neighborhood in the world.
His real problem is not that it is hard to create great music, it is that the RIAA is becoming obsolete.
#17 – How many of you have gone to a Nusic store LATELY, and tried to find something THAT ISNT geared to the TEENY BOPPERS…
I do… Every week. Good music is alive and well, and there are hundreds of young bands working right now who are brilliant.
I know you guys are getting older. I’m sorry that is happening to you. I have some news. Jeff Beck or Steve Winwood or ELP or Dave Brubeck or whatever news from yesterday you like, even if its the Beatles, isn’t all that interesting or relevant.
I don’t wanna detract from the great work of the past, but even my own beloved Elvis Costello serves more as a mentor to a new generation than as a vibrant creator of new music today.
Your taste didn’t change with the times. I’m not some kid berating you fogies and your olde tyme ways… I’m 40 years old and last week I bought the latest albums from The Fratellis, Modest Mouse, and The Apples In Stereo… and I think these are all excellent albums. The Modest Mouse CD might qualify as a best of the decade CD if it manages to resonate with me in a year like it does today.
Some of the greatest music ever made is being made right now, as I type this, and no amount of longing for Jethro Tull, Styx, or Yes is gonna change the fact that great new bands are alive today.
If there is a difference between now and then it is that then, sometimes, studios would push talent and innovation as well as schlock… and today, it’s all schlock on Clear Channel owned airwaves and on the end caps at Best Buy. You gotta go indy or underground to get the good stuff.
#19 – The shark you jumped was with your leading phrase… Internet radio DESERVED to die… A statement so self evidently stupid that it doesn’t need to be countered.
The rest of your post seemed reasonable and valid, but where do you get off with “deserved.”
Internet Radio is one source of quality music (even if not at the best fidelity) that is hard to rival. Despite the promise of innovative stations on XM and Sirius, the reality is the non-mainstream music streams lack the passion and focus of some of the Internet broadcasters and podcasters who clearly are promoting better, edgier, more innovative music out of love, rather than just programing a list of “stuff that is available” in some haphazard order.
If that deserves anything, it deserves to be protected and cherished… because everyone else is trying as hard as they can to suck all the life out of music that they can and destroy its very soul, only to replace it with the unadulterated shit that spews from American Idol.
Fortunately, music is harder to kill than the RIAA must have thought.
#21, OFTLO, I do… Every week. Good music is alive and well, and there are hundreds of young bands working right now who are brilliant.
Yes. I’ve a friend who’s a studio musician and brings me way too many ideas every week. I mourn the passing of one of the largest music stores in TX, since finding a lot of new music on vinyl or CD is tough, and mp3 just won’t cut it. May the RIAA RIP. Thank goodness for quality live music from superb players, whatever genre it may be.
Check out the Creative Commons Music Collaboration Project http://ccmcp.info/project/
21, you got it…
ALL indie or net…
check out Soma FM
And I talk aboutJarre, tomita, and Stix, as well as Parsons …..
24,
CC has music??? interesting..