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.