Rich Fiscus
23 Jun 2008 22:37
Seeing music executives with their hands in somebody else's pocket is nothing new. Still it's noteworthy when they decided to reach a little deeper, which is exactly what they're hoping to do with radio stations across the US. According to representatives of the musicFIRST coalition, which represents the RIAA and a number of songwriter groups, AM and FM broadcasters are pirates and need to pay royalties.
"It's a form of piracy, if you will, but not in the classic sense as we think of it," said Martin Machowsky, a musicFIRST spokesman. "Today we gifted them a can of herring, about their argument that they provide promotional value. We think that's a red herring. Nobody listens to the radio for the commercials."
As usual, what's really at stake is a new revenue stream. For most businesses a new revenue stream drying up means revamping the business to accomodate the new market. But in the alternate reality where the music industry exists it's all about mandatory payments. Currently the broadcasters don't pay performance royalties under the premise that they're promoting the music. In recent years that's been a sore point for music executives. With the advent of internet and satellite radio they're getting used to collecting that money for every performance.
Thanks to the hard work of the usual cast of California lawmakers it seems they're going to be getting those additional royalties, which would amount to billions of dollars annually. Bills are expected to clear the judiciary committees in both the House and Senate, after which recent history tells us it's a short journey to being signed into law.
In reality the important question isn't whether radio stations should pay, but whether they can. Like the traditional distribution channel of CDs, terrestrial radio stations aren't as popular as they once were. Radio has to deal with the increased competition from not only satellite and internet broadcasters, but also P2P music downloads.
The bottom line is every day there's less money in recorded music. What are the labels and songwriters going to do when there are no more pockets left to stick their hands into.