p2pnet - rss feed: Fairness, the RIAA and radio royalties
p2pnet news | Music:- “This is about redistributing the wealth from corporate radio.”
So sayeth SoundExchange head honcho and unabashed RIAA beard John Simson (right), explaining why a terrestrial radio performance royalty is a good thing in an interview that originally appeared on allaccess.com (registration required) but which has been substantially reprinted by RAIN (Radio And Internet Newsletter).
Unfortunately, Simson is unable to come up with a better reason than “radio stations have a lot of money” to justify the royalty. By some estimates, more than 90% of the royalties actually paid under the proposed royalty scheme would end up in the pockets of the four RIAA labels, so there is really little question who Simson is leading the cheers for.
But, from what Simson goes on to say, that 90% going to the RIAA may be conservative. Simson peers into his crystal ball and forsees a day when labels will sit down with stations and say, “We’d love you to play this record, so we’ll give you break on performance rates for the first 90 days [the record’s] out …”
Several months ago, Simson was adamant about radio having no promotional value, so this is something of a turn about, and of course, how many songs stay on a station’s playlist for three months, so when he thinks that labels and artists will gladly give away almost every benefit the artist would see from a terrestrial royalty, artists should be paying attention.
And of course, Simson has historical precedent on his side. We all know what happened when the labels stopped giving MTV all those free music videos to play. MTV went right out and started playing all that new music.That’s what they did, right?
They didn’t almost completely eliminate videos from their schedule? This should give everyone who needs to believe Simson is right a lot of hope. After all, Christmas is coming and that means Santa will be here soon, too. Simson says so.
But, getting back to cutting deals with radio stations, who, in John Simson’s world, wouldn’t need to give a radio station a financial incentive to play a particular recordinging? Well, if you give it some rational thought, you might come up with an artist who already has an established name, and all those classic cuts that fill radio playlists from oldies to Jack to AAA.
And who do those established artists record for, and who owns all those classic tracks?
Simson’s big buddies at the RIAA.
Who’s surprised? You don’t think that they’re going to give the stations abreak on royalties for “Stairway To Heaven,” do you?
Of course, this is from the guy who suggested that there were too many Internet radio stations and that the high CRB rates would just force the superflouous ones out of the way. It should be pretty clear by now that Simson will say just about anything he thinks will be necessary, whether it is true or not.
Take this “redistribution of wealth” argument. As far as I can determine, he means that because radio makes a profit, they should pay a royalty. That’s the only reason he gives in that interview: radio has money and the mere ability to pay is enough reason that they should pay.
Now, truth be told, I believe there should be a terrestrial radio performance royalty that should go, at least in part, to the recording artists.
I believe that the basic radio business model is based on people who want to listen to music, and I believe that radio stations should be expected to pay a reasonable amount as the cost of acquiring its material. I see that the same system is in place to pay songwriters and publishers here in the US, and I see no justification for not offering the same compensation to performers and the holders of copyrights in the recordings they play.
I see that almost every country in the world has a performance royalty for artists and labels and that it hasn’t prevented radio from thriving in those countries.
And, just to be clear, I don’t think the royalty is a good idea because it makes up a little for decades of the labels screwing over artists on royalties from record sales. That’s a different issue. The terrestrial radio performance royalty is a good idea because it makes sense standing on its own for artists.
The problem is that the royalty is being looked at as the financial savior for an industry that can’t seem to make an honest dime on its own these days. The record business is scrambling. It can’t figure out how to capture the public imagination any more, and can’t make a dime off the Internet that Steve Jobs doesn’t hand them. So it is only natural that they turn on the other walking dead part of the entertainment industry; terrestrial radio. One zombie eats another.
And we also know how deeply engrained the idea of “redistribution of wealth” is in the record industry. I mean, when Terra Firma paid nearly $5 billion for EMI, we know that EMI turned around and paid the artists a substantial share of that windfall. Didn’t they?
And we know how close to his own heart John Simson holds the concept of “redistribution of wealth.”
According to the last available tax return, for 2005, Mr. Simson’s salary from SoundExchange was more than 625 times more than the average artist’s share of collected royalties.
When the 2006 return is finally posted, I am sure we will find that this disparity is gone. It would only be fair.
And fairness is what this is all about, right Mr. Simson?
Or does fairness only apply to other people’s money?
Fred Wilhelms - p2pnet
[If the corporate music industry had any ethics, Wilhelms would be its ‘ethicist-in-chief,’ wrote CounterPunch’s Dave Marsh. Wilhelms is an entertainment attorney based in Nashville, Tennessee. You can contact him at fred.wilhelms @ gmail.com.]
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November 29th, 2007 at 10:48 am
Since the internet radio (and terrestrial radio) are just ‘distributing and promoting’, the RIAA’s ‘product’, much like the RIAA is doing for it’s ‘content providers’, why don’t the radio stations get to have a deal similar to what the RIAA has with it’s ‘content provider’?
I mean I keep reading about how $0.50 from a $15 album goes to the artist ($20 if it’s ‘older stock’). So why doesn’t the RIAA get paid 0.5/15 of the profit from a song. There are ~30412800 seconds in a year. So for a 3minute song (180 seconds), that would be 180/30412800* 0.5/15 = 1/5068800*income (hmm gross or net?)
(Someone check my math,eh).
So for the 0.11 to stand, the radio company would have to make 557,568 in those 3 minutes.
Ok. I know I went to the extremes a little bit. Let’s go the other extreme. We’d have to reduce the time to actual play time (i.e. say radio is 1/3 music 2/3 talk/commercials), and the $0.50/$15 may have changed (hahahaha, damn that’s funny).
Lets assume $1/$15 is paid to the ‘content provider’ and use the 1/3 music to calculate the payout. 30412800 becomes 10137600 and we have 180/10137600*1/15 = 1/844800
Using this and the $0.11 per song the radio station would need to make, $92,928 in 3 minutes.
Hey, if it’s fair for the RIAA to do it to the ‘content providers’ (the artists), is it not fair for the radio stations to do it to their ‘content providers’ (the RIAA)?