Back in the good old days of radio, Congress granted to radio a blanket exemption from paying performers money for using their music (the composers and lyric authors do get paid and always have).
The rationale was that record labels were eager to have stations play their music (because it led to record sales and awareness of the musician for concert goers). Rather than the labels paying the stations (which some did anyhow – see PAYOLA), and the radio stations then paying the performer, the agreement was no money should change hands. The record labels paid performers out of their sales revenue, not payment of royalties.
Spin forward to 2009 – people largely buy their music now via download, fewer and fewer people listen to FM radio to hear music, and the music business is much different. Songs are streamed over “non-broadcast” media (internet streaming) and those venues DO have to pay performance royalties. Making them pay for using songs, but radio stations getting them for free creates an “unlevel playing field” in some people’s opinions.
Representative John Conyers of Michigan is leading the charge to end this exemption for broadcast radio. Doing so would then require over the air radio stations to pay performers for airing their music.
The National Association of Broadcasters has enormous clout in Washington, which has made this exemption about as iron clad as the subsidy still in place to raise sheep in case we need to fight WW1 again. The NAB is using strange logic like “If this happens, corporate radio will end up deciding who gets on the air and who doesn’t”. Ummm…. isn’t that how it works today?
At a time when all of the large corporate radio owners are in difficulty financially to some degree, coughing up royalties might push them out of business, and would certainly accelerate FM stations moving to News/Talk rather than music.
All those FM Rock stations out there who promoted Candidate Obama. Change has arrived, and the target is you. Surprise!