Is Diplomacy Still Possible?


The NAB has chosen a hard-hitting and very public winner take all approach in its heated conflict with Music-First over performance royalties.  I wonder if under the leadership of NAB President Gordon Smith, an alternative might be considered. Under the current scenario if radio loses, the only discussion would be over how much the industry pays. A collaborative approach could generate another radio renaissance!

Over many decades, radio has been the key partner of both artists and labels, creating success, profits and stardom. However, we cannot forget that it is artists who sing the songs!  It is in radio’s best interest to continue to encourage a partnership with a creative wellspring that is a defining element of the industry. A permanent resolution of this issue without damaging a fabulous and long-standing relationship can be a big victory for everyone.

How might radio prosper from a negotiated partnership with the recording artists?  First, and foremost the considerable risk inherent in an all or nothing approach would be eliminated. A negotiated settlement would preempt a third party (government) from writing or having an extraordinary influence over the deal. Even if radio wins the first round, a negotiated permanent settlement eliminates the issue from reoccurring year after year, which, would increase the ultimate probability of an industry loss.

A negotiated partnership could benefit radio enormously.  Place on the table a window of broadcast radio exclusivity for new releases. Hard to police, yes!  Impossible, no. The motion picture industry does this with every new release for the hardtop theaters. Is some film pirated? You bet, but the lines are still long for the blockbuster hits!

What about new music?  HD and Internet Radio may be the perfect platform to expose and experiment with new artists. Spectrum is extremely valuable to artists and record companies, particularly in a tight play-list environment. Why not make access to that environment part of a negotiation?  I could think of no better incubator for new music and new artists, particularly for artists and music genres that currently have little chance of getting on the air. This could be social networking at its best! Crowdsourcing for new artists, driven by radio promotion on FM, on HD and on station Web Sites may well discover new superstars!  American Idol is an excellent example of Crowdsourcing that can also work for radio! HD Radio could provide a new nationwide new music network or networks with new artists uploading content from all over the world, distilling and judging the product and putting only the best on the air. The industry could even offer the carrot of a top weekly, monthly, annual new music prize!

What about paying the performance royalty bill?  Radio delivers extraordinarily valuable targeted audiences and no one knows that better than the music industry.  Can a pool of on air, HD and radio Web Site inventory be made available to become all of part of a royalty package?  A negotiated partnership as opposed to a legislated settlement is likely in the end to be a superior financial arrangement for radio. The radio and music industry are simultaneously undergoing extremely challenging times. That in itself may be a sound bargaining foundation for a permanent, mutually acceptable and innovative profitable agreement.

Win or lose situations, particularly between constituencies that have historically been natural partners are not a good thing. There is also the reality that there is no guarantee that  members of Congress who have currently signed on to support the Radio Freedom Act will not change their minds when it comes time for the actual debate and vote. Some reasonable and important voices in Washington have already sent a message that both sides should “sit down and work out a solution.”   Poignant advice?

Music and radio are synonymous. Together they can creatively continue to be a formidably successful combination. It may be the best way to launch another radio renaissance.

— By Gordon Hastings, GHHmanagement  [email protected]