Hypocrisy in Radio’s Battle Over Performance Royalties

Historically, record companies, its labels and performers have had a pretty good deal with radio. Radio gives the labels free advertising for their songs, while the labels give radio the tunes to play free of charge, excluded music licensing fees that pay composers.

A quid pro quo as they say in Latin.

Or as they say in the northern neighborhoods of Buffalo, New York, “A little somethin’ for somethin’.  You get your taste.  We get ours.  Everybody’s happy.  Now get outta here.”

U.S. Representative Marsha Blackburn, R-Tennessee doesn’t understand how to do business in an Italian neighborhood (I’m part Italian I can say that) in North Buffalo.  Earlier this month she introduced legislation that would force terrestrial radio stations to pay artist/performers and their record companies every time a song is broadcast.

Blackburn from Tennessee feels broadcasters are hypocrites!  Many broadcasters operate both radio and television stations, she reasons.  On one hand these broadcasters are forcing poor cable companies to pay television stations a fee to rebroadcast their signals, while these same companies are defending the quid pro quo they’ve been getting from record labels and complaining additional fees paid to artists and labels would be unfair.

“If the broadcasters want to collect money from cable companies for television content, which the broadcast companies have been advocating for in Congress, then they should pay performance royalties to the artists and labels,” Blackburn said.

Point taken Rep. Blackburn from Tennessee.  That’s not a good comparison, however.  Cable companies are charging subscribers a monthly fee for the 300 plus channels they don’t watch, while terrestrial radio is free.  Listeners listen at no cost (except having to hear to 10 minutes long commercial breaks, but that’s another story).

Blackburn from Tennessee says, “Satellite radio pays music creators for performances.”  Point again taken.  But, subscribers pay Sirius/XM for that service too.  So there’s no comparison.

Some argue that broadcasters are profiting from playing music and not sharing their bounty (which is derived from selling commercials) with the creators of the music and that is unfair.  Touche’.  But, when a radio station plays a song, which amounts to a commercial for that song, and a listener then buys that song, is the record company sharing their bounty with the radio station?  No.

Each year radio stations do, however, pay millions in music licensing fees to the composers of songs. You may have heard of BMI, ASCAP or SECAC.  These are organizations that collect the licensing fees, which are then paid to songwriters or composers.

Let me fill you in on a few dirty little secrets.

Not only do radio stations that play music pay these licensing fees, so do stations that are talk formats – stations that don’t play music.  Depending on the revenue a station brings in, in certain markets the radio station paying the most in licensing to BMI/ASCAP/SESAC may be an AM talk station.  That doesn’t seem fair, does it?

Here’s another dirty little secret of the music industry, especially in a place like Nashville, Tennessee, the epicenter of country music.  There are times a song artist will be listed as the composer or co-writer on a song they didn’t write.  Why?  When a song is recorded by a big star, the tune has a better chance of getting played on the radio.  The song gets that free advertising on the radio so it can be heard in hopes someone will buy the song.  To record the song, the artist demands his or her name be listed as a composer to get a cut of the music licensing fees radio stations pay.  This takes money from the true composer of the song.  That doesn’t seem fair, does it?

As for the hypocrisy, I wondered which district Congresswoman Marsha Blackburn represented in Tennessee.  It’s Tennessee’s “Fighting 7th,” a district that includes some of Nashville’s wealthiest suburbs, home to artists, performers and the managers that staff the Nashville, Tennessee offices of record companies and labels.

I did a quick Google search to see how much in “lobbying money” (bribe is such a filthy word) has been given to people like Rep. Blackburn of Tennessee by record labels.  During just a 3-month period in 2011, the record industry lobby spent $4 million to buy off politicians to side with them.  The Tennessean reported on it back then.

I get times have changed and that record companies and labels have a poor business model moving forward.  The Internet and technology has done them harm.  And the same can be said for broadcasters.  This is not the time to do battle.  It’s a time for record companies and radio to work together to achieve a common goal.

Wow.  That was sanctimonious, so I’ll put it another way.

Organized crime had its fingers sunk deep into the record industry back in the 60’s and 70’s, because they knew the good deal record labels had with radio and vice versa.

Today’s modern day crime syndicate, known as Congress, is blind to a good thing when they see it. The relationship between radio and record labels built on “mutual respect” and a quid pro quo.

“Hey.  You get your taste.  We get ours.  Everybody’s happy.  Now get outta here.”