It's Now Time for Radio to Pay Up!
Considering the fiasco that was the CARP proceedings, the
announcement that SoundExchange had reached an agreement
over royalty rates with large commercial webcasters is
clearly good news for an industry anxious to start
collecting on a new revenue source. I feel that this
opportunity, though, should also be taken to reexamine what
has been a persistent anomaly in the royalty regime in the
US: terrestrial radio broadcasters exemption from paying
royalties to record labels & artists.
At the time, the logic was that since radio was such an
important driver of recorded music sales, it was already
contributing to labels and artists' primary revenue model. A
requirement to pay artists & labels royalties it was argued
would be akin to biting the hand that feeds you.
Irrespective of the argument's merits at the time, they no
longer hold water in today's media marketplace. First, radio
broadcasters no longer are the sole gatekeepers to the mass
marketplace. MTV and its descendents from The Box to BET
opened an entirely new platform for labels & artists to
reach a significant segment of American households. The
popularity of reality-shows like American Idol and their
innumerable variants across the world illustrates broadcast
TV's ability to successfully expose new talent to the
masses. And who needs radio when you can pack theatres with
movies like "8 Mile" or be discovered in shows like
Broadcast radio no longer even holds a monopoly as the sole
audio platform with the growth of satellite, cable &
Internet radio that, by the way, have royalty agreements
with SoundExchange. And as terrestrial radio has
increasingly concentrated in the hands of a few that
centrally control the nation's playlists based on extensive
"market research" studies, it has become a less reliable
partner in helping the music industry break and promote new
music that would help justify more releases and sales.
From this context, the exemption is not only depriving
creators from fair compensation for the use of their works,
but tilting the market in favor of media conglomerates over
new competitors. How can this be justified when these same
new competitors are a key justification for the FCC
Chairman's position to severely relax, if not outright throw
out, existing media ownership rules?
In this period of radical market transformation and an
uncertain future for the music industry, it is time to
eliminate the largest royalty loophole of all and for radio
broadcasters to pay their fair share.
Related News from Mi2N:
» Soundexchange Reaches Agreement On Webcasting Rates And Terms, Avoids CARP