Posted by madcityradio.com on September 29, 2008 at 06:32:02:
Radio: Pay the band
Every time you hear Aretha Franklin belt out "R-E-S-P-E-C-T" on AM or FM radio, the estate of Otis Redding, who penned the lyrics, receives a royalty payment. But Franklin gets nothing.
For nearly a century, over-the-air broadcasters have benefited from an exemption in copyright law that allows them to play music without paying the people who performed the music. Songwriters get paid, but performers don't.
That seems unfair. Internet, satellite and cable radio outlets pay performers for their work. It's time traditional radio stations did as well. The Performance Rights Act, introduced last year by Rep. Howard Berman (D-Calif.), would lift the exemption. It should become law.
Music stations are fighting this. Broadcasters say that forcing them to pay a performance royalty would put a lot of stations out of business or push them to give up a music format. That, they say, would hurt the performers this legislation is designed to help.
Radio airplay drives $1.5 billion to $2.4 billion in annual music sales, according to a study commissioned by the National Association of Broadcasters.
So, yes, radio does promote artists. But why should providing a promotional benefit shield broadcasters from paying for the product they use? Major League Baseball enjoys promotional benefits from having its games broadcast on radio and TV. The broadcasts pique fan interest in going to games and buying team-related products. Yet local stations pay millions of dollars a year for the right to broadcast games.
Under the legislation proposed by Berman, small broadcasters—those with less than $1.25 million a year in revenue—would pay a flat annual royalty of $5,000. Non-commercial and public radio stations would pay no more than $1,000. Talk radio stations that play little music would pay nothing. Stations that air religious services also would be exempt.
The royalty rate for large commercial music stations would be set by a panel of federal judges known as the Copyright Royalty Board. Broadcasters and musicians would present their arguments to the royalty board. The promotional value of radio play could factor into the rate that is set.
Yes, that makes it likely music stations would face higher costs. That might compel some stations to move to an all-talk format, reducing the outlets for musicians to be heard. That's the risk musicians will take by pushing for this.
But they make a strong argument that they shouldn't be prohibited by law from seeking compensation for the use of their work. Lifting the exemption also would create an even playing field for the different ways in which radio is delivered to customers. The current setup, with a royalty exemption only for traditional broadcast radio, does not.
One more way in which current law treats performers poorly: The U.S. is one of the few countries that exempts broadcast royalties. As a result, stations in many foreign countries don't pay royalties to American artists. That costs them a lot of money—American artists often make up more than 50 percent of the programming at foreign stations.
The Performance Rights Act would get musicians some R-E-S-P-E-C-T. But more than that, it would let them get paid for their work. It makes sense.
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