The case for performance fees fairness


We admit it. The MusicFirst Coalition is right: "Radio should be held to the same standards and should play by the same rules as its competitors." Agreed. AM and FM stations should pay the same performance royalties as Internet streamers and satellite radio – and that royalty rate should be zero. The radio industry should be aligning itself more closely with the Internet streamers to not only fight the outrageous CRB increases in Internet streaming fees, but to have Congress eliminate them altogether. Just as AM and FM radio airplay sells records, Internet radio airplay sells records. In fact, the Internet guys have added a great bonus to the record companies and artists that over the air broadcasters could never provide – a way to click through and immediately buy the music the listener is hearing. And with the broad variety of music that can be offered through unlimited Internet streams, new markets are being created for obscure music genres and markets are being rejuvenated for the sale of oldies from artists such as Sam Moore and Judy Collins. Similarly, new HD Radio channels will be a boon to record sales once enough receivers are in the market. Radio sells records. We know it. Record company executives know it. Artists know it. One cockeyed economics professor at the University of Texas at Dallas has devised a formula to "prove" that radio airplay hurts record sales – a formula that no doubt could also "prove" that the sky is green and the grass blue – but that doesn’t change the fact that the record industry would see billions of bucks in diminished record sales if, somehow, radio airplay were to disappear. The satellite radio guys, whose brilliant business strategies are well known, were stupid enough to willingly sign contracts right up front to pay out performance royalty fees for the privilege of promoting record sales, so we don’t know if it would be possible to include them in such a coalition to seek fairness on Capitol Hill. But for AM radio, FM radio, HD Radio and Internet radio, the common cause should be congressional action to level the playing field and make no one pay for helping the record companies sell their wares. Local radio operators time now to get in touch with your congressional reps as they are home for recess.

Time for local radio to unit and kick ass!
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