SoundExchange CEO Michael Huppe has written an op-ed piece for Billboard magazine in which he agrees with the NAB’s recent deregulation proposal to the FCC. Huppe said he was delighted to find so much common ground with the NAB’s plan, agreeing that radio should not have to deal with such outdated rules now that the marketplace is so different. You probably see where this is headed…
Huppe wrote that he’s pleased to see “Big Radio” is now looking to adjust their rules to today’s circumstances. His point of course is that radio does not pay to play music and Huppe has been pushing to get that “outdated” rule changed as well. “The law should update its treatment of radio in light of digital platforms that, coincidentally, pay artists fair market value for their work. Broadcast radio is the only platform that can use music without paying for it — and they should no longer be eligible for this special “outdated” exemption in the digital age. Big Radio should play by the same rules.”
Huppe says radio is a financial juggernaut in the music economy and can afford to pay for the music it plays. “Nobody makes more money from recorded music than the $14 billion radio industry. Radio revenue blows away that earned by competitors like SiriusXM ($5.4 billion) and online streaming services ($6.2 billion in total). Music radio revenue has risen by nearly $40 million since 2013 and the number of music stations has increased every year for the past five years.”
Huppe wrote that radio benefits from the biggest sweetheart deal in U.S. copyright law that allows broadcasters to play every recording in the world without paying artists a dime. “As everyone knows, these tracks ‘draw the crowd,’ which allow radio stations to sell billions of dollars in advertising every year, but radio pays exactly ‘nothing’ to the creators that drive their programming. And yet, all of radio’s competitors do pay the recording artist. Making matters worse, radio’s special exemption doesn’t exist anywhere else in the developed world; it’s an injustice found only in the United States.”
Read the entire Billboard op-ed piece HERE.
It’s not our fault that the recording industry changed its method of distribution making it less profitable for artists to operate. Artists have responded by dramatically increasing the ticket prices for their performances and more aggressively merchandising. We’ll pay the artist for their time when the law allows us to charge for our time.
Good point. The record labels have responded by adding new clauses to their contracts where artists have to share tour revenues, merchandizing, and even songwriting royalties. So both the artists and the labels have replaced possible radio royalties with other money. The only group left out is Sound Exchange, which is why they’re complaining.
In other words: Load up the pistols, we still have more feet to shoot.
Yep, we’re just rolling in the dough here in market 157! I sleep on a mattress of hundred dollar bills, all at the expense of artists, whose representatives (labels and promoters), call and email me over a hundred times a week trying to get their songs aired. While we are talking deregulation, let’s start with the payola rules, so I can start charging for my air time.
The music industry often likes to say the US is the only country in the free world that doesn’t pay royalty to artists & labels. However, the US is also the only country that has federal payola laws. Those laws only apply to broadcast radio, not digital. So payola is legal for satellite and streaming. The FCC can’t eliminate payola laws under deregulation, because they’re in federal statute (US Code). That would require a repeal by Congress, and the last time they were polled, they were pretty unified in keeping payola laws.
As another newsletter noted, a number of groups supporting the NAB’s consolidation proposal are possible sellers–not buyers. Radio is a mature–and declining industry. Hence the proposals to reduce the number of owners. The advertising dollars for broadcasting are drying up.
That tunesmiths have always been paid, if they hold their rights, is only a part of the activities required to bring a recording to the radio market.
The non-participatory sectors include the arrangers, the producers, the musicians and lastly – the recording artist.
Radio’s failure and steadfast refusal to compensate these essential people involved in the process has become a gaping loophole for broadcasters. – So pervasive as to become another “normal”, the practice constitutes an ignored and therefore accepted theft of services.
A fundamental, cross platform fairness, while extremely unlikely, would be a more desirable circumstance.
One big thing Huppe ignores, for obvious reasons. It is that all the “big radio” companies, the one he mentions here, all voted to give Sound Exchange a performance royalty 8 years ago. The proposal was made by the NAB to MusicFirst. They turned it down, because it wasn’t a federally imposed law. They want a government right, and that can only be given by Congress. The small radio stations, the ones opposed to this new ownership law change, were also opposed to giving him his royalty. They threatened to quit the NAB over this deal. One station in Las Vegas already did. So he needs to remember who his friends are. He would have his royalty right now if he had accepted the deal offered in 2010. And radio currently pays Sound Exchange millions of dollars in streaming royalties for their radio stations. They are his customers. Yet he treats them with disrespect. Huppe’s problem isn’t with radio. It’s with Congress. They’re the one who won’t pass his law. But radio was ready to give him his money 8 years ago. There’s a deal to be had right now if he wasn’t so greedy.
One more thing…Huppe says “radio pays exactly ‘nothing’ to the creators that drive their programming.” That’s absolutely not true. Radio pays millions of dollars to the songwriters. They are the creators. Any artist will tell you that they would not have any music without the song. In fact, a lot of artists are also songwriters. What artists say is “It all begins with a song.” So don’t believe him when he says radio doesn’t pay creators. The folks at ASCAP say “We Create Music.” Are they wrong? Radio already pays a performance royalty, to performance royalty organizations, and it goes to the creators. Without that royalty, we would have no music. If they’re saying we don’t pay creators, then radio should sue the PROs for fraud.