Music Rights issue about to clobber radio

The Department of Justice is now involved. Just before World War II, the radio business decided to “break” ASCAP, who the NAB felt was increasingly abusing its control over payments to Composers and lyricists and artists [hold that correction!]. The NAB created BMI and the radio industry refused to play music unless musicians signed with BMI. The performers didn’t back down and for a couple years, radio was filled with Country music and R&B artists that were beneath the dignity of ASCAP to handle.

The showdown eventually ended with a consent decree that granted ASCAP and BMI joint protection from antitrust actions in exchange for government regulating their rates. That worked until Satellite radio and Internet streaming and iTunes arrived.

Radio currently does not pay the performers, but Pandora, Spotify and Sirius/XM do. Clear Channel has been working the edges of this mess by negotiating deals outside of BMI and ASCAP (and SESAC) directly with music producers. The black music artists have been particularly vocal that they have been screwed by the current system.

Eric Holder is black, and Americans have difficulty talking openly about race. The Department of Justice has formally announced it is going to review the Consent Decree with an eye to ending it or modifying it. Congress has also been active in this contest of wills. The loudest voice in Congress is John Conyers, who represents Detroit and has former Motown artists as supporters and friends.

Many in the radio business are still living in the 1960s when teenagers would hear a song on the radio and rush to the local radio store to put down $.99 to buy $.01 of vinyl. That world no longer exists, and kidz are not listening to radio to find new music. Those radio stations would go out of business before ever paying $.01 in “tax” to the musicians for their performances because the record companies would not exist without radio!

Politicians know that their access to radio and TV (and at what rates) has a huge effect on their elections – and most are siding with the NAB for now.

It’s showdown time, and the stakes for radio are very high. Cumulus betting the ranch on Country music is not unrelated.

This entry was posted in 2014 Election, American Politics, Collapse of America, Radio Biz. Bookmark the permalink.

9 Responses to Music Rights issue about to clobber radio

  1. HPaws says:

    I was really taken aback about eight years ago to find that my 10k+ worth of iTunes purchases were not mine at all. I purchased the necessary European soft wear to break the coding on my music. Multiple copies and external hard drives keep Dean, Frank, Ella, Sammy and all the rest all mine. That small print is part of the work around I am sure.

    • CC1s121LrBGT says:

      HPaws, you may own a license to that $10k worth of purchases, but who do you think owns it when you pass away? I do not think it is yours to pass on to your family or friends – check the fine print (and remember they have the right to change the fine print at any time without your consent).

      Consider the other side of the debate over owning content versus the media it is stored on. How many times to you think people have bought songs from popular artists? Consider the Beatles- maybe you bought the 45 of a song in the 1960s, then paid again for a song you already bought to have it on an album in the 1960s, paid again to have it again on an 8-track in the 1970, paid again to have it on a “best of” album in the 1970s, paid again to have it on a CD in the 1980s, and paid one more time to have it on a remastered CD in the 1990s.

  2. CC1s121LrBGT says:

    This will bring up the issue of competition and protectionism since music streams are not limited by national boundaries. About 10 years ago, I had joined a free streaming service from Canada but it would not allow me to register without a Canadian postal code, so I entered H3C 3A8, the postal code of the CBC in Montreal… and it worked.

    Today, providers seem to rely almost exclusively on IP addresses, so there are many VPN services that allow you to have an IP address in the country of your choosing.

    How will the Feds handle 91X, a former Clear Channel station in “San Diego”? http://en.wikipedia.org/wiki/XETRA-FM

    • Art Stone says:

      Over the weekend, Lew Dickey was upbeat that the FCC might lift the Per market limits so he and Clear Channel can buy up CBS radio and end any residual influence of local radio. Nine stations in New York isn’t enough.

  3. Art Stone says:

    June 25th is when Congress is going to hold hearings. Everyone who is someone will be testifying.

  4. CC1s121LrBGT says:

    It is a big deal for so much money to be taken from the general public via non-negotiable fees, then distributed to those that “qualify” for payments under non-negotiable rules.

    In the old days, record companies could set different prices for different albums- the newest releases by popular artists sold for more than albums in the “bargin bin”. Will artists be able to set their asking price on a song by song basis? The technology exists to pay the artists based on what actually airs versus the old way of paying the best selling artists most of the money even if an eclectic station never played their songs.

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