The Man Can't Tax Our Music

The music industry wants to impose an onerous new fee on broadcasters.

Jesse Walker | June 9, 2009

For decades, record companies have been begging radio stations to play their music. Sometimes they do more than beg: Few sorts of scandal reappear as reliably in the music business as a payola scandal, in which agents of the labels are caught bribing broadcasters to air their wares. In the Internet age, the AM and FM dials aren't as important to promoting music as they used to be, but they continue to play the preeminent role in the process. As Clive Davis, a dominant figure in the record industry since the '60s, told USA Today just this month, "Radio is still the leading force of determining what songs and artists break through."

Now the Recording Industry Association of America and a coalition of other industry groups are backing a bill, the Performance Rights Act, that would require those same stations to pay a new fee for the right to air those records. An industry that is infamously willing to pay for airplay apparently wants to charge for airplay too.

This isn't the small tribute the stations have long paid to songwriters. The money will go instead to the performers and copyright owners. (Those are sometimes, but not always, the same thing.) It would essentially be an extension of a fee already paid by Internet, satellite, and cable radio stations—indeed, the industry's basic argument for the measure is that it will close a "loophole" that has allowed traditional outlets to escape the payment. The musicFIRST Coalition, a lobby created two years ago to push for such a bill, has accused broadcasters opposed to the legislation of believing that "AM and FM music radio stations should continue to get special treatment, that AM and FM music radio stations do not have to play by the rules, and that AM and FM music radio stations should enjoy a competitive advantage over other music platforms."

But it's not as though this is an inexplicable inconsistency in the law. The disparity didn't exist until 1995, when Congress passed the Digital Performance Right in Sound Recordings Act at the behest of the very forces that now decry the separate-and-unequal system that bill created. W. Jonathan Cardi, an assistant professor of law at the University of Kentucky, summarized the record industry's argument for the act in a 2007 article for the Iowa Law Review:

without some ability to control the digital performance of their recordings, they would be less able to prevent infringements of their existing reproduction, distribution, and derivative work rights. The labels maintained, for example, that if online services could freely transmit recordings in any manner they pleased, such performances would facilitate the creation of infringing reproductions on users’ computer hard drives.

Set aside the question of whether those claims were accurate. For our purposes, the most important fact about the labels' argument is that it hinged on the idea that digital broadcasting is different from conventional broadcasting. Fourteen years later, as it attempts to impose a performance fee on AM and FM broadcasters as well, the industry now wants to claim the channels are equivalent after all.

This turnaround happened with astonishing speed. For practical purposes, Internet stations did not feel the effect of the 1995 law until the performance levy's levels were established for the first time in 2002. (Under the Digital Millennium Copyright Act of 1998, the levels are periodically reset.) The Web broadcasting community was consequently crippled, and several outlets were eliminated entirely. For most of the last decade, the inconsistency in the law was widely regarded as an unjust burden on Webcasters. Now it has become the nose under the tent allowing the RIAA to call for imposing the fees on everyone outside the Internet too.

And for what? Imagine, as a thought experiment, that this bill were passed and, simultaneously, payola were made fully legal. Does anyone doubt that more money would flow toward the radio stations than away? Radio remains the primary means by which the music industry promotes its product. By pushing for this fee, the labels are essentially asking their advertisers to pay them for the service of selling their stuff.

Ah, you say, but what about the independent artists who don't get big promotional pushes from the major music labels? Surely they'd benefit from a new revenue stream? Actually, they'll be even worse off. The economic mission of most commercial radio stations is to deliver audiences to the sponsors whose spots are aired between tunes. So programmers have a built-in preference for music whose mass appeal has already been proven. If you increase the cost of playing a record, that just intensifies the incentive: The more you pay to play a song, the more conservative you'll be about which songs you play. The marginal cost of playing each track is the same, but the commercial payoff is greater for established artists.

Generally speaking, the more it costs to run a station, the more risk-averse it will be. That's one reason low-power and Web outlets are more experimental: They don't have as much money on the line. But those stations—the ones that go out of their way to play diverse and unfamiliar material—are precisely the ones that have the hardest time paying the song tax. The proposed law acknowledges the problem by introducing a sliding scale, with the least profitable outfits paying $500 a year. But while that may be chump change for a big broadcaster, it's a pretty big piece of the operating budget for a low-power, volunteer-run community or student station.

Nor is it the only cost the law will impose. "The record labels are completely out of touch as to how college radio stations operate," Warren Kozireski, president of College Broadcasters Inc., recently complained on his organization's website. "The extensive record keeping requirements that will be required by the Copyright Royalty Board alone will add hundreds, if not thousands of dollars to the true cost of a performance fee." It's relatively easy to do that book-keeping if you have a narrow playlist and rarely deviate from it, as is the case with most large commercial radio stations. But if you have a library of thousands of albums and 45s, many of which were never reissued on CD, and if you allow your DJs to choose which ones they play—or even to bring in still more music from their personal collections of rare soul or jazz or bluegrass or electronica obscurities—then tracking the data suddenly becomes a full-time job.

Worse yet: Though the rhetoric around the proposal focuses on the benefits to musicians, much of the money won't make it to the artists in the first place. In part that reflects the fact that the fees go not just to the performers but to the copyright owner, which frequently means the record company. But it also reflects the corruption in the industry, which legislation like this has probably abetted.

The Web radio experience is instructive. The institution that distributes performance fees to artists is SoundExchange, an organization that spun off from the Recording Industry Association of America in 2003. In 2007, the Houston Press noted that the group was apparently unable to locate about 25 percent of the performers on whose behalf it was allegedly acting. After perusing the list of lost musicians, the Press's John Nova Lomax reported that "in less than five minutes of Googling, I found the official Web sites and/or MySpace pages of Fito Olivares, Goudie, Mark May, the Hollisters and Los Skarnales. What's more, highly visible people like Cam'ron (fresh off a highly-publicized appearance on 60 Minutes), Fat Joe and Danzig are on the 'lost' list too."

Some of these artists had indeed been contacted by SoundExchange and had merely failed to send in some necessary paperwork. But Lomax didn't believe this was true of all of them. SoundExchange, you see, faced a perverse incentive. Any money it couldn't distribute it got to keep.

At the moment, the momentum is against the legislation. Last month the House Judiciary Committee approved it by a lopsided vote of 21 to 9, but since then the civil rights community has been blasting the bill by noting the negative effect it would have on small, minority-owned stations. This has cut into the law's support among Democrats. More than half of the House has now co-sponsored an opposing measure, a nonbinding resolution dubbed the Local Radio Freedom Act, which opposes saddling stations with "any new performance fee, tax, royalty, or other charge." Whether or not that counterproposal passes, the number of legislators endorsing it certainly suggests that the Performance Rights Act is unlikely to become law this time around.

That's good news. But I'll side with the labels on one point: It is unfair that such a fee should fall on digital stations but not on their analog competitors. Justice demands that the digital performance right be eliminated entirely—for Web, satellite, and cable broadcasters as well as traditional terrestrial stations. That would allow more stations to flower. And it would give artists new opportunities to expand their income the old-fashioned way: by expanding their audiences.

Jesse Walker is Reason's managing editor and the author of Rebels on the Air: An Alternative History of Radio in America. 

Comments

|6.9.09 @ 12:11PM|#

If they do institute fees, wouldn't anyone offering a discount from the flat rate to get more airtime be engaging in payola? And if they agreed not to undercut each other, isn't it price fixing?

|6.9.09 @ 12:14PM|#

And if they agreed not to undercut each other, isn't it price fixing?

I believe in general it's not price fixing when you've gotten the government to write your price fixing into law. Nice incentive, that.

|6.9.09 @ 12:16PM|#

John Thacker,

OK, that makes sense.

Good thing Reason and Hit&Run are such blind corporatists and would never bother with running an article complaining about a corrupt business.

alan|6.9.09 @ 12:30PM|#

I hope if this passes, as a consequence of this, fewer radio stations carry the billboard top ten type pop, or really, really retro rock (there is local station with a play list so static that the last four or five times I flipped through to get to a better station, I heard 'More that a Feelin'), and Independent labels and artist wise up and declare their music royalty free, and get some serious airplay as a result. Note, I don't support this retarded legislation, but it would be awesome if the unintended consequence was the final straw to break the RIAAs' back.

Muttley|6.9.09 @ 12:31PM|#

as a rule of thumb, I wouldn't trust any scientist that publishes his research on his own website.

Muttley|6.9.09 @ 12:38PM|#

oops, wrong thread :)

Xeones|6.9.09 @ 12:49PM|#

As a rule of thumb, i wouldn't trust Muttley. Haw haw!

ed|6.9.09 @ 12:51PM|#

I hope...as a consequence...fewer radio stations carry the billboard top ten type pop...and Independent labels and artist wise up and declare their music royalty free...

That's one option. In fact, indie internet "stations" have been doing this for years. The artist waives his royalties in return for free publicity. The "station" owner pays no collection fees to anyone. It's the most pure form of "radio" around.

Casey|6.9.09 @ 1:04PM|#

SugarFree (the first comment) and Alan both make interesting potns.

As far as Jesse's reasoning (pun intended) goes:

"Much of the money won't make it to the artists in the first place. In part that reflects the fact that the fees go not just to the performers but to the copyright owner, which frequently means the record company."

The royalty goes like this: 50 percent goes to the sound copyright holder (usually the record label, but sometimes the artist). 546 percent goes to the featured performer; 5 percent is split among the supporting musicians. NONE OF THE ARTISTS SHARE GOES TO THE LABELS. This is a very important thing to understand.

It's also good to keep in mind that with the exception of North Korea and Iran (and a few unindustrialized nations) most countries on the planet pay a public performance right for the broadcast of an artists work over the terrestrial airwaves. The lack of a reciprocal right in the US leaves millions on the table for American performers, including jazz and R&B legends who didn't write their own material, but nonetheless breathed life into the compositions. (And yes, European radio does play American jazz and R&B recordings even if American commercial broadcasters do not.)

Finally, the broadcasters' claim of promotion is highly specious, regardless of the major labels' implication in payola or payola-like scandals. A recent Future of Music Coalition study shows just how risk-averse broadcasters are:
http://www.futureofmusic.org/research/playlisttrackingstudy.cfm

One particularly interesting finding is just how much of a typical commercial playlist is made up of "the hits" - in other words, not new releases, but songs that are more than a few years old. It make sense; commercial radio's goal is to program radio so that people don't change the station, so they need to balance new releases with older, more well-known fodder. Yet if you look at the songs that receive airplay by the song's release date, its surprising just how much of any given playlist is comprised of older material.

Specifically, for these 7 formats, the national airplay charts for 2008 showed that:

AC: 61% of the songs that got airplay in 2008 were released 2003 or earlier
Active Rock: 57% released 2003 or earlier
CHR/Pop: 12%
Country: 37%
Urban AC: 65%
AAA commercial: 58%
AAA noncommercial: 32%

You can see all these numbers for yourself in the appendix of the report, (starting at page 68 of the PDF):
http://www.futureofmusic.org/images/FMCplaylisttrackingstudy.pdf

One final thing to consider: can you think of another business that doesn't pay for its material input? In our era of hyper-consolidation in station ownership, commercial plays music to sell ads, not to bring joy to peoples lives. Don't you think they should maybe compensate the artists for that privilege?

casey|6.9.09 @ 1:06PM|#

Apologies -- I meant 45 percent goes to the featured performer.

Jesse Walker|6.9.09 @ 1:19PM|#

Casey: I don't understand your objection to my statement about where the money goes. Yes, the artist's share doesn't go to the labels. That's why they call it the artist's share. The copyright owner's share does frequently go to the label, as I wrote in my article and as you wrote in this thread. Where's the disagreement?

The fact that many other countries have performance-rights fees of one sort or another is a favorite talking point of the bill's supporters. (It's second only to the idea that terrestrial radio stations enjoy a "loophole.") I didn't deal with it in the piece because I doubt most people are impressed by that sort of bandwagon argument. Perhaps I should have noted that the last time the IP practices of other countries were trotted out as an argument for changing American copyright law, the result was yet another extension for Disney's copyright terms.

Finally, I certainly agree about the poor state of most radio playlists. Unfortunately, for reasons I laid out in the article, I think the new law would make mainstream stations even more conservative about what they play -- and would add a new burden, in some cases a fatal burden, on the out-of-the-mainstream stations that do more than merely play music to sell ads. In the name of battling bad radio, the bill would make American radio even worse.

New World Dan|6.9.09 @ 1:22PM|#

This is an industry I will never understand.

Firstly, I've never understood what the problem with payola is.

Furthermore, I can't see why any of this regulation is necessary. Let each copyright owner set their own terms and call it a day. While it may have been a difficult task to organize royalty payments 50 years ago, in our new glorious digital age, it's not a big deal. Ok, maybe it is for older material where it's impossible to identify the copyright holder, but that's more an issue for copyright reform.

ed|6.9.09 @ 1:38PM|#

"In the name of battling bad radio, the bill would make American radio even worse."

Maybe so, Jesse, though that scenario is hard to imagine. How could American radio get any worse? But it won't matter much, as terrestrial radio becomes less relevant daily. In this age of internet music and iPods and satellite radio and countless delivery models yet to be invented, who subjects himself to FM radio abuse? If the stations had any balls they'd go on strike, refuse to comply, change their formats. That would get the record companies' attention. But that kind of thing only happens in novels.

Jeff P|6.9.09 @ 1:43PM|#

The distributors of syndicated TV shows have upped the cost for tv stations airing these shows eight-fold since 2002, despite a cheaper ditribution model, no royalty increases for talent, and a net decrease in overall production costs due to the glut of reality and talk shows. It looks like labels are trying to replicate that cash-flow.

|6.9.09 @ 2:13PM|#

Every time I scroll past the KYR image above, I think it's a Heinz ketchup label.

Jeff P|6.9.09 @ 2:25PM|#

All part of the Teresa Heinz Kerry plot to destroy all libertarians...

|6.9.09 @ 2:45PM|#

My understanding is that every other form of brodcasting already pays these fees. Why is terrestrial radio exempt?

|6.9.09 @ 2:48PM|#

Earlier this year in the UK, a fine was imposed for a "public performance" of music. Seems the manager of an auto-repair shop kept his radio loud enough to be heard by other people, such as his employees and customers...

perilisk|6.9.09 @ 3:09PM|#

"My understanding is that every other form of brodcasting already pays these fees. Why is terrestrial radio exempt?"

RTFA

|6.9.09 @ 4:05PM|#

Hate to be the bearer of bad news, but RIAA music sucks anyway. There's a hundred thousand amiture musicians, better than those 'top-40' manufactured celebrities, who would give their right eye for a few hours of airtime.

This is the perfect opportunity to tell the RIAA where to shove it and give real musicians a chance.

|6.9.09 @ 4:33PM|#

Hate to be the bearer of bad news, but RIAA music sucks anyway. There's a hundred thousand amiture musicians, better than those 'top-40' manufactured celebrities, who would give their right eye for a few hours of airtime.

Hey, welcome to your teens! Did your mom throw a nice party for you and the other 7th graders?

So, what does the quality of "RIAA music" have to do with anything here?

RT|6.9.09 @ 5:36PM|#

Face it, playing a song on the radio is free advertising. The radio stations should make it known that if the new law is passed then all labels will have to pay the going ad rate to have their songs played. Play hardball.

Invisible Finger|6.9.09 @ 6:27PM|#

If the stations had any balls they'd go on strike, refuse to comply, change their formats.

I thought CBS changed a few FM music stations recently into simulcasts of their AM talk stations. So there's no "if" to consider.

The question is what AM radio will be used for. The FCC will probably auction off the spectrum for taxi companies.

Alan in Antarctica|6.9.09 @ 6:37PM|#

The bit about the new rules forcing stations to concentrate once again a few big names rather than allowing new talent to emerge . . . as far as the music industry, that's not a bug, it's a feature.

|6.9.09 @ 6:46PM|#

To paraphrase a good question posed by a congressman during the recent hearings over the bill: is the value of promotion derived from a station playing a song always worth more than the value of the product of the performing artist? If it is not always the case (and when it comes to playing oldies it really isn't) then establishing some kind of royalty for use only seems fair. The royalty can be adjusted based upon the potential for promotion from which a song and artist would benefit (for instance, a higher royalty would be played for older, established songs, a lower for newer song).

|6.9.09 @ 6:49PM|#

One more point:

The continued misuse of the word tax only serves to distort the discussion at hand. We are talking about a proposed royalty. A tax is a fine levied for the benefit of a government.

|6.9.09 @ 10:02PM|#

One possible result: a Tsunami of Talk stations…

(you'll need to scroll down a little...)

Walter Jameson|6.10.09 @ 1:00AM|#

"If it is not always the case (and when it comes to playing oldies it really isn't) then establishing some kind of royalty for use only seems fair."

Musicians and bands who are no longer working don't deserve compensation for something they made 40 years ago. Without the royalties, the only artists who benefit from airplay are the ones who are actively performing, touring, and selling merchandise (can benefit from the promotion).

The only way record labels are going to survive is through legislation, and they are clearly aware of that. In the past, they made money through the distribution of records - a service that was valuable to both the artists and the consumers. Now that physical records are obsolete (due to web distribution costing next to nothing), they are clinging to life through government intervention. Funny thing here: they're doing it at the expense of the radio industry, which is in a deadly decline for the same reason.

Greg|6.10.09 @ 1:01AM|#

Radio is a terrible way to promote music now, especially when radio stations don't mention the names of the songs and artists they play. I have to do a web search on a snippet of lyrics in order to figure out what song it was that I liked.

One performance on a popular TV show, however, sends people to iTunes and has an immediate impact on the charts. TV programs don't get to use music for free, despite the free advertising argument.

Jesse, what does the typical big name performer think about this isssue? Niche band? Struggling musician?

Greg|6.10.09 @ 1:06AM|#

An additional benefit to radio stations paying performer royalties: Classic rock artists who didn't write their own songs, or the non-songwriting members thereof, could retire, rather than tour the casino and state fair circuits year in and year out.

|6.10.09 @ 1:07AM|#

Jonathan's idea about different rates for different songs could (in theory) decrease the amount of old crap being played, thus allowing more new music to be showcased.

But I'm sure radio stations would find a way to retaliate, like playing all the new songs at 2 am...

Casey|6.10.09 @ 1:08AM|#

All talking points aside, Jonathan's comments are the most on point here.

Look to the future a bit: music listening is rapidly transitioning to access "plays," not physical sales (and ultimately perhaps not even downloads). In this new environment, it's important to strive for cross-platform parity, so that emerging platforms aren't automatically disadvantaged and performing artists have as many revenue streams as possibe to continue to create. Or else well just have more big-money funded, plastic crap and a sea of amateurs who never have time to develop. Are webcasting rates too high? Perhaps. Will a performance right for terrestrial radio require more hands-on negotiation and steamlined reporting standards? Probably. That doesn't mean we should just dismiss it. We should also expand and protect community radio as an alternative to the clearly failed business models of the consolidation-addicted major station groups. (Sorry, free marketeers...)

Walter Jameson|6.10.09 @ 2:21AM|#

"Or else well just have more big-money funded, plastic crap and a sea of amateurs who never have time to develop."

So is there a 'just right' revenue-formula to produce quality music? I don't think so. Money has little to do with the quality of music. Talented, driven musicians make good music, almost always just for the pleasure of the creative act in itself, and technology today makes it affordable for any songwriter or musician to make a professional quality recording and make it available to the world via internet.

Yes, it is a wonderful dream for most musicians - to live off of their own music; but, if they are unable to sell some sort of valuable commodity in the process (concert tickets, merchandise, endorsements) then they don't deserve to get payed.

Recorded music is no longer a commodity. It can be copied and distributed for almost nothing. Even pay-per-download or pay-per-play models can't compete with free file sharing.

In the end though, artists and listeners all benefit from free recorded music. The few musicians that become successful are chosen directly by consumers, as opposed to labels or Program Directors. And, any amateur musician now has a shot at success, and has that success far less dependent on the off chance of "being discovered" by a label.

Jesse Walker|6.10.09 @ 9:16AM|#

Greg: I agree that radio's current habits are not ideal for promotion, and that with other alternatives emerging its importance is fading. Nonetheless, there's a reason record companies bombard stations with free CDs. It isn't for the hope of collecting royalties each time they're played.

As far as what the typical musician thinks: A lot of big names have testified for the bill, and the musicians union has endorsed it as well. I suspect a session player with a work-for-hire contract would support it, since the promotional value means less to her than a new check would. I couldn't tell you whether the typical outsider trying to break into the business feels the same way -- I can produce anecdotes on both sides, but I haven't seen any surveys.

Casey: I'm a free-marketeer who has spent most of my career arguing for eliminating the entry barriers and other restrictions that stand in the way of community stations. Unfortunately, this law would be yet another burden on such outlets.

alant|6.10.09 @ 11:46AM|#

In case anyone is wondering what artists think of SoundExchange's payment process, check out this article by an artist that compares his SoundExchange checks with his ASCAP/SESAC/BMI payments. It ain't pretty.

Casey |6.10.09 @ 12:24PM|#

Jesse: I definitely appreciate how much time and effort you've spent thinking this through - not many people bother to do so.

Also, I really have to say that the comments here are of an entirely higher caliber than you'll find at most sites where these issues come up. Even though I'm a bit lefty-ish (and that's an "ish," mind you), my friend sends me Reason links all the time. Maybe I'll read them more closely now. ;-)

But I still disagree with you.

|6.11.09 @ 11:20AM|#

This is basic ip law. A creator of a work should be compensated. If the performer had a "right", than they could 1. give it away for free or 2. negotiate a price.

Most people believe the artist should be paid. Radio shouldn't have the ability to play their music without paying them. Its just not fair.

|6.11.09 @ 3:04PM|#

Let's see. If the broadcasting industry ran McDonald's, they'd expect CocaCola to give them the drinks free, plus a small delivery fee, because Coke would then sell so many more Cokes at Walmart and 7/11.

Tim|6.11.09 @ 6:35PM|#

Having spent 25 years spinning the hits - and many years playing in a band and spending time recording songs in a studio - I see both sides of this story.

The bill as it stands is poorly written. If the money would really go to the performers - as it should - people like Jack Ely, who sang "Louie Louie" with The Kingsmen, would actually make some money. So far, he's never made more than a couple nickels and it's sold millions and been played millions of times. Jack, the lead singer, who got booted out of the band, turned in one of rock's great performances. But he gets squat because he didn't write the song and product sales for a 45-year old recording don't amount to much (doesn't matter anyway because he's not in the band anymore).

But as a radio programmer and DJ, why the hell should I pay more money to record companies to promote their music? If anything it should be the other way around. Radio has been feeding the music industry for 50+ years...and now the industry wants to bite the hand that feeds them. Just because they can't figure out how to get a handle on digital music. And the millions of dollars they used to get from record sales are drying up.

There is inequity: currently the writer gets paid when the song is played and when it is sold. The performer gets paid when a product is sold (or when they perform). But the performer who DIDN'T write the song - but turns in a terrific performance - gets nothing from having the song play forever on the radio.

I think they need to toss everything out and start over instead of trying to keep throwing patches on a well-worn tire.

Only a Northern Song|6.11.09 @ 6:43PM|#

and when it comes to playing oldies it really isn't

And when it comes to playing new releases it really IS.

So all it is is yet another case of old fart incumbents making sure newcomers have a harder time getting their foot in the door and replacing the incumbents. New artists will have no choice but to waive their royalty to make it so that they have a chance to compete with established oldies. Or maybe even PAY to get on the air - something these muiscfirst corporations/artists (Henley, U2, Sheryl Crow, etc.) were protected by law from having to pay to get their music established on radio in the first place.

These musicfirst assholes are even claiming U2 is being boycotted by radio stations because of their stance - but all the airplay monitoring data shows this isn't the case. So these artists are just flat out lying. How corporate of them.

Can't wait for South Park to skewer that Paul Hewson cocksucker over this.

Don Henley must Die!|6.11.09 @ 6:55PM|#

Here's a thought:

What if a radio station plays the recording of Ozzy Osbourne's "Crazy Train" with the original bassist and drummer rather than the version with the re-recorded bass and drums than the new players did for a straight fee rather than on a royalty basis? Will the original rhythm section FINALLY get paid? Will anyone be able to discern the difference?

|6.11.09 @ 8:30PM|#

@ Only A Northern Song:

But the point is that if it costs stations less money to play new songs than old ones (if the adjustments end up being made this way) then the stations have more of an incentive to play newer artists.

|6.11.09 @ 8:35PM|#

Tim said: "But as a radio programmer and DJ, why the hell should I pay more money to record companies to promote their music? If anything it should be the other way around."

You should pay more money because your promotion claim is incomplete. Broadcasters promote music AND use that music to promote themselves--in addition to collecting advertising fees. Ever heard a promo on a radio station with cut up songs? That's promotion for the station.

|6.12.09 @ 11:36AM|#

In the spirit of "Those who are ignorant about history are doomed to repeat it", the music industry seems to take it for granted that the terrestrial radio industry will simply suck it up and continue providing a platform for disseminating the music industry's products.
They've forgotten that radio resorted to music for pragmatic reasons.

When popular radio shows like "The Lone Ranger", "The Guiding Light" and "The Jack Benny Show" moved from radio to television, radio industry management was presented with the dilemma about what it was going to provide as content. Music programming provided a cost-effective alternative to long-form dramatic programming.

If Congress passes the Performance Rights Act and imposes a $ 500 million tax on radio broadcasters in the current economic climate, it's not too far-fetched to believe that terrestrial radio broadcasters may decide that music programming is no longer cost-effective and abandon it altogether in favor of a cheaper alternative such as talk and opinion.

Television has been replacing expensive dramas with cheaper-to-produce reality shows. NBC is replacing an hour of drama each night with Jay Leno's talk show. It's not hard to believe that radio might decide to go a similar route. That can't be good news for the music industry.

|6.12.09 @ 7:47PM|#

Buzz:

Your NBC example doesn't equate with the scenario you posed with music programming being abandoned. NBC still broadcasts scripted dramas, they are just now broadcasting more reality shows. This likely could happen with radio--fewer music stations and more talk and sports.

And please, please stop using the word TAX to describe this bill. Unless you can argue why this should not be called a royalty (as a tax is actually a fine imposed by a government for the direct benefit of the government), please stop using such inflammatory and intentionally misleading language.

|6.17.09 @ 8:52AM|#

After reading all the cross-chatter, I say it's small wonder millions of people say "eff-it!" and simply go the the Pirate Bay.

I am so pissed at the labels for declaring war on their own customers, I will see those people in the darkest pit of hell before they will ever get another dime from me, even if it means giving up on artists that I like, or buying CDs from "used" CD stores or eBay.

I go out of my way, conversely, to support indie artists, as I know the money goes straight into their pockets, and not those of Sony, Warner, EMI, etc.