Music and Radio - Friends at War

The music business continues in the doldrums as broadcast radio repeats its slide in listenership and revenue. One would think that two businesses whose relationship has been symbiotic for over 70 years would be all over one another to boost collective growth. Well, think again. First, the labels are becoming irrelevant. They’ve become terrific at marketing while totally looking past the content. In fact, today, most successes out there are due to great marketing rather than great – or even good – music…and there’s a public out there that’s tired of it. It cuts across all demos as listeners change their listening patterns to include more classics and fewer currents. A quick scan of most of today’s releases demonstrates the lack of writing and performing talent making their respective ways to the listener. So while the labels are busy marketing, they’re also busy screaming, “Pirate! Pirate!” instead of finding real talent. Younger demos are more sophisticated – or less easily fooled. Either way, most won’t pay for a CD with one good cut. And in the last few years, there haven’t even been many of those! Sure, go ahead and cite a couple of albums or tracks but, by and large, the music creative world is a mess. That mess “sticks” radio with short playlists and uninspiring music and the medium suffers greatly. Not even the synergies that the CBS’s and Warners of the world can bring will turn it around. You can use tracks from company labels in TV shows (subliminally or with the blatant display that CBS includes in shows like Numbers); you can offer teases or select free tracks, or parade artists in a never-ending column onto the sets of TV talk shows; you can license tracks for commercial use, hoping they’ll stoke sales. Fact is, if the content isn’t there, well, there’s not a lot of hope. At the same time, radio broadcasters, seeing revenue fall came up with the ideal solution: crank up the commercial load. That’s worked really well! Some, Clearchannel, the nation’s largest radio group owner, included, have returned to less nonprogram time. It hasn’t helped much though since the chase for listeners has shortened every station’s playlist. Instead of getting tired of commercials, listeners just become fatigued from listening to the same music over and over and over and… The combination of label and broadcaster errors is a recipe for disaster. As this problem spirals upward, another wrench was tossed into the works: the performers have stepped in, looking for more money, themselves. Again, what was a symbiotic relationship for the same 70 years is now becoming adversarial as the US House considers HR4789,1 the “Performance Rights Act.” The bill, now voted out of committee with a recommendation for passage by the full House, seeks pay for play – with performers on the receiving end. These payments would be above and beyond the ASCAP, BMI and SESAC payments. It disregards the fact that radio is the main outlet for release of new material and new artists. It forgets that radio is a nearly piracy-free medium where airplay is of full cuts rather than Amazon.com-type samples. The "Local Radio Freedom Act" recently introduced offers to defuse the issue but it won't keep a vote on the Performance Rights Act from coming to a vote. There are numerous arguments for the Performance Rights Act, “Other countries do it.” “We do all the work.” “We’re getting killed by online piracy” are among the top reasons. Nevermind that many of the other countries are, let’s say, less than capitalistic, that the broadcaster is still the main outlet for sampling of new music, and that it isn’t the broadcast music but digital originals that are copied and offered for download. The broadcasters have countered, arguing their position as a major force in music sales and ignoring the longer-term use of music on the air which may contribute little to additional disc sales. The disagreement – and the proposed bill – come at an interesting time. It’s not music tastes that make it so. It’s the technology. Forget peer-to-peer or other file sharing, neither are part of the scenario. The technology is “tagging” and Clearchannel is its biggest proponent…and it may well set the entire licensing structure on its ear. This technique is more than a new wind in technology. It may well become a tornado. Simplified, tagging allows radio listeners to mark or “tag” a particular song as they listen then receive it directly to an iPod – for a fee. Imagine – direct accountability and traceability. Broadcasters, performers and the public will know immediately and exactly what music works and what doesn’t. Wellllll. The proof of the pudding will be in the tasting. And the tasting will be measured in converted tags. Think about what the concept will expose: - How good’s the content? Simple enough. The more they like the cut, the more likely they are to pay to download it. It’s a pretty even playing field. Not flat but not bad - Who’re the hot (and cold) performers - Between the performers and the broadcasters, which is the dog and which is the tail That is what will be the taste of the pudding…and for some performers it may be bitter. After all, track and performer popularity will become very clear through directly traceable sales. If you don’t measure up in sales you don’t get any more play! Now imagine the impact. Imagine how long Clearchannel – and others adopting tagging – will keep playing performers whose music doesn’t generate tagging revenue. Imagine the shortened playlists, further reduction in formats, and boring repetitiveness that could occur. Then again, think about the control that Clearchannel could seize, playing what they see fit and, therefore, guaranteeing tags and sales only for those selections. That feeds right back to the labels – those guys ostensibly responsible for finding, developing and promoting talent. With tagging, who needs the label? In fact, you can look to Clearchannel to be a label. So if it all plays out, where’s the recovery to come from? It’s not in more-of-same. It’s not in bigger promotions. It’s in getting more decent music and getting it to market. That means radio, online, films, every outlet possible. Listeners are ready and willing to pay for music they really like. They’re not as willing to pay for poor quality. If the performers can produce quality content, the relationship with broadcasters works. If not, the tug o’ war will continue. This clearly will be a test of radio’s power. If Clearchannel succeeds, you can look for a gigantic swing in control. Labels will come crawling, hoping to talk Clearchannel out of creating its own label. Performers will rethink their demands for payment as stations begin to base their play on tagging sales, reducing or eliminating play from poor performers (pun intended). In fact, the money may start flowing in the other direction. Remember, it’s not payola if you tell people you’re getting paid! (317, Communications Act of 1934). BMI and ASCAP: take note. The final outcome? Will tagging underscore the need for good content? Can tagging shift the balance of music power to radio? Well, if radio had the slightest idea of what it’s doing, it would get on the stick with HD and with the implementation of tagging. Unfortunately, it doesn’t. Clearchannel will give tagging a great run but everyone answers to the “Q” these days so if it doesn’t work in 89 days, performers may well be safe. OK, that’s hyperbole, to be sure, but probably not too far off. In the meantime, we can look forward to plenty of tracks being forced under TV action, bad matches between commercial beds and their video content, and the continuing parade of unsavory music and performers hawking their wares on talk shows. Here’s the originally introduced bill: Performance Rights Act (Introduced in House) HR 4789 IH 110th CONGRESS 1st Session H. R. 4789 To provide parity in radio performance rights under title 17, United States Code, and for other purposes. IN THE HOUSE OF REPRESENTATIVES December 18, 2007 Mr. BERMAN (for himself, Mr. ISSA, Mr. CONYERS, Mr. SHADEGG, Ms. HARMAN, and Mrs. BLACKBURN) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To provide parity in radio performance rights under title 17, United States Code, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. SHORT TITLE. This Act may be cited as the `Performance Rights Act'. SEC. 2. EQUITABLE TREATMENT FOR TERRESTRIAL BROADCASTS. (a) Performance Right Applicable to Radio Transmissions Generally- Section 106(6) of title 17, United States Code, is amended to read as follows: `(6) in the case of sound recordings, to perform the copyrighted work publicly by means of an audio transmission.'. (b) Inclusion of Terrestrial Broadcasts in Existing Performance Right- Section 114(d)(1) of title 17, United States Code, is amended-- (1) in the matter preceding subparagraph (A), by striking `a digital' and inserting `an'; and (2) by striking subparagraph (A). (c) Inclusion of Terrestrial Broadcasts in Existing Statutory License System- Section 114(j)(6) of title 17, United States Code, is amended by striking `digital'. SEC. 3. SPECIAL TREATMENT FOR SMALL, NONCOMMERCIAL, EDUCATIONAL, AND RELIGIOUS STATIONS AND CERTAIN USES. (a) Small, Noncommercial, Educational, and Religious Radio Stations- (1) IN GENERAL- Section 114(f)(2) of title 17, United States Code, is amended by adding at the end the following: `(D) Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that has gross revenues in any calendar year of less than $1,250,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $5,000 per year, in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding. `(E) Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that is a public broadcasting entity as defined in section 118(f) may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $1,000 per year, in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.'. (2) PAYMENT DATE- A payment under subparagraph (D) or (E) of section 114(f)(2) of title 17, United States Code, as added by paragraph (1), shall not be due until the due date of the first royalty payments for nonsubscription broadcast transmissions that are determined, after the date of the enactment of this Act, under such section 114(f)(2) by reason of the amendment made by section 2(b)(2) of this Act. (b) Transmission of Religious Services; Incidental Uses of Music- Section 114(d)(1) of title 17, United States Code, as amended by section 2(b), is further amended by inserting the following before subparagraph (B): `(A) an eligible nonsubscription transmission of-- `(i) services at a place of worship or other religious assembly; and `(ii) an incidental use of a musical sound recording;'. SEC. 4. AVAILABILITY OF PER PROGRAM LICENSE. Section 114(f)(2)(B) of title 17, United States Code, is amended by inserting after the second sentence the following new sentence: `Such rates and terms shall include a per program license option for terrestrial broadcast stations that make limited feature uses of sound recordings.' SEC. 5. NO HARMFUL EFFECTS ON SONGWRITERS. (a) Preservation of Royalties on Underlying Works- Section 114(i) of title 17, United States Code, is amended in the second sentence by striking `It is the intent of Congress that royalties' and inserting `Royalties'. (b) Public Performance Rights and Royalties- Nothing in this Act shall adversely affect in any respect the public performance rights of or royalties payable to songwriters or copyright owners of musical works.