PRA is not equitable regulation
Posted on 10. Aug, 2010 in Blog, Commentary
The global recession, the housing crisis, the collapse of Wall Street…what have our lawmakers learned from our current situation?
For one thing, as recent actions show, they have taken the stance that good business requires transparency and sound, equitable regulation.
However, the operative word here is equitable. As Rob Smith of Bacon’s Rebellion points out in an article last week:
When regulations hit some companies more severely than others, for no discernable reason, the policy inevitably causes more problems than it solves.
The Performance Rights Act, passed through committee in both the House and the Senate, is just such policy. By tinkering with the existing royalty structure that has been governing the radio broadcaster/record label relationship for decades, Congress would be forcing one industry to subsidize another, simply because that industry has been unable to maintain its profitability in the new, digital era. As Smith wisely points out:
To compel this through government action would represent a transfer of profits from one industry to another that would result in economic hardships for the broadcasting industry.
Neither the Administration nor Congress wants big business to interfere with government, but the PRA makes no bones about interfering in business. The unfortunate fact, as Smith reasons, is that “political intervention in the economy always carries with it unintended consequences.” The unintended consequences of the PRA wouldn’t be just multi-billion dollar industry players. The unintended consequence would be demise of the small, local businesses (here radio stations) that Congress should be supporting in an uncertain economic time. The PRA chooses the health of one industry over another, to the detriment of local jobs and communities.
Radio Silence in the USA?
Posted on 21. Jul, 2010 in Commentary
RBR-TVBR recently drew attention to one of the best examples we have of the lasting impacts of performance fees: In India, radio stations are going silent to save on royalty costs, turning off completely during the overnight hours.
RBR-TVBR questions the wisdom behind this decision:
The bottom line is that you really have to wonder about a policy that makes silence the better option for a broadcast station.
When radio stations go silent, the jobs go with them. This loss of jobs would be in addition to money-saving cuts at other radio stations and other economic impacts that will be felt over the long-term as a result of the performance tax.
This all underscores a greater issue – how do the radio and record industries deal with the continued repercussions of the economic recession?
Consider a recent report released by the Center for Economic and Policy Research that says the jobs hole created by the recession could persist for decades.
Write CEPR’s John Schmitt and Tessa Conroy:
Even if the economy creates jobs from now on at a pace equal to the fastest four years of the early 2000s expansion, we will not return to the December 2007 level of employment until March 2014.
As Congress continues to pass legislation aimed at creating jobs, they also debate implementing a performance fee that would destroy jobs existing employment opportunities.
Shutting down some stations completely and putting staff out of work at others are only some of the unintended side effects of the performance tax – side effects that would only serve to exacerbate the lasting impacts of the recent economic downturn.
Concern at Ohio State
Posted on 03. Jun, 2010 in Commentary
The Lantern, student newspaper at Ohio State University, addressed the likely impact the performance tax would have on local and college radio. ”Nearly 106,000 Americans are employed by radio stations. A performance tax that would likely shut down many stations and would likely ultimately result in lost jobs in an economy already struggling with unemployment.”
No sucker for spin from the record labels notorious for beating up on college students, the author finds some hypocrisy in the RIAA’s arguments.
For more than 80 years, radio and the record industry have enjoyed a mutual relationship where the stations air music free of charge in return for the free promotion of the artists, who earn money based on this exposure in the form of record sales, merchandise and live performances…
Record companies promote the belief that revenue from this tax would solely benefit the artists. However, in reality the labels themselves would receive at least 50 percent of the proceeds. This performance tax would threaten the local radio stations that have always been free to everyone, regardless of income.
SoundExchange holding more than $200 million in royalties
Posted on 01. Jun, 2010 in Commentary
The Daily Swarm points to a very interesting discrepancy in the stated purpose of SoundExchange and its actual practices. SoundExchange is charged with collecting royalties for artists and distributing them. However, they’re holding more than $200 million in unpaid royalties. While Sound Exchange can’t seem to locate artists for payment, which is their job, they seem to find plenty of time and money to lobby for the performance tax instead.
At SXSW recently, SoundExchange was trying to match $1 million in unpaid artist royalties. But the non-profit is holding an unpaid royalty account of more than $200 million, according to documents obtained by Digital Music News and information shared directly by the company. And, given the growth arcs, the amount may be quite a lot more….
The number has been skyrocketing year-over-year, highlighting the problems this organization is facing locating performing artists. At the end of 2007, the outstanding ‘fund balance’ was roughly $192.7 million, and at the end of 2006, $96.7 million, also according to the filings….
But more than $200 million sitting there, undistributed? This sounds like a monstrous number, and one that should be drawing some scrutiny. One attorney reviewing the situation noted that “any non-profit carrying more than $200 million on its books has a serious problem,” and indeed, it remains unclear if such a massive logjam can be adequately resolved and paid out.
SoundExchange is a non-profit performance rights organization that collects statutory royalties from satellite radio (such as SIRIUS XM), internet radio, cable TV music channels and similar platforms for streaming sound recordings. The Copyright Royalty Board, which is appointed by The U.S. Library of Congress, has entrusted SoundExchange as the sole entity in the United States to collect and distribute these digital performance royalties on behalf of featured recording artists, master rights owners (like record labels), and independent artists who record and own their masters.
Source: The Daily Swarm
Meet Andrew and Brian
Posted on 14. Apr, 2010 in Commentary
Andrew and Brian are independent musicians in Washington, DC that would be harmed if the performance royalty came to pass. While Congress will hear from established musicians who have benefited heavily from radio about the “merits” of the Performance Rights Act, we hope they will keep musicians such as Andrew and Brian in mind. They are just one example of the thousands of independent artists who oppose the performance fees being discussed today on Capitol Hill. (more…)
Performance tax “a blow of apocalyptic proportions”
Posted on 31. Mar, 2010 in Commentary
In a commentary published Tuesday in Dartmouth College’s student newspaper, The Dartmouth, author Divya Gunasekaran notes, “…air play has served as a free promotional opportunity for artists. Record labels may be suffering financially, but undermining radio stations to save the skins of a few major labels can hardly be called a solution.”
Not only does it alter the “symbiotic relationship between artist and radio station,” it will significantly impact college radio stations and force many to close their doors. For decades, college radio stations around the country have provided their communities with unique and varied musical entertainment while promoting new and local artists.
Without local radio broadcasters to spin their music, how many of your favorite bands and artists would have never taken off?
Source: The Dartmouth
