Record Labels: Radio Doesn't Sell CDs
When the Recording Industry Association of America (RIAA) isn't busy suing kids for piracy, it's out looking for ways to make up for quarter after quarter of sickly CD sales.
Its new plan is to collect more copyright royalties from radio. Already this year, the RIAA was instrumental in getting dramatically higher royalty rates for Internet radio stations passed by the Copyright Royalty Board. Now it's going after the old-school terrestrial radio stations. The RIAA will try to change the law so that traditional broadcast radio stations pay performance royalties for the songs they play, the LA Times reports.
Broadcast radio stations have long enjoyed a federal exemption from paying the fees, based on the common belief that radio helps sell records. The RIAA is now saying, in effect, that it doesn't believe in the promotional power of radio. It just wants the money.
This move touches directly the struggle of Net radio stations against their new royalty rates increase, which is set to go into effect July 15. One of Net Radio's main arguments in Washington has been that webcasters are forced to pay performance royalties while traditional broadcast stations do not. So much for that.
Who knows if the RIAA will have the lobbying chops to get the terrestrial radio stations' royalties exemption lifted. They'll have to square off against the National Association of Broadcasters (NAB), which represents both TV and radio broadcasters, and has an equally strong lobby in the Capital.
Of course the RIAA's mantra remains that it's only acting on behalf of artists. It chooses its public-facing spokespeople accordingly. This time it's even drug out an old Supreme, Mary Wilson, to cry (baby blue make-up running under boom lights) about having to keep on playing Indian bingo palaces at 63 because she never gets a taste of the those sweet radio royalties.
"The creation of music is suffering because of declining sales," moans RIAA Chief Executive Mitch Bainwol in the LA Times piece.
It's true that the RIAA's SoundExchange does collect royalties for artist-copyright owners. But c'mon. If you've had any direct dealings with record labels (as I have), you know that recording contracts are set up so that the artists are usually the last ones to get paid. Sometimes the artist ends up owing money to the label. So give me a break with that "we represent artists" stuff.
The reason the RIAA set up SoundExchange in the first place was to collect revenues for its member labels. And the labels, not the artists, are certainly behind this new (desperate) tactic, too.
PC World's Marketplace
PC World's Free Whitepapers
tech news tech blogs community & forums laptop prices software reviews downloads
Sales are suffering because of the incredible decline in the average quality of contemporary music. Simple as that.
I absolutely agree, Giorgio.
Furthermore, illegal downloading can not and will not be stopped. Record labels need to embrace the digital age by
1. learning to sell DRM-free music, and
2. delivering free music over the internet, supported by means other than direct payments from listeners.
Some artists such as Jimmy Buffett have their own internet radio stations and use them to promote their own music, concert and promo gear. Seems to me, Buffett has done a pretty good job of it - he earned a Grammy recently for the first time in his long carreer and try to get a ticket when he comes to town!
Wake up, record labels!
JT
It's breathtaking, how stupid the RIAA is. If they do this, they are then poised to kill radio as well as their own business.
For example, there is already so much talk on radio that I seldom listen. I get exposure to new music from the internet, specifically the net radio stations (as well as iTunes) that the RIAA is also trying to kill. When I am exposed to something that I like, I buy it from iTunes. I haven't bought a CD in over a a decade, and probably never will again. But I'll but from digital services.
I really can't believe that the RIAA doesn't get this new business model. Stupid, stupid, stupid.
hd
I certainly will not defend the RIAA, and the proposed rate changes are too burdensome on small webcasters. However, Mark Sullivan is VERY misleading in making it sound as though performance royalties are a bad idea in general because artists will not benefit.
Performance royalties get paid directly to the artist - they are why songwriters have historically done far better than recording artists (performance royalties have always existed for the underlying song). In fact, royalty income from SoundExchange is the one thing performing artists can call their own without interference from the label - and which is virtually never recoupable by the label. It's the one way artists CAN get paid!
Moreover, to say that terrestrial radio shouldn't pay a performance royalty while webcasters should does the opposite of what most reasonable people would want: It gives a huge advantage to major media companies like Clear Channel while taxing all the little guys.
i am a musician. I make music. THEY get the lion's share. WHY? because they control HOW the music gets to the ears of the masses. Sure internet radio can get you heard, but once again, WHO is gonna KNOW the internet station is there? there are thousands on thousands! The biggest ones are that way from playing WELL KNOWN artists from regular radio. So WHY would they start spinning a lot of UN KNOWN people?
the MAIN trouble with radio, is that they cannot play whomever and whatever they wish. REGARDLESS of that station that says they play what they want, they are TOLD what to play from a list.
Therefore the guy who lives down the street with that KILLER song on file, is called a "demo" and the guy coming from the label is called a "release". You can have many copies made... STILL a demo.