| Performance Royalties
- Principle, Practice and Fairness.
The current US situation concerning radio and
performance royalties - they are not a tax whatever propaganda
put out by the National Association of Broadcasters may put
out and are already paid in most other parts of the world
- strikes us as akin a man threatening another with grenades
whilst locked into a room together.
We would suggest this is a pretty stupid thing to do and that
sums up our view of the approach currently being taken by
the two sides. The question is what other options are available.
First let's briefly consider the issue of
principle. On that basis there is in our view no argument
- if copyright is to exist at all, this is an open-and-shut
case. Royalties should apply.
But what about practice? Here the situation is also blindingly
clear to us. Each side is in a troubled business and should
the recording companies push too hard they could put stations
out of business leaving the most likely gain going to lawyers
rather than either radio or recording companies.
Whatever the two sides do, however, both will have to take
their heads out of the sand sometime and recognize that technology
has changed things for them irrevocably.
So where do we go from here to get a practicable and fair
The current legal
With US law as it stands this matter has
become an issue of clout rather than one of principle with NAB
arguing the value to recording sales of promotion on the air
and the RIAA denying this value.
We think there is a value and have already argued (RNW
Mar 2007 comment) that the best way out would be to
create different classes of copyright with different rates attaching
- thus giving the recording industry a financial incentive to
keep rates down to get extra airings over more expensive recordings:
It also would provide a situation of willing sellers and buyers
rather than the government-enforced same price for all recordings
situation that now applies for streaming and download royalties.
This would also as it happens fairly speedily give a measurement
of whether airplays have a promotional value and increase sales.
It might also mean that artists have to realise that their future
has also changed and that for many of them the most successful
route could well be heavily promoted concert tours and merchandising
on the back of recording success, whether the recordings go
out on radio, via CDs or online.
The Elephant in the Room.
All of the above, except for a move to tours and merchandising
as a much larger part of income, may of course be made
irrelevant by the elephant in the room - the ability
of people to download music from the Internet for free,
whether or not this is legal.
This may not be as big a problem for the musicians as
it is cracked up to be in view of the recent decisions
by bands as prominent as Radiohead to put music out
for download themselves and the comparative ease with
which a group can nowadays put up a fairly sophisticated
It could however be a death knell for some of the recording
companies who are not needed as much as before but we
do not see that the way out for them is to choke radio
Equally it could also be a death knell for some radio
stations, particularly if a perception that they play
only a very limited selection of music and do not give
as good a service as internet providers gains deep roots.
The way forward for radio.
Absent a change
in the one-price-fits-all royalty rules, we
think that in principle radio should pay performance
fees but we think the amounts should be comparatively
We also think that it would be sensible of radio
to be pro-active about developing local artists
- and maybe the NAB for once could take a useful
role in leading co-operative effort to do so
as the medium has the advantage of being able
to both boost local artists locally and potentially
do so nationally: How about, for example some
kind of weekly round-the-US "Best of local
artists" programme that could be networked
to give national publicity to up and coming
local artists willing to forego royalty charges
for say a year to gain the publicity and exposure?
Irrespective of royalty charges and the current
state of the recording industry, we still think
radio has a lot to bring artists but it has
to stop riding on the back of another industry
and think a little longer term - which means
not only appealing to perceived valuable demographics
but also attracting future listeners who, if
they listen to one thing whilst young, may well
tune to others later in life but are less likely
to do so at all if they have got into the habit
of ignoring the medium .
too few US radio stations seem to think that
far ahead - maybe a cost of Wall Street pressures
as opposed to being owned by people interested
in the medium?
What you think? Please