Radio stations reap the wind

Robert Conrad of WCLV is leading the charge to get the government to not enact the “Performance Rights Act” H.R 848, which would require terrestrial broadcasters to pay additional money for the music they air. Here’s his plea:

WCLV needs your help. And we need it now.
I’m Robert Conrad, president of WCLV. The House Judiciary Committee recently held hearings on the newly reintroduced “Performance Rights Act” (H.R. 848), otherwise known as the “Performance Tax”. If enacted, the bill would require WCLV and other broadcasters to pay a royalty for all the recorded music we play on the radio. This money would go the record companies, most of whom are foreign owned. This would be in addition to the royalty payments we already pay to composers and publishers and to record companies for the right to broadcast our music on the Internet. The financial impact of this performance tax could be financially devastating at a time when the advertising that supports WCLV and its classical music programming is at an all time low due to the recession.
We ask you to write your representative in support of an opposing resolution, the “Local Radio Freedom Act” (HCR 49), was introduced recently. You’ll find a sample letter on our website. Click on the banner on the home page or on the links on every page at wclv.com. Help WCLV and other broadcasters. Express your support of the Local Radio Freedom Act. And please - do it today. Thank you.

I have a great deal of respect for Mr. Conrad. He’s accurately called many trends in the broadcasting and has made WCLV the strong station it is today. In this case, though, he’s having to pay for the incompetence of others, and I’m not sure it’s a battle he can win.

A little background. When the idea of charging radio stations for the music they used first came about, there was (naturally) resistance from the broadcasters. Most stations had their own house orchestras, or featured a lot of live music (this was the 1920's), and so the primary rights issues were with the composers. ASCAP (the American Society of Composers and Publishers) was formed to collectively negotiate fees and collect royalties from various performing venues. They determined that radio stations constituted a public performance and demanded their fees.

When ASCAP double their fees in the 1940's broadcasters responded by allowing their orchestras to only play public domain works (that’s why we have Glen Miller’s big band arrangement of “Little Brown Jug”). They then created their own composer’s organization, BMI (Broadcast Music, Incorporated) to offer much more favorable rates to the stations.

In time, everyone came to terms, and things were fine. When broadcasters started using recordings rather than live musicians in the 1950's, though, the question of paying the record labels for the use of the material came up. Eventually, it was agreed that the publicity radio play – and resulting record sales – far outweighed any fee the labels might collect, and so artist fees never got off the ground.

In the 21^st Century, things got ugly. When satellite radio started negotiating fees, in 2004, the record labels weighed in again. It was a new media and the old rules didn’t apply, they argued. They wanted XM and SIRIUS to pay artist fees along with the ASCAP/BMI royalties. And terrestrial radio stations sat on the sidelines and egged the labels on.

Broadcasters were terrified of satellite radio and were hoping that these additional fees would help kill the fledgling industry. There were some NAB members – like NPR – that tried to get their colleagues to see that this was a dangerous precedent to set, but no dice.

In 2007 when Internet radio stations had to negotiate their fees with the SoundExchange (founded by the RIAA), they too had to pay artist as well as publishing royalties. Again, NPR and a few others tried to get the NAB to weigh in, but to no avail. Terrestrial radio stations, for the most part, didn’t stream and wanted these upstart Internet radio stations to be driven out of business by these fees that they didn’t have to pay.

In the end, artist royalties were levied with very little effort. And the primary reason was because satellite radio was already paying these fees. The precedent had been set.

And now the spotlight’s turned to terrestrial broadcasters. If every other broadcaster has to pay artist fees, why not them? And it’s now being argued that over-the-air radio is no longer the place where new music’s discovered – the Internet’s taken that role over. So if the publicity value isn’t there anymore, why should terrestrial radio be the exception?

Why, indeed? This isn’t something that’s come out of the blue. Digital broadcasters have been fighting this battle for the past five years, with terrestrial radio rooting for the other side. And now it's their turn. It's unfortunate that stations like WCLV are getting caught in the crossfire, but I think we’re just seeing an industry reaping what it’s sown.

- Ralph