Radio performance tax

[rob2001]

OK, I realize this is touching on politics. Mods, if you need to delete, do so, or I will delete it myself.

But I think this subject really does affect musicians directly so i'm hoping we can just acknowledge that there is a push for this kind of tax and leave that alone in order to discuss the other issues related.

Here is one link written in opposition by a radio exec.

http://www.wrn.com/2010/02/bill-requires-broadcasters-to-pay-for-play/

My initial take??? Radio and big music are goin down and now they are fighting for scraps.

[GASattack]

You are absolutely right, this can and will effect alot of musicians directly.

This is however the first Ive heard of it, and I will need a bit to wrap my thoughts around it, and get an idea of how bad of an effect this logistically could effect artists downstream and upstream of the airplay.

hmmmm ....

Kevin

[jaydub69]

Rob, I guess I don't really understand why or what the difference is between the performance fee and the royalty. It seems redundant. Why not just increase the royalty fee?

From the article:
"She says the measure is a potential financial disaster for radio stations and it could stifle new artists who rely on air play to get their music noticed."

For my limited understanding, this sounds dubious at best. It seems that traditionally the record companies (because of their economic influence) decided which artists would go on the air. So that independent artists were not given the chance due to not being able to compete financially.

[jjboogie]

They have been running commercials on the radio here in Atlanta about it.

[fenderball]

this represents an effort to change the existing dynamics, creating additional pressure on the radio industry...they are not allowed to take money to play music, so they play what they think will be the hits in an effort to generate ratings, which in turn translate into revenue...the records are played for free for the artists, who profit from the enormous exposure they receive from the airplay...the writers get royalties from airplay (radio pays the publishing/licensing companies)..the problem has become what it is because record sales have been virtually killed by the ease of free downloading, so now the artists are seeking other ways to make money...thus wanting to effectively tax the stations for the music...yet the stations get nothing more than what they had...now, what would happen if the stations could charge the artists for airplay (payola)...why arent they allowed to do that, especially if they start getting charged to play the music???

[rob2001]

You are absolutely right, this can and will effect alot of musicians directly.

This is however the first Ive heard of it, and I will need a bit to wrap my thoughts around it, and get an idea of how bad of an effect this logistically could effect artists downstream and upstream of the airplay.

hmmmm ....

Kevin

This is where i'm at with it too. I'm not fully informed and only recently saw the adds JJ mentioned.

One thing that I notice from that article, they say Radio helps expose new artists.....do they? Seems to me they are in the business of playing whatever music they feel will generate the most listeners. This often isn't new, up and coming bands.

Yet I understand that the money big name performers make for the label is filtered down to fund new bands.

There is a lot to wrap the brain around here....i'm still not sure where I stand.

[rob2001]

And where do stations that play classic rock fit in this? Many of those bands are gone.

Jadub, ya, i'm not sure why there is a difference between royalties and this fee. Maybe because royalties may vary depending on deals made with artists and this would be a flat fee?

[smallbutmighty]

Wow....thoughtful responses by people who admit they are not yet equipped with enough information to make an informed decision.

This is boring.

Where are the knee-jerk reactors????!!!! :mob


;)

[rob2001]

Wow....thoughtful responses by people who admit they are not yet equipped with enough information to make an informed decision.

This is boring.

Where are the knee-jerk reactors????!!!! :mob


;)


This if flippin bulls@#t maaaan:JAM.....death to radio and the labels:Devil....there's a new sheriff in town:eeks....... there's too many of us maaaan:dude...we can't be stopped......REVOLUTION is coming!!!!:D

[taez555]

Songwriters and publishers already get paid on a per play basis through ASCAP, BMI and SESAC. The radio stations have already been paying for this forever, and it’s all part of doing business for them. Just like having to have a liquor license if you run a bar, etc.

It seems that now the record companies want a piece of the pie as well, under the guise of course that part of the money will be going to the performers (which I have a feeling is probably not much and will be gone in the fine print of most contracts). Obviously Radio Stations don’t want to pay any more than they already do, but it seems to me a lot of these tears are crocodile tears. We’re probably talking pennies a song, and even at say $1 a tune extra (which would an extreme example), we’re talking at most $480 extra a day to do business. ($1 per song, x 20 three minute songs an hour, x 24 hours) And that’s and extreme example without commercials or longer songs. If they pay $.25 extra per song, for 10 songs an hour per day that’s only $60 a day. All this just to run their business and make money off playing your music.

As a musician and songwriter I have very mixed feeling about this. Every time I hear an argument against paying me for any of my work be it radio, internet, MP3 download or even in a club it’s always “well, we’re helping you advertise your music for free” This sounds like a load of B.S. to me. Everyone is making money except the musicians, and they’re working hard to convince you that you don’t deserve anything.

Take Youtube for example. Why isn’t Google paying performing rights societies for ever play like Radio Stations have to? They’re making money hand over fist with advertising, yet they continue to pretend it’s all about the free advertising for you.

I don’t know. I feel for the Radio Stations, it’s going to hurt them a little. And I feel for the Recording Companies because they are losing money. However, as a musician, every dollar that is made on my behalf that isn’t going at least partially into my pocket, I feel cheated.

[GASattack]

Rob, I guess I don't really understand why or what the difference is between the performance fee and the royalty. It seems redundant. Why not just increase the royalty fee?

I would presume that the difference would lie in the definition of each. A royalty would go to the label and go towards the income of the artist, a performance fee, well, my guess is they would word that so the only party eligible for income from this would be the record company.

If you think about it, if a song is getting airplay, the airplay itself isnt generating any income, the artist isnt seeing any money until the customer goes to the store or their computer and buys it. But, if the record company can get an additional 'tax' on the front end of it, and call it a marketing fee .. the artist will be lucky if the record company doesnt charge THEM for it as well ..... Double Dipping if you will ,.....

[GAD]

The argument I keep hearing here on NJ radio stations is that the new tax will benefit only the big foreign-owned record companies. That's their words, not mine.

[rob2001]

The argument I keep hearing here on NJ radio stations is that the new tax will benefit only the big foreign-owned record companies. That's their words, not mine.

Thats mentioned in the article I posted. It claims 3-4 major labels are foreign owned. I guess it would depend on how much music that gets air play is put out by those 3-4 labels. It's probably pretty high.

EDIT...I did some looking around and it seems the big 4, Sony, Warner, EMI and universal handle 70% of the world market and 80% of the US market. I'm sure the numbers I found are subject to question. Of the big 4, i'm not sure which, if not all are foreign owned.

[guitarmook]

As it says, the radio stations currently pay per play. But the current structure is that the money goes to the performing arts associations, and is distributed to the songwriters, not to the owners of the recording.

The old way assumed that (and it really did used to work this way) that radio plays would translate into people buying records, and that's how the owners of the recording would get paid.

For a number of reasons, that translation isn't happening in today's market, and so the record companies wanna change the game. I understand where they're coming from, but I'm not sure it's going to work - either that the record companies will really make much money that way, or that radio stations (which are already running at pretty thin margins) would really be able to continue if their costs are increased.

It will be an interesting debate to watch.

[drgonzoguitar]

Songwriters and publishers already get paid on a per play basis through ASCAP, BMI and SESAC. The radio stations have already been paying for this forever, and it’s all part of doing business for them. Just like having to have a liquor license if you run a bar, etc.

It seems that now the record companies want a piece of the pie as well, under the guise of course that part of the money will be going to the performers (which I have a feeling is probably not much and will be gone in the fine print of most contracts). Obviously Radio Stations don’t want to pay any more than they already do, but it seems to me a lot of these tears are crocodile tears. We’re probably talking pennies a song, and even at say $1 a tune extra (which would an extreme example), we’re talking at most $480 extra a day to do business. ($1 per song, x 20 three minute songs an hour, x 24 hours) And that’s and extreme example without commercials or longer songs. If they pay $.25 extra per song, for 10 songs an hour per day that’s only $60 a day. All this just to run their business and make money off playing your music.

As a musician and songwriter I have very mixed feeling about this. Every time I hear an argument against paying me for any of my work be it radio, internet, MP3 download or even in a club it’s always “well, we’re helping you advertise your music for free” This sounds like a load of B.S. to me. Everyone is making money except the musicians, and they’re working hard to convince you that you don’t deserve anything.

Take Youtube for example. Why isn’t Google paying performing rights societies for ever play like Radio Stations have to? They’re making money hand over fist with advertising, yet they continue to pretend it’s all about the free advertising for you.

I don’t know. I feel for the Radio Stations, it’s going to hurt them a little. And I feel for the Recording Companies because they are losing money. However, as a musician, every dollar that is made on my behalf that isn’t going at least partially into my pocket, I feel cheated.

Don't you want your record executive to be happy? :sarcasm

I would presume that the difference would lie in the definition of each. A royalty would go to the label and go towards the income of the artist, a performance fee, well, my guess is they would word that so the only party eligible for income from this would be the record company.

If you think about it, if a song is getting airplay, the airplay itself isnt generating any income, the artist isnt seeing any money until the customer goes to the store or their computer and buys it. But, if the record company can get an additional 'tax' on the front end of it, and call it a marketing fee .. the artist will be lucky if the record company doesnt charge THEM for it as well ..... Double Dipping if you will ,.....

That is exactly how it would work.

As it says, the radio stations currently pay per play. But the current structure is that the money goes to the performing arts associations, and is distributed to the songwriters, not to the owners of the recording.

The old way assumed that (and it really did used to work this way) that radio plays would translate into people buying records, and that's how the owners of the recording would get paid.

For a number of reasons, that translation isn't happening in today's market, and so the record companies wanna change the game. I understand where they're coming from, but I'm not sure it's going to work - either that the record companies will really make much money that way, or that radio stations (which are already running at pretty thin margins) would really be able to continue if their costs are increased.

It will be an interesting debate to watch.

Profit margins in radio are very slim. Format dictates target demographic to which advertisers can use. Arbitron ratings determine how much you can charge (market share). The FCC Deregulation Act of 1996 allowed for most of radio to be owned by large conglomerates (within a single market, 75%), such as Clear Channel. The only way to circumvent this tax this is have Clear Channel buy the large labels, like EMI. Imagine that....

:peenut

[SarasotaSlim]

As it says, the radio stations currently pay per play. But the current structure is that the money goes to the performing arts associations, and is distributed to the songwriters, not to the owners of the recording...


Of course if you're just a small fish BMI just ignores you - here's how:

They base airplay off a random sampling of every radio station's actual airplay. Someone sits around listening and writing down song titles - if your song just happens to show up on one station it can still be over looked and not included because it may be just a single blip on the listening radar. It has to show up in several places to start getting noticed - only then will they acknowledge your song and give you your 7.5 cents. This is a simplistic view but it's the basis for my recurring rant on the subject of radio airplay royalties.

With the current technology we should be able to encrypt unique song specific encoding into every song (mp3 - CD - whatever) radio stations should have readers that decode and compile the play lists and then send the actual playlists directly to the various BMI - ASCAP - SESAC via the interwebs. No more fudging the numbers - I want my 7.5 cents.:bitch

[GAD]

Of course if you're just a small fish BMI just ignores you - here's how:

They base airplay off a random sampling of every radio station's actual airplay. Someone sits around listening and writing down song titles - if your song just happens to show up on one station it can still be over looked and not included because it may be just a single blip on the listening radar. It has to show up in several places to start getting noticed - only then will they acknowledge your song and give you your 7.5 cents. This is a simplistic view but it's the basis for my recurring rant on the subject of radio airplay royalties.

With the current technology we should be able to encrypt unique song specific encoding into every song (mp3 - CD - whatever) radio stations should have readers that decode and compile the play lists and then send the actual playlists directly to the various BMI - ASCAP - SESAC via the interwebs. No more fudging the numbers - I want my 7.5 cents.:bitch

I want you to have your 7.5 cents too.

Is this tax going to make that happen? My gut says no. Am I wrong?

I'm not baiting an argument - I'm genuinely curious. I'm 100% behind anything that puts more money in the artists hands, but anything like this screams of everyone BUT the artist moving money around.

Happy to be corrected.

[rob2001]

I'm still not sure about any of this. The entire business model of selling music is changing.

Record labels were happy to give music to stations (for royalties) when they stood to make a buck from selling an album but that's not happening anymore. Should the labels stick money into a product to make money for radio stations? They have to make a buck somehow.

So really, radio and the labels could go the way of the drive-in if they don't figure something out. And really, how many people really get new music ideas from radio? Most of my musical finds are on line or through video.

Radio is something I put on for background noise while i'm doing something else...and i'll find a station with the least amount of music I find annoying!

I hate to admit it but when I do have to listen to radio, I usually tune in talk shows.

[trickness]

This argument has been going on for a long time, and in fact, the US is one of the few first world countries where the "tax" is not already in place.

Tax is the wrong word - music is content, provided by labels from artists on their roster. The radio stations sell advertising and generate hundreds of millions of dollars.

Anyone with fingers and ears can turn on the radio and hear how little new artists are played, so it's doubtful radio will play new acts any less. They play the same records over and over.

In the old days, people heard a song on the radio, they bought the album. Radio was a good promotional tool that led to sales. Now the math isn't as easy. Content owners have to find ways to recoup investment, or they won't invest anymore. Radio sucks because of radio, and their greed for ad dollars, not because of the labels.

Again, we're one of the few countries where radio doesn't have to pay this fee, and this fight has been going on for ages. Radio stations are using the airwaves to further their own agenda, which is to pay nothing to the rights holder for playing the same 60 shitty songs 365 days a year.

[fenderball]

Sounds kinda one sided...radio pays enormous monies to the publishing companies...look at the revenues of bmi, ascap, sesac, etc...so, include/consider that...
Radio has been damaged by the big companies, no doubt...but at the same time, they play the songs that they believe (alot of it research based) will keep the audience, and the most audience of particular targeted age groups, around the longest, and that is measured through ratings...right or wrong, accurate or not, the ratings are the barometer which in turn translates into revenue...breaking new artists and taking chances musically that could damage ratings jeopardizes the enormous monetary investments these companies have made in their radio stations, and profit is the motive...i am not saying what they are doing is right, fair to the artists or in the best interests of music as a whole...but their primary goal is profit on their investments, not enrichment of the musical universe...that's just the way it is right now, and their argument is that the artists have never had to pay to have their music played and have enjoyed enormous profits from radio's support...sort of each scratching the other's back...






this argument has been going on for a long time, and in fact, the us is one of the few first world countries where the "tax" is not already in place.

Tax is the wrong word - music is content, provided by labels from artists on their roster. The radio stations sell advertising and generate hundreds of millions of dollars.

Anyone with fingers and ears can turn on the radio and hear how little new artists are played, so it's doubtful radio will play new acts any less. They play the same records over and over.

In the old days, people heard a song on the radio, they bought the album. Radio was a good promotional tool that led to sales. Now the math isn't as easy. Content owners have to find ways to recoup investment, or they won't invest anymore. Radio sucks because of radio, and their greed for ad dollars, not because of the labels.

Again, we're one of the few countries where radio doesn't have to pay this fee, and this fight has been going on for ages. Radio stations are using the airwaves to further their own agenda, which is to pay nothing to the rights holder for playing the same 60 shitty songs 365 days a year.

[gem]

W... T... F... I tried to address this just the other day and got treated like a leper w/ a bad cough!.

[gtrnstuff]

Nobody has mentioned what the AFM says in support of this, that the actual musicians (hired session guns or signatory band members) would finally get a piece of the airplay money. Their part in bringing the music to the public would finally be rewarded in proportion to the usage of their performance. It's been only writer and publisher performance rights income in the US.
People apparently forget that under most AFM agreements, musicians actually can make some "back end" money, not just a one time session payment. This is along the same lines as far as I know.

[Hacksaw]

Think the writers or the musicians will actually see any monies? I kind of doubt it..

[rob2001]

Here's a link to to The Music first Coalition. http://musicfirstcoalition.org/background/

The way it's looking to me is that as Trickness said, it's not really a tax. It's a fee that would be split equally between performers and copyright holders. Very different than a royalty.

And from the numbers I found, the monetary amounts are not such as to to force radio into financial ruin.

They would have the option to pay flat fees....$500.00 a year for small stations...$5000.00 a year for a medium sized station and more for big stations. So it might bite into the conglomerate station owners more than your average local stations.

[dohootowl]

Most taxes are bad taxes. This one is no exception.

[Luke]

Governments collect taxes to run the government, not to subsidize industries.

[rob2001]

Governments collect taxes to run the government, not to subsidize industries.

Agree, and thats someting else i'm wondering...and why I don't think it's a "tax". Maybe the G-ment is involved in the litigation of it, but would they be the ones to collect it and distribute it? I don't think so.

I think the word "tax" is being put out there by those that oppose it....most people will immediately say no more "taxes".

[SarasotaSlim]

I want you to have your 7.5 cents too.

Is this tax going to make that happen? My gut says no. Am I wrong?

I'm not baiting an argument - I'm genuinely curious. I'm 100% behind anything that puts more money in the artists hands, but anything like this screams of everyone BUT the artist moving money around.

Happy to be corrected.

I agree - when they adopt a plan that actually pays everyone regardless of how many plays and offer accountability similar to what CD Baby offers then I'll agree with it - until then it's just more smoke and mirrors.

[trickness]

This is a classic case of propaganda versus reality, and I can't believe how many people on this thread are buying into radio's snow job.

This isn't a "tax" - it's a licensing fee. Licensing fees that will go to the labels yes, but also to the artists. You can argue that the labels will cheat the artists, they won't get the money, etc, but the fact is it's a new revenue stream which the artists will participate in. This means more money going to artists, how anyone can argue this is a bad thing is really beyond comprehension.

Radio can afford it, just like cable companies can afford to pay for films and TV shows, programming for their viewers. Music is content they don't own, they don't pay for its development, but they use it to generate massive advertising dollars. It's a joke that they refer to labels as greedy because they might not give a piece to the artists, because if this doesn't get passed, then the labels, and in turn the artists, get nothing for sure. And that's what radio wants.

ASCAP/BMI fees are different, they're for the performance. The owner of the sound recording is getting nothing, that's what this fee is meant to address, essentially it's a blanket content licensing fee. Radio can afford it, and any artist who thinks their music is worth something should support the concept of a fee. Its how business is done in most major music markets around the world.

You can certainly argue that the fee is excessive, but the basic concept underpinning the fee, that the master is worth a licensing fee, is pretty difficult to argue down.

[rob2001]

This isn't a "tax" - it's a licensing fee. Licensing fees that will go to the labels yes, but also to the artists. You can argue that the labels will cheat the artists, they won't get the money, etc, but the fact is it's a new revenue stream which the artists will participate in. This means more money going to artists, how anyone can argue this is a bad thing is really beyond comprehension.

Radio can afford it, just like cable companies can afford to pay for films and TV shows, programming for their viewers. Music is content they don't own, they don't pay for its development, but they use it to generate massive advertising dollars. It's a joke that they refer to labels as greedy because they might not give a piece to the artists, because if this doesn't get passed, then the labels, and in turn the artists, get nothing for sure. And that's what radio wants.

ASCAP/BMI fees are different, they're for the performance. The owner of the sound recording is getting nothing, that's what this fee is meant to address, essentially it's a blanket content licensing fee. Radio can afford it, and any artist who thinks their music is worth something should support the concept of a fee. Its how business is done in most major music markets around the world.

You can certainly argue that the fee is excessive, but the basic concept underpinning the fee, that the master is worth a licensing fee, is pretty difficult to argue down.

This is more what i'm starting to believe. Seems to me the radio stations are putting a lot of money into a campaign against it. Most articles i've found on the net are in opposition and are written by radio people.

What I find interesting is that it's already being paid in the digital world, but it's not paid by traditional radio, and that radio in other countries have already adapted and pay this fee.

[trickness]

This is more what i'm starting to believe. Seems to me the radio stations are putting a lot of money into a campaign against it. Most articles i've found on the net are in opposition and are written by radio people.

What I find interesting is that it's already being paid in the digital world, but it's not paid by traditional radio, and that radio in other countries have already adapted and pay this fee.

yeah, digital stations have to pay! the crazy thing is that a small webcaster has to pay a fee for this, some guy that runs an 80's station for example, but these huge radio groups are saying "no fair, I can't afford it!"