Hard working artists cannot pay the rent and radio stations are to blame was the message repeated during a three-and-a-half hour House Judiciary Committee meeting Wednesday, where the deck was stacked against the radio industry.
If you weren’t paying attention to the performance royalty issue before the hearing yesterday, you certainly should be today. Despite the 230 members of Congress who’ve signed onto the NAB’s non-binding Local Radio Freedom Act resolution, the Judiciary Committee, smitten by superstars like Gloria Estefan and Dionne Warwick, are coming after radio hard, with serious legislation.
The ongoing theme yesterday was that the idea that free radio is a promotional vehicle for artists is shattered, that radio companies are making billions on the backs of artists that can no longer feed their families because of the pandemic, and that this bill protects smaller stations from paying high fees and going out of business.
Judiciary Committee members claim that under their Respecting Artists with the American Music Fairness Act, 80% of radio stations would only pay $500 per year (stations that have revenue of $1.5 million or less). Stations with less than $100,000 in revenue would pay $10 per year. It’s clear it’s iHeartMedia, Cumulus, Audacy, and radio’s other big companies are who the committee wants to go after for bigger chunks of money. How those companies pay would be determined by a panel of rate-setting judges. Of course, even though the bill states a chunk of stations will only pay $500 per year now, many in radio believe that fee will only increase over time.
If the bill becomes law the money collected would go into one pot and be distributed to artists on a per play basis by a third-party company like SoundExchange.
NAB CEO Curtis LeGeyt, radio’s lone defender Wednesday, said even that $500 fee is real money to smaller stations, and would have a real economic impact. And, LeGeyt said, these additional fees on radio will prevent them from innovating, adding that 4,000 radio stations would be touched by the core of the legislation. LeGeyt also pushed the fact that radio is free, it’s local and additional fees would have a “dramatic impact on music airplay.” LeGeyt’s attempt to bring the fees radio pays artists for streaming music back up if both sides were to start negotiationg again fell on deaf ears.
California Republican Darrell Issa was having none of what LeGeyt was saying, repeatedly talking over the NAB CEO, misrepresenting his testimony and not allowing him to answer questions. He told LeGeyt, “all of your companies can afford to pay this.”
There was some minor concern about the impact new fees would have on radio’s smaller stations but that was pretty much swept under the rug by committee members fawning over artists.
Gloria Estefan told the committee that music has value and artists, singers and studio musicians have been left out. “Hard working artists cannot pay the rent.” She said artists are fueling a billion dollar radio business without compensation and without permission to play their music.”
Estefan said she loved radio and admitted radio played a big role in the success of her career. “I’m a very big fan of radio and it’s place in music.” She said the business model has changed from the days of her hit Conga with The Miami Sound Machine and urged the committee to support the legislation.
I aint’ ever gonna play Glorias Estefanos on my station. Well, unless the labels buy me lunch and then I’ll play it. It Friday and my whole show is already voice tracked, I mean, I just announce songs and read sales liners, its easy. I’m gonna drink beer for lunch and not come back to the station, but I’ve got email. Alright, gonna go check instagram. -Tee
I’m in two small towns where I can’t get any corporate advertising because the execs at the chain stores have given little spending money for any local promotion because they have a deal with an agency that buys time on the IHearts’ of the world, who aren’t in the community at all, and don’t have a station here. How am I supposed to pay another fee, when I can’t get advertisers? Should we all just sell out to the 2 radio conglomerates?
Create better programming or get out of the business. If you can’t sell your product then your product sucks. That simple.
Well that fixes everything. How could the rest of us be so stupid?
Thanks for the excellent insight.
How can Darrell Issa be so stupid? Money is the root of all evil.
The music industry has cozied up to the government bullies because their greed is nowhere near the level of the government’s. Yes, the government would love to get its greedy hands on the “taxes” this would create. They said so during the hearing.
However, when the government creates this “tax”, payola is no longer enforceable. A tax on a service or product legitimizes a tangible asset. Taxing music for the airtime it receives makes it a “tangible asset.” Now broadcasters can charge the music labels, artists, composers, et. al. for their airtime.
No one gets to live on the broadcaster’s airwaves rent free.
You want the new release from Taylor Swift to spin 12x’s/day, here’s your rate card. You want your “no-name, wanna-be, flash-in-the-pan, one-hit-wonder” spun 6x’s/day, here is your MUCH HIGHER rate card. Small broadcasters won’t get the buys, so they’ll sell out to larger broadcasters. Larger broadcasters will dominate more stations, more airtime and therefore have more leverage to negotiate even higher rates per spin.
It all adds up to consolidation…until eventually these musicians get what they asked for, 3 radio companies, one satellite monopoly and 3 unprofitable streaming services. The music industry will keep dancing to Crowley’s piping until they realize they’re being lead by failed political trolls looking to line their pockets, at everyone else’s expense.
“Be Careful What you wish For”!! I have felt for some time that some form of this bill would eventually pass. But, I don’t think the effects have been measured.
For the smallest stations, who will get some kind of reduced rate, things will go on as usual.
But, for the IHeart’s, Audacy’s and Cumulus’s, this will be a ‘sea change’ in how music will be programmed.
“Hungry” artists who can’t get their music played now will rush to make special deals with the larger companies, spawning entirely new music formats and artists who will have “exclusive” deals with a particular radio company. Imagine a situation where Blake Shelton, for instance, would have exclusive deal with Audacy, and can only be heard on their stations.
The law of untended consequences. It’ll come back to bite you!
As long as the big consolidators continue to “bleat” about how much money they’re making, and the “cost savings” they’re getting from from the need to continually reduce staff and do NOT address the FACT that most are not getting a commercial RATE that is conducive to making the kind of money needed to do this AND support a reasonable artist payment, this will continue. I’d also like to see McRadio stand up in front of the FCC and show how only having one or two live shows a day, with everything else “dumbed down” voice tracks or just liners and music with no local voices at all is serving “public interest, convenience and necessity”. I am writing this comment after doing live inserts last night from Midnight to 4:30 am giving weather and traffic information during a snow event here in Market 63. And the station I work for is the ONLY station out of 40 or so signals in the market that is doing this. At least our voice tracked shows do better breaks that DON’T start with the jock saying, “Hey, did you hear about what THIS artist is doing today?” Who the hell wants to listen to that when they’re driving in sleet, freezing rain and snow? Well radio?
Nicely said, Fred.
Radio was and is still the main stepping-stone for artists. Look at all the promo CDs and MP3’S a station receives remember all the records that we would receive from Artists and record companies that would like exposure on the RADIO. If no one hears you, NO ONE KNOWS YOU. I even remember getting an envelope with money if I would play their material. No, I did not keep it I turned it into the GM and it was filed. Does anyone remember payola? Dam if we do dam if we do not. FOR THOSE OF YOU WHO ARE NOT FAMILIAR. The term “payola” was coined by Variety in 1938 to refer to gifts, favors, or cash surreptitiously dispensed by record companies and artists to get disc jockeys to play their songs. Payola – The paying of cash or gifts in exchange for airplay=JAIL TIME AND A FINE. If an Artist is not working, it is not because of the radio playing their material it is because clubs are not booking. ON THE OTHER HAND, maybe the artist is not in demand as they hoped they would be
The Broadcast media is keeping your name out there…BUT WE CAN NOT ASK FOR PAY FROM YOU BECAUSE IT WOULD BE CALLED PAYOLA.
Thanks Denny
To focus on radio, a largely struggling industry, to help musical artists “pay their rent” is absurd. They should be paying for their airtime instead of crying to Congress. Every minute of airtime costs money. So, it my opinion that they should be paying us.
There is no logical reason for the entertainment industry to be organized in its current form.
At best, playing music on the air should be a barter back system where stations play free music and artists get free promotion. THAT IS A BALANCED SYSTEM. Also, if they can’t make a living as an entertainer, they should develop another skill and go to work every day at a job they hate, like most Americans.
I’ve had a dozen different jobs in my life and I’ve been fired from several jobs where I underperformed. I was forced by my circumstances to figure out another way to make a living.
These failing musical artists need to do the same thing. There is a big demand for all sorts of workers these days. So, in my opinion, they should pawn their guitars and sell their drums if they are failing as a musical artist. Then, they should get off their ass, pick the job they dislike the least, and go to work.
Speaking for myself, I was amazed at how little respect broadcasting and Curtis got from the Committee; even talking over his answers. It’s like we never broadcast emergency information during a hurricane or a pandemic. Or raised money for a local charity. 50% of the fee proposed by this bill would go to record labels who couldn’t find my city of license if they had a map. And we know having the CRB set our rates is risky. Their doubling our minimum streaming fees retroactively overnight showed us that.
What if we just promise not to play Gloria Estefan’s music?
Perhaps radio should do what every other active organization does. Target their congressional detractors and fight to get them UN-elected. That may actually be this fall.
Radio talks to an immense group of voters every single day. It wouldn’t be hard to subtly paint anyone in a bad light, especially considering most congresspersons likely have skeletons; real or imagined by the public.
When you’re fighting for your livelihood, all avenues unfortunately become open.
Anyone who thinks running a radio station is a free ride or pool of dollars just waiting to land in fat cat radio stations bank accounts. Has no clue the staff, time, investment, and work it takes to create and sustain a profitable radio station. Yes, I said the P-word. You assert that anyone can play music and put it out into the airwaves. Make it a profitable business model so people who live and work in America can make a living serving their local community. When you purchase a car there is one union to represent the workers not over 4.
What this ignores is that “hard working artists” receive songwriting royalties that radio pays. These artists learned a long time ago to get their names added to the songwriting credits. Elvis was one of the first. He never wrote a song, but his name is listed as co-writer on his hits. If the artists are actually “hard working,” there are ways for them to get paid. If not, they need to hire a new manager.
There are no current artists who receive radio airplay who can’t afford to pay their rent. That is total fiction. Radio airplay opens the door for commercial sponsorship for these artists that they all willingly accept. The problem is these congressmen don’t understand the system. They should do what they did with the Music Modernization Act, and tell the two sides to write a plan they both can accept. That’s the equitable way to handle it.
Ever noticed that not one of the steady parade of artists the music industry trots in front of Congress has had an actual current record deal in years. They bring former stars who would appeal to the congressional demo and who aren’t making much money for the label now. They also don’t mention that the starving artists only get half the money. When I see Luke Bryan or Post Malone up there I’ll give them some more credibility. But they’re not going to rock that boat.
That having been said, I agree with Reynolds that this is an issue we will eventually lose. So let’s get ahead of it. Let’s take the money we now pay Soundexchange, ASCAP, BMI, SESAC, GMR and any other group that wants to spring up, add a chunk extra and send one check every month and let the government divvy it up. If GMR wants more it will have to come from ASCAP and BMI. If Soundexchange wants more, it will have to take it from songwriters or on air play. One check, all music, and let them fight over it.
The extra money would be worth the stability and reduction in paperwork.
The elephant in the room, the issue that was skirted over and not addressed head on by the committee was the need to completely reform the royalty process. Not increase taxation on broadcasters or double tax them for both OTA and stream plays but to reapportion their current payouts to BMI ASCAP SESAC etc., and take part of that pie and feed it to the artists, either directly or through those organizations already collecting for the authors and record labels. But, I suspect nobody in congress wants to touch those sacred cows. So, adding a new tax for broadcasters is the easiest way out. Fairness? Not so much.
Perhaps radio should start sending these greedy artist a bill for air time along with a count of how many times their multi million dollar hit songs were played.
They can cry “we can’t pay the rent” all they want….we all know it is a load of bull $#!+.
If the record labels are grabbing a large part of the pie, then go after them as well.
These royalty payments and companies that can just form Willie nilly and start asking for money has to stop. Radio isn’t an endless money pit and we can’t allow this crap to continue if we expect the industry to survive.
Term limits need to also come along and knock out these million dollar Congress and senators that have squatted on their elected positions.
Pissed off minds wonder how many people on the panel yesterday were “paid off” and or offered “kick backs” from these “starving artist”.
There is always a rat near a block of cheese and we need many traps to catch the many rats in today’s society.
Get rid of the payola rules. We will pay a fee and those desiring to have their music played can pay for the airtime.
The largest rats are corrupt politicians and their corrupt financiers. Politicians are like diapers, they need to be changed often for the same reason.
I commented here months ago that the free ride is over for radio and many scolded me by arguing that it’s not free, pointing to performance royalty payments to BMI, ASCAP, etc and that it will never happen because the NAB is too strong. Wrong. It’s inevitable folks. The tired old ‘valuable exposure’ arguments don’t fly anymore, especially when artist’s incomes have shrunken because of Covid issues impacting live performance opportunities. The only way to avoid these coming fees is to dump music programming. Congress will no longer make an exception for terrestrial radio vs. internet and satellite delivered music. Bank on it!
Oh, that’s right. The artists were affected by Covid. Meanwhile radio and other businesses sailed along, unscathed.
Excuse me while I go print more money.