Corporate radio and mainstream record labels have long enjoyed a seemingly symbiotic relationship that serves their mutual interests in the music industry–making money. Labels provide stations nationwide with the records of up-and-coming artists, and radio stations turn those artists, like Britney Spears and John Mayer, into mega-stars–or so they say. With the demise of payola in the 1960s, a record label’s only real option to get music heard was to send shipments of records to stations–free of charge–and hope they got the word out. This arrangement bred some conflict between big radio and big labels, but since radio was the dominant medium with substantial promotional value, labels just “cut their losses” on the free samples, and the thought of pay-to-play went by the wayside.

Until now.

Instead of payola, the Recording Industry Association of America (RIAA) is telling big radio to “pay up”–and things are getting ugly. The power-struggle is coming to a head as a bill called the “Performance Rights Act” makes its way through Congress. Originally introduced in 2007, the Performance Rights Act stalled. But today, it’s back with a vengeance, and seeks to close a “loophole” in the Copyright Act of 1976 that exempts radio from paying “performers” of songs for airtime-play. Corporate radio already pays royalties to the songwriter and the copyright holder (typically the label).

The push to close the loophole comes with the cry that the performers of songs aren’t getting their fair share for their work or their contribution to radio’s success, and thus they have recruited big-bad players like the RIAA to force radio to pay them. The argument goes something like this: performers claim the 16 billion in profits corporate radio claims annually is the direct result of the talent and music provided by performers that draw listener ears to the radio. (Under most bigger contracts, performers usually miss out on the copyright holder and songwriter dough already forked over.) Without the performer, they say, it’s just dead air-time. Radio counterclaims: exposure to 230 million pairs of ears every week is what makes artists what they are. That exposure leads to nearly 2 billion in annual profits in album, ticket, and merchandise sales. Performers owe their careers to radio.

So who is right?

It’s worth mentioning that other entertainment mediums–cable, Internet sites, YouTube, and satellite radio–already pay performers for playing their music. Even corporate radio stations that “stream” music onto their websites have to pay up. In addition, the United States is one of only five countries that refuses to pay performers for radio-play, joining Rwanda, Iran, North Korea, and China. Not exactly cozy company. That also means that when American hits are played abroad, the performer gets nothing–why should they pay us if we won’t pay them?

The sad reality seems to be that performers may once again be dwarfed by corporate giants struggling for power–even if the likes of Billy Corgan and Sheryl Crow have been to Capitol Hill on their behalf. Conveniently, pro-royalty advocates gloss over the fact that the new royalty imposed on radio stations would actually be split between the artist, or artists, and the label itself. With a rapid decline in record sales (when was the last time you bought a CD?) due to technological advances, labels might really be seeking to line their pockets with corporate radio money. No wonder they’re fighting so hard–makes you wonder what “loophole” the Act really closes.

So what does this mean for radio?

Predictably, the National Association of Broadcasters has struck back at the RIAA, introducing its own resolution currently gaining support in Congress: The Local Radio Freedom Act. The Act, of course, does away with performance royalties that would take big bucks from radio. But so what? Radio arguably has been in a steady decline as the dominant music medium since people figured out how to download songs. MTV, file-sharing, MySpace, YouTube, satellite radio, and iTunes are slowly choking corporate radio stations, sucking savvy listeners to more user-driven outlets. This could be just another bucket of water on an already dwindling fire.

The Performance Rights Act also begs a bigger question about whether laws are adequately dealing with new technology that provides exposure to artists at a pace clearly more rapid than legislative action. The royalties system is arguably a mess, largely unenforceable in new media, and unregulated in many instances. (Even yours truly mysteriously gets an iTunes “royalty” check every week for records released eight years ago that somehow appear on the site. Don’t look a gift horse?) The fight is starting to look more like dwindling giants slugging it out for the last of what they have left than a serious legislative effort to pay the creative minds behind those great, free tunes you hear on the radio–if you ever actually tune in.

Lauren Kilgore

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Additional Links:

MusicFIRST Coalition

National Association of Broadcasters

Recording Industry Association of America

Congressional Progress of Performance Rights Act

Local Radio Freedom Act

MusicFIRST goes to FCC for help

One Response to Corporate Radio Gasps for Air as Record Labels Come for Blood

  1. SB says:

    Great post. This is a really interesting issue that will continue to make headlines.