After years of steadfast opposition to any performance royalty payments to record labels and artists – which would be in addition to the long-established payments to ASCAP, BMI and SESAC for composers and publishers – the NAB is now trying to sell member radio stations on the possibility of reaching a settlement with the record labels on a new law which would establish new royalty payments from radio to the labels and artists, but also set in law some other things to benefit radio. Needless to say, there is no unanimity in the radio industry at this point.
Emmis Communications CEO Jeff Smulyan told RBR-TVBR he’s very pleased with the direction of the negotiations. “I think it’s a very wise course of action for the industry,” he said, citing the risk-rewards equation.
“I wish that people understood what the impact of getting radio tuners in cell phones would be. I don’t think everybody really understands it. I think it is an issue that is more important than people know. 20 years ago we sold 40 million [Sony] Walkman a year in this country. We sell none now. There are almost 300 million cell phones in the United States. Almost every American carries one with them every day. Around the rest of the world, most of them have radios in them. Having a radio in that device would be a game-changer for our industry,” Smulyan insisted. “That’s not the only reason to do this, but it is a major change for our industry.”
Smulyan doesn’t buy the idea that the Performance Rights Act will fade away if Republicans recapture control of Congress. “The fact is there is significant bi-partisan support for the radio royalty – and the cost of it would be monumentally more. And if it gets shoved into the Copyright Royalty Tribunal [now called the Copyright Royalty Board] it gets even more expensive,” the Emmis CEO said of the proposed 1% royalty rate settlement.
Saga Communications CEO Ed Christian has made it clear that he is opposed to negotiating any deal which would change the traditional relationship between the radio and record industries, whereby the labels and artists are compensated by radio’s hit making ability. He is not backing down from his comments in RBR-TVBR opposing the settlement negotiations. Christian, by the way, is deeply involved in music royalty issues, since he currently heads the Radio Music Licensing Committee, which is locked in litigation with both ASCAP and BMI over royalty fees to be paid by radio stations to composers and publishers retroactive to January 1, 2010.
Some other group heads contacted by RBR-TVBR were unwilling to take a definite position one way of the other at this point, saying they wanted to see where the NAB negotiations with musicFirst lead.
West Virginia group owner Al Sergi, of Summit Media, is not on the fence. He is strongly opposed to the deal under consideration. In his view, the big broadcasters are cutting a deal which will have relatively little impact on their financial position, but create a substantial burden for small stations. “Unlike you big city guys, rural stations have very limited sources of revenue and advertisers, so if we can’t grow our stations, then we have to downsize them,” he noted, complaining that an additional fee will add to a downward spiral of cost-cutting which drives away some listeners and further erodes the appeal to local advertisers.
Sergi also noted that many hit records these days seem to have commercial pitches for products thrown into the lyrics. He noted several recent examples from Country hits: George Strait- Run “take a truck, take a Chevy”, Easton Corbin- Roll With It “open that bag of pigskins you bought at the Exxon the last time we stopped”, Trace Adkins –Rough & Ready “Wranglers, Skoal ring”, Eric Church – Love Your Love The Most “Love my Jim Beam and Coke”, Brad Paisley – American Saturday Night “cooler full of Corona and Amstel Lights”, Billy Currington – Pretty Good At Drinking Beer “Bud Light” repeated various times.
“The list goes on and on, especially in country music,” Sergi said. “Somebody is making money, my guess is the record labels… Radio Broadcasters want to be paid for the airtime you have been stealing from us with your music. This is outright payola and our government is looking the other way! If we have to pay you, then RIAA you have to pay us for the name brands you sneak into today’s popular music!”
RBR-TVBR request: Get involved it is your business. What’s your take? RBR-TVBR wants to hear from the radio industry. What do you think of the NAB negotiations with the record labels? Feel free to post a brief comment below and/or send us your thoughts for publication to [email protected]. Please include your name, title and company affiliation.