Senate Judiciary Committee Approves RIAA Bailout Radio Tax
from the and-so-it-goes dept
Because the federal government apparently hasn't helped the RIAA enough in the past century -- despite repeatedly changing copyright laws to favor the industry again and again and again (and again) -- the Senate Judiciary Committee has approved the Performance Rights Act, which effectively serves to tax radio stations for promoting music. It's quite obvious to anyone who actually understands radio economics that this makes no sense. After all, the history of radio has always been about payola -- having the labels pay the radio stations to play certain works. That's because the record labels know quite well that airtime leads to more money in terms of promoting an artist and building a business model around music, concert and merchandise sales. To the labels, airplay has always been the equivalent of advertising. That's why they pay for it.But now they want the radio stations to pay them to advertise the labels' music? Isn't that getting the equation backwards?
This is nothing more than a federal bailout of the RIAA, who still refuses to embrace new business models. Instead, they have to squeeze others and get the government to force them to hand over money. A real business model doesn't involve changing the law. It involves giving others a reason to buy. Apparently, that's too difficult for the RIAA.
As for the claims that a performance license will somehow help musicians, that's bogus as well. First, ask the RIAA's SoundExchange about all the money it keeps for itself and about all the musicians it "can't find." Besides, all this will do is harm up-and-coming musicians. Because radio stations will now need to pay more for playing music, they'll play less music, and if they're playing less music, they'll focus just on the big name acts. Smaller up-and-coming artists should be furious with the RIAA for giving radio stations less incentive to play their works. Remember, this is the opposite of payola. While payola got new records on the air, this will make sure fewer get on the air. But it will sure put a bunch more money in the pockets of the major record labels. So there's that.
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Filed Under: bailout, performance rights act, radio, webcasters
Companies: riaa, soundexchange
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This could backfire and create a Renaissance of lesser known local acts (relative to each station).
Or (having not read the Act itself) does this allow the RIAA to collect for ALL music played regardless of the actual affiliation of the music being played?
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"Establishes a flat annual fee in lieu of payment of royalties for individual terrestrial broadcast stations with gross revenues of less than $1.25 million and for noncommercial, public broadcast stations."
And
"(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."
These seem to indicate that you can play a flat fee and not worry about royalty rates if you are under a certain gross profit margin or a college/highschool station, as opposed to proving you aren't playing music that would require a royalty rate. So you don't have to do the work to prove you don't owe them a lot of money if you pay them a flat fee.
Sound shady to anyone?
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Re: shady
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If you're a copyright holder you can enter into a contract with the radio stations to play your song. If after good faith negotiations they're willing to pay you or if you're willing to pay them, fine. The deed is done. There's simply no need for the government to get involved. None whatsoever.
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Re: Performance Rights Act
It seems that, in general, media and pro-radio organizations are more interested in spreading propoganda (complete with fun buzzwords like "bailout") than actually understanding the issue.
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NEXT!
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A tax is when the government uses its inherent powers to force citizens and other legal entities to pay up under force of law. That's what's happening here. Whether the money goes to private schools via vouchers, to the military industrial complex, to a company building roads, or to music labels, it's still a tax.
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Perhaps a touch cynical and pessimistic but frankly I don't trust politicians to do what is best for their people anymore.
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Yeah, nearly every electronic device has a radio in it nowadays. Even the iPhone and the iPod Touch.
Why are these electronics companies allowed to rake in money while leaching off the broadcasters? It's only right that Sony, Apple, and Microsoft should pay their fair share.
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Not surprised.
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Correction...
The RIAA was originally formed for recording standards and then awarding sales levels. It appears that the RIAA got involved in copyright issues in the 1980's (exactly when is a bit fuzzy to me). I also thought the first legislation related to copyright that was influenced by the RIAA was the Audio Home Recording Act of 1992. If correct, that means the federal government has been helping the RIAA for about 17 years.
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RIAA is clearly shorthand for the overall industry.
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Of course, the "overall industry," if you are speaking of music, had nearly no concern regarding copyright until the 1960's and 1970's, so century still seems an exaggeration. Considering how many times you have called other industries on their exaggerations and distortions, seems like you would be a bit more precise.
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RIAA is pretty common shorthand for the recording industry. Most people understand it. I'm sorry you did not.
Of course, the "overall industry," if you are speaking of music, had nearly no concern regarding copyright until the 1960's and 1970's, so century still seems an exaggeration.
That's not true, actually. The 1909 Copyright Act was driven in large part by concerns of the music industry.
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RIAA is pretty common shorthand for the recording industry. Most people understand it. I'm sorry you did not.
Fundamentally, you are saying that the RIAA is the recording industry. I disagree with that. There is a vibrant recording industry that has nothing to do with the RIAA. Equating the two merely confuses people who discuss this issue only occasionally.
Of course, the "overall industry," if you are speaking of music, had nearly no concern regarding copyright until the 1960's and 1970's, so century still seems an exaggeration.
That's not true, actually. The 1909 Copyright Act was driven in large part by concerns of the music industry.
At the time of the 1909 Copyright Act, there was no "music industry" as we define it today. Were copyright holders of written music pushing to enact a different copyright act? Yes. However, it is probably more appropriate to say that the "music industry" or the "recording industry," though not the RIAA, which came late to the game, were a result of the Copyright Act of 1909 rather than the other way around.
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Radio reality shows?
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Re: Radio reality shows?
Hopefully radio stations will start to fight back against this. Perhaps they can start developing their own record labels and collect their own artists and never ever play anyone on the major record labels again.... One can hope.
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Payola existed (and still exists, I am sure) as a way for certain record companies to get certain unknown or less than popular artists increased airtime, attempting to influence the public's opinion of that artist and sell records. Effectively, there was more artists than airtime, so some companies (or individual artist reps) were trying to buy attention for what was likely an inferior product.
The problem in the long run for radio stations is that they are trying to aggregate listeners to sell advertising. If the music they play isn't the right music (not popular, not the right style, whatever), their ratings go down. Their ad rates would go down.
Now, here's the tricky part - if their ratings go down, their value as a payola target also goes down. It's the reason the pay for play market in the end doesn't work, because the negative effect on ratings drives listeners to other stations to hear what they want to hear, not what they are being told to hear (your old saw against so many things).
So radio stations don't want to be part of a payola type schemes because it is short term gain for long term pain. They value of their property is based on ratings, not short term income. A radio station free to play what it wants (according to their playlist) works to keep the public entertained and coming back and profits from that. Turning stations into a pay for play hell would drive consumers away very quickly.
Remember, broadcast, not narrowcast.
You need to work to understand the basics Mike, it would help you to understand why radio cannot become purely pay for play 24 hour a day musical infomercials.
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Music is the "FREE!" part used to sell ads,just like Mike says it should be.
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Please review history and get back to us with what you think about all the years that labels (or whatever their equivalent of the time was) DID pay to get songs on the air.
You seem to be claiming that if it happens at all, that it controls 100% of the airtime. This is flat out wrong. Each station would have it completely up to their own discretion how much they played of the payola songs and of the popular songs.
You thoughts seem to fail on several points, but please review history before replying.
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I call BS. Give me some facts to support your argument that the history of payola is solely to get crappy music on the radio. I won't be holding my breath.
"it would help you to understand why radio cannot become purely pay for play 24 hour a day musical infomercials"
You're argument is again BS. The same argument could be used against infomercials on TV. Under your argument, TV broadcasters would only play infomercials, ratings would go down, and they'd go out of business.
Yet that has not happened. Broadcasters are smart enough to balance what they air. They're smart enough to not play only crappy advertisements. If payola was legal, radio broadcasters would do the same thing.
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Interesting. So the "pay-me-now damn the future" business model only works for RIAA.
Very informative.
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Why bother..
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Re: Why bother..
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Err... This is nothing LESS than a federal bailout of the RIAA
Regarding what the people think, who cares what the people think. The government doesn't exist to serve the people, it exists to serve corporate interests at public expense.
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In 100% agreement - and this administration has been the worst by far with this 'corporate welfare/entitlement' so far - (and I thought Bush's administration was bad - sheesh)
People... make sure you remember all this and please go vote - I'm not saying vote for republicans by any means - just NOT these people. I am going to go re-register as independent this week - and that's how I'll be voting, I don't care if they say my votes are 'wasted' or not - I'm going to vote with my conscious; not with what Network news says is the best idea.
I don't think it's a dem vs. repub issue as much as it is - they both think they can get away with more now.
This 'two party' charade is getting old. It's not Dem vs. Republicans - it's "them" vs. "us" - the people.
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Rather than blaming network news, consider blaming all of your sources. It's not as simple as Mike would like you to think.
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I'm Free Capitalist, and I endorse this message.
"Don't blame me, I voted for Kotos" -- The Simpsons, 1996
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That's not true. I think VoIP services should not be subject to the same rules as PSTN and have said so. But what I did say was that *if* you connect to PSTN you should have to complete calls to the PSTN. That's it.
And there's a reason for that: which is that the PSTN is public infrastructure due to rights of way from the gov't.
That's an entirely different issue than taxing radio stations.
But if you want to treat everyone equally, then get rid of ALL performance rights taxes. I don't see any reason for any of them.
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time for a change
If that were to happen today, no amount of legislation could save the RIAA and some new, forward-thinking organization (or no organization, because it's mostly unnecessary) could step up and take its place.
The RIAA needs to start thinking of itself as a marketing group, but they market things badly now that they can't control the charts (Billboard, etc..) like they used to.
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Knew there was a reason
The RIAA gets there money no matter what because it's a fee rather than per song. No matter how many songs a radio station plays, the RIAA still gets the same amount. That of course if the RIAA changes the rules and gets a fee plus money per song.
In the end it will backfire since the musicians will get less airtime which means less money for the musicians and the RIAA.
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Poo-e
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no more radio (already banned it anyway)
Considering all the wide variety of music out there, I'm so tired of the system that plays the *same* songs over and over and over. The whole thing smacks of an old business model where it makes more sense to project and predict the sale of *one* album/song rather than trying to sell a lot of music, in general.
Now I just listen to classical music on the radio (at least that's original all the time) and last.fm at work.
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Call our Radio Stations or email them
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I smell bribes
Freedom is dead in these hands, we have to ignore the media and vote the true statesman into office. Not the empty suits on both sides that just take and take to fill themselves and the lobbyist.
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That said, in the interest of fairness it seems like a not entirely terrible idea to loosen the restrictions regardling payola, perhaps allowing it as long as it's disclosed to the listeners, as is the requirement with other forms of media.
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Things that won't work to get around the tax
1) Using non-RIAA artists. The way it works is that the collection societies are collecting in the name of ALL musicians, whether the musicians want it or not. If it is music, then you pay.
2)Radio Stations form their own labels. Again, they would have to pay the tax. Some of the money would come back to them, but you can bet that a large percentage would still disappear to the collection societies and the traditional labels.
3)Talk-radio only. Most talk radio stations do play some music. Political commentators often want to play some parody song, for example. It is hard to do a talk show about the entertainment industry without playing at least snippets. The buy-in for the program is fairly steep, and most stations will at least have to do that. Plus, if a lot of stations go talk radio, then you can bet we will see the RIAA back in Congress complaining that talk radio is stealing the airtime they are entitled to, and therefor should compensate them. Because, you know, that is piracy. And it will damage your radio. And it's for the children.
I know it technically isn't a tax because the RIAA isn't technically the government. However, it is getting to be very hard to tell where the RIAA stops and government starts, so ....
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Uhm... where are the laws dictating that it works this way?
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Pay to play is not illegal.
The above statement is completely wrong, you have no idea. It is common knowledge that radio stations have been involved in payola scandals. They were busted big time in 2005 by the Attorney General Spitzer.
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Radio Stations
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Performer's cut of the pie
The way it works (at least here) is:
- radio stations use music to fill the programme between commercials
- stations get paid for commercials
They couldn't really sell just commercials without music so they should pay for it. Do radio stations really care about music? I don't think so. Dothey promote acts? Probably, but not intentionally. It's really irrelevant what and whose music they play as long as it sells adds/commercials...
There are exceptions, of course.
k
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Hammer Makers's cut of the pie
The way it works (at least here) is:
- carpenters use hammers to build things
- carpenters get paid for building things
They couldn't really sell things without building them. Do carpenters really care about hammer makers? I don't think so. Do they promote hammers? Probably, but not intentionally. It's really irrelevant what and whose hammers they use as long as it builds things...
Therefore, carpenters should have to pay a fee to the hammer makers for each and every nail they drive.
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Re: Hammer Makers's cut of the pie
However, when hammers can cost hundreds of dollars, most carpenters feel as though they have already paid a sufficient amount to cover each and every nail they drive.
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Performance Rights Act
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Two wrongs don't make a right and three certainly don't.
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I mean seriously NAB, you couldn't see this coming from the RIAA when you lobbied for the genie to come out of that bottle?
Now you get what you deserve!!!
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Always look on the bright side ....
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RIAA takes money and make no more records, so why not stuff them into an old rotten stagecoach and push it downhill a little faster into oblivion. Otherwise they'll be high on their Cocaine Planes or in their Pimped Limos, what business do they have ruining music, themselves, technology, and what
now, the government they are now in bed with?
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