AfterDawn: Tech news

House committee votes 21-9 in favor of new radio royalties

Written by Rich Fiscus (Google+) @ 14 May 2009 12:13 User comments (26)

House committee votes 21-9 in favor of new radio royalties On Tuesday the Judiciary Committee in the US House of Representatives approved the Performance Rights Act for consideration by the full House. If enacted into law as currently written, it would require most terrestrial radio stations to pay royalties to the copyright holder of each recording they play.
Under the current arrangement these broadcasters only have to pay publishers' royalties. This system was put in place based on the idea that radio exposure sells music.

Just like they seem to do with any use of a recording that doesn't make them money directly, the labels have characterized this as piracy. As usual they believe the problem isn't their own business model, but rather that people simply aren't giving them enough money.

The bill is still a long way from becoming law. A companion bill was introduced in the Senate earlier this year, but hasn't made it out of committee yet.

Despite claims that radio exposure no longer drives sales, labels continue to provide music to radio stations free of charge. If they really believe what they claim shouldn't they have stopped by now?

If they do believe it and haven't stopped isn't that the sort of thing that suggest a need for new management instead of propping them up with another royalty scheme?

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26 user comments

114.5.2009 12:23

I hope this passes and Radio stops playing music. Royalties=fail.

Kill the music, save the world.

Quote:
Just like they seem to do with any use of a recording that doesn't make them money directly, the labels have characterized this as piracy.
I love this line!

214.5.2009 13:09

Same thing happened when the labels started charging MTV for music videos, guess what happened????

I guess talk radio is the future. Goodbye music!

314.5.2009 15:35

I still don;t get it radio is used as a mean of advertisement, modern radio is nothing more than that since most stations are owned by big media with the intent to spam it out and hope to gain cd sales from it.


Distribution falls into 2 categories for profit and for advertisement to gain profit.

Yes lets make it so expensive nothing is broadcasted on TV or radio that would bankrupt big media faster than anything!

414.5.2009 15:42

Honestly this is a very smart move on their part, next they should charge a licensing fee for everyone that owns a radio, then tax anyone that may be in a car/room/neighborhood close by that could possibly hear said music. Really they should just fire all the artists and have their lawyers sing and play since they seem to be the only ones in the industry not getting screwed over.

514.5.2009 17:41

The music execs need to go back to business school. Their notions of how the 21st century market works are simply archaic. And these idiot politicians are even worse. (never let politicians too close to the mass media OOPS!!! we're 100+ years too late)
This will destroy radio as we know it.
But then again it could be a start of a whole new paradigm.
Follow me people:
1 Major broadcast houses stop playing music from big RIAA studios because the royalties are killing their business
2 Small and independent publishers offer royalty free music
3 New artists begin to rule the lime light because face it RADIO SELLS MUSIC!!!
4 Major artists refuse to renew or sign new contracts with major labels because now the core of distribution lies with multiple independent distributors (who could choose to go for amalgamations thereby making their work load a little easier).
5 Major labels start to fail and crash out of the business.
6 FINALLY DEATH TO THE RIAA!!!!!!! HAHAHAH

yes i know it sounds insane like the work of a mad genius or some sort of anarchist but it's plausible

This message has been edited since its posting. Latest edit was made on 14 May 2009 @ 17:43

XXYYQQOO!!! Yeah WELCOME TO JAMROCK

614.5.2009 18:19
llongtheD
Inactive

I completely agree with all the posts. How in the hell are we supposed to find out about new music (for the most part anyway) if we don't hear it on the radio? I can't tell you how many times I've been driving to work, or where ever, heard a new song, and ended up buying the cd, or the single.
This has to be the one of the most ridiculous things I've ever heard. I wish I could believe that this would hit the industry where it hurts, but we'll probably all just end up listening to more commercials to pay for the royalties.
In the end it would take all of us just shutting our radios off, and stop purchasing new music to put an end to this greed.
On a side note, with the state of the American economy, don't these
dumb a$$ politicians have more important things to do besides line the record executives pockets?

This message has been edited since its posting. Latest edit was made on 14 May 2009 @ 18:25

If your fish seems sick, put it back in the water.

714.5.2009 18:28

Originally posted by llongtheD:
I completely agree with all the posts. How in the hell are we supposed to find out about new music (for the most part anyway) if we don't hear it on the radio? I can't tell you how many times I've been driving to work, or where ever, heard a new song, and ended up buying the cd, or the single.
This has to be the one of the most ridiculous things I've ever heard. I wish I could believe that this would hit the industry where it hurts, but we'll probably all just end up listening to more commercials to pay for the royalties.
In the end it would take all of us just shutting our radios off, and stop purchasing new music to put an end to this greed.
On a side note, with the state of the American economy, don't these
dumb a$$ politicians have more important things to do besides line the record executives pockets?

Speaking of commercials why not just have all ad agencies pay 10% of what they pay out to stations to the record industry, after all they are the ones making the money not the stations.

814.5.2009 21:50

Hmmm, Cultural Stagnation? Tell me what you think.

914.5.2009 21:58

Originally posted by cart0181:
Hmmm, Cultural Stagnation? Tell me what you think.
Cultural and new/small business stagnation.

When you allow big business absolute control over the things they merely invest in with no time limits you get a regurgitation of material and money and wealth only circulates around the top portion of industry.

Imagine if we had a 5 year limit on Copy right past that anyone could reprint and redistribute the work it would be up to the original creator or anyone with the fire of creativity to do better to gain public interest in it.

You would have more focus on making it better and offering more this would create more middle class jobs because people are working,investing in smaller operations that are fulfilling the needs of specific niches not sub'd out to the highest bidder where you have a limited pool of personal and more profit to be hidden away.....

1015.5.2009 3:20

Wow. They really don't get it, it would almost appear to be them trying to get rid of radio all together. At least commercial anyway. Not sure how this will affect Non-commercial formats.. will they still have to pay royalties..?

This is one time where people should (although being American is almost synonymous with -- lazy, at least as far as taking any sort of real political action) write their Reps in congress and let them know they are too old and ignorant to understand the digital age and therefor should quit trying to legislate it. And the fact that record companies actually get a say in what happens in congress (or any corporation AT ALL) should piss people off.

But as much as people b!tch, no one ever decides to collectively go after the problem. And people should really set their sites on the FCC as well. What the hell do we need the thought police for anyway?

1115.5.2009 9:16

Like the US auto industry, the music industry has priced themselves out of a job. If they do this, file sharing will be the only way to find out about artists. If they get what they want, and shut that down as well that will be the end of them.

GOOD RIDDANCE!

1215.5.2009 9:59

I find this interesting when you think about what the recording industry is doing to the Internet radio stations. This is EXACTLY the plan that the industry has been pushing for in court. I say even the playing field...make everyone pay royalties to broadcast regardless of medium or no one. My preference is "no one."

If the recording industry gets what they think they want (royalties from radio stations) then fvck 'em...let 'em go down in flames.

1315.5.2009 10:20

Okay, not less than 24 hours after my first post I heard on one of our classic rock stations announce they're changing to a news/talk format July 1!

1415.5.2009 12:41

Excellent,.. in a few years time "pirate" radio stations will outnumber commercial station 10 to 1, play better music without interruption & dickheads and another parasitic middle layer will be exposed for all to shun.

1515.5.2009 14:27

i have two pirate radio station's in my area that play both rock genre and hip hop/jazz genre.

i think they power up at 7PM and power down at 3AM, they've got some good music too.

1615.5.2009 15:29

Radio is going to die. The future will be XM radio and even more likely, a music download system that works like Tivo for the radio. (That's my future prediction. Watch for it)

Talk radio is going to die as well. The Dems are working hard to destroy that, too.

Soon, all media in the car will be podcasts and MP3's and we'll all get "Pirate" tickets everytime we get stopped by the cops.

"Uhh, excuse me sir, but do you have the receipt for that Oingo-Boingo song you are playing?"

1715.5.2009 18:46

This article is inaccurate. Yes, Congress is considering a bill to require radio stations to pay royalties for performance rights. However, this time the "bad guys" are not the record labels but the performers themselves.

The reason for all of this is that a long time ago it was decided that when a song was played on the radio, the songwriters would get a royalty but the actual performers would not. This is different than when a song is sold as part of a CD or down load in which case BOTH the performers and the writers get royalties.

Performers have long argued that it is unfair that writers get payed for radio play but they do not. The proposed bill would correct this imbalance by changing the situation so that when a song is played on the radio the performers would be compensated along with the writers.

Much as I dislike the record labels and their historic treatment of performers, writers and customers alike, in this case they are not even part of the picture. In fact, they probably won't even get to touch the money generated from this bill. If the bill is passed and implemented in the same way the writers' royalty payment process currently is, the royalty money will go from the radio stations to an independent third party then directly to the performers.

Yes, this bill may hurt radio stations and may cause us to be able to hear less music. The question we must all decide for ourselves is whether the current situation is fair to performers or do you believe that they should be compensated the same way the writers are.

1815.5.2009 21:22

Originally posted by psbecker:
Performers have long argued that it is unfair that writers get payed for radio play but they do not. The proposed bill would correct this imbalance by changing the situation so that when a song is played on the radio the performers would be compensated along with the writers.
thats because radio advertises songs, if I'm not mistaken the labels have an arrangement to make your band known threw advertisements upon a contract in other words the money is going to who it should be going to the labels, that was the agreement along with the buyout of your artwork for the next 100+ years.

it sounds to me like the labels are taking advantage of the situation by doubling up there fee's.

1918.5.2009 9:00

I remember something like this where the artists were going to get money for when their stuff was dispalayed in the internet. When the artist contracts were renewed they wanted their cut. The media that was collecting the money for the artists said the business modle was too complex for them to get a fixed cut of even 1%. We had a stike over that.

I can't see why there is all this concern for an artist. Should a plummer get paid everything someone uses the toilet they installed? Maybe the toilet makers ought to get a cut as well. If an artist needs money, they can always perform. 99% of the world would like to be so lucky. Perform and get money for it. Is that so terrible? Obviously, they think so if this is legit. I doubt it. It is some group that is going to collect money for the artist then keep it all because paying the artist will just be too hard to do.

Most radio stations in my neck of the woods are not doing well. The great DJs are getting laid off because the industry can't afford them any more. They are going to no DJs. The stations with no name DJs need too many adds to keep them afloat so people are not listening to them any more. How is putting radio out of business going to help anyone?

At least I have mine. I have a mp3 CD player in my car and mp3 player out of the car. I prefer mp3 CDs over mp3 player in the car.

2027.5.2009 1:48
vudoo
Inactive

Looks like Internet Radio will beat terrestrial Radio anyway. Just have your station hosted on a server outside the US. Then hopefully if the RIAA comes asking for royalties the server company will simply say F you we are not a US company so in essence the broadcast is not in the US. It should be the other way around where record labels pay the broadcaster to play their records not the other way around. Hopefully the Radio stations will start playing independent labels and prograssive Rock will come back. Rap on the Radio will be dead (yeaaaaaaa) and the world will thank Radio for making known to the public some great independent artists. I hope the labels screw themselves right out of existence.

2127.5.2009 4:08

Originally posted by llongtheD:
How in the hell are we supposed to find out about new music (for the most part anyway) if we don't hear it on the radio?

-With the internet...nothing on the radio is any good anyway.
Originally posted by psbecker:

Much as I dislike the record labels and their historic treatment of performers, writers and customers alike, in this case they are not even part of the picture. In fact, they probably won't even get to touch the money generated from this bill.

-Any time money is moved around & fees are charged, the labels will get money from it. If the royalty to broadcast a song is $5, you can bet the recording company is charging a $1 collection & processing fee.

I hope that this kills radio...the best FM stations sound like **** anyway.

I wish I could figure out a way to charge people to air my advertising!


2227.5.2009 11:29

Quote:
-Any time money is moved around & fees are charged, the labels will get money from it. If the royalty to broadcast a song is $5, you can bet the recording company is charging a $1 collection & processing fee.
In this case that is not true. Radio royalties are collected through ASCAP or BMI which are separate companies that are NOT owned or operated by the labels. To quote Wikipedia which has a nice write up on ASCAP:

Quote:
The American Society of Composers, Authors and Publishers (ASCAP) is a non-profit performance rights organization that protects its members' musical copyrights by monitoring public performances of their music, whether via a broadcast or live performance, and compensating them accordingly. ASCAP collects licensing fees from users of music created by ASCAP members, then distributes them back to its members as royalties (BMI has a similar method for its members). In effect, the arrangement is the product of a compromise: when a song is played, the user does not have to pay the copyright holder directly, nor does the music creator have to bill a radio station for use of a song.
BMI works the same way.

All a composer needs to do to get paid his royalties is to register with ASCAP or BMI and they will start watching for his material. Note that both ASCAP and BMI cover their operating costs by taking a percentage of the overall royalties that they handle. Recently, that number was about 15%.

The process works quite well and the record companies are not involved. If the performers ever get paid royalties for airplay, the proposal is to either create a similar organization to handle the royalties or expand ASCAP/BMI to manage the process.

2327.5.2009 11:52

...SO I estimated 20% and it's only 15%....and not to the label.

I still believe the labels will get something from this...it is income and they will find a way to take a piece, even if they have to start writing it into the contract before they make a star.

Of course, I am still wanting radio to die out...and the big labels with their Cristina Agulara's, Nsync's, Hanna Montana's, and other artificialy generated stars.



2427.5.2009 14:13

I would be really surprised if the labels were to get their hands on part of any performance royalties. They have been remarkably unsuccessful at getting access to the writer's royalties and they have had a long time to work on it.

I would not mourn the death of the major labels in their present form because they have been so vicious in their treatment of performers. The good news is that with all the new legal (and not so legal) distribution channels for music, one of their major reasons for existence is dying and they do not seem to know how to deal with it. (For example, one would think that the labels, not itunes or Amazon would have led the way in legal downloads, but they fought it instead of embracing to it.)

The other major role of the major labels has been as a marketing organization and historically they have been pretty good at it. They had developed a good model for breaking new acts using a combination of airplay and live performances. They essentially offered this service to the acts without charging an up-front fee. In fact they often paid unknown groups quite a bit of money up front. This allowed the groups to survive, grow and create a broader catalog of music. The goal of course for the labels was to recover that up front spending by selling lots of records.

In my mind, the big question is who will take over the marketing role if the big labels go away? A lot of groups are trying to do it on their own (put up web sights, try to get internet radio to play their music, etc.) but it is real challenge to get international exposure on your own. Even with the internet, it is extremely hard to be "discovered" by a large audience as there are so many competing outlets and other bands trying to do the same thing. Moreover, it takes some expertise, which most young groups lack, to do it right and at a large enough scale to make it work.

I have no idea how this will play out, nor do I have any strong feeling for how a band will be compensated for creating and performing their music.

2527.5.2009 16:51

if labels go away, think Bard.

2612.6.2009 9:19

The day the music died ( In the US anyway). Not being a modern music fan i think this is great news, this way we hear less garbage music and the labels STILL get no money. And not only that but they can say goodbye to all that free advertising.

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