Radio Fights Back, Calls Artist Royalties an 'RIAA Tax'

Unable to explain why satellite radio, Internet streaming-services, and everybody else has to pay royalties to artists and it doesn't, terrestrial radio fights back with words like "tax" and "foreign-owned labels."

Last week I mentioned how the music industry had begun calling terrestrial radio "a form of piracy." They did so as part of an effort to get full royalty payments that now otherwise exclude royalties having to be paid to artists and musicians. Now it seems the National Assn. of Broadcasters (NAB) is fighting back with a clever series of charged catchphrases and terms.

For soon after a House subcommittee passed a bill to require full royalty payments from radio broadcasters they immediately went on the offensive by calling it a "tax" that "migrates overseas" to "subsidize the outdated business model of giant international conglomerates." As xenophobic and misleading as it is you have to admit that whomever came up with this campaign deserves a raise.

The NAB calls it a "tax" since it's a new form of revenue required to play copyrighted music, and plays the race card by trying to scare people about "our" money going to foreign conglomerates (3 of music's Big 4 are based overseas.. Instead of being worried about Dubai Inc. buying up the Chrysler Building, shares of NASDAQ or Citibank, we should apparently be worried that our radio stations have to pay THE ARTISTS (foreign and domestic) vis a vis "foreign-owned" entities.

They also said that free airplay drives music sales to which Rep. Howard Berman (D-CA), a co-author of the bill and chairman of the House Subcommittee on Courts, the Internet and Intellectual Property, said that only "a correlation, not causation" exists between record spins on the radio and sales.

"The approach we've taken to establish performance rights for musicians will provide broadcasters the opportunity to account for any promotional value they provide in the course of determining their royalty rate," Berman said.

"Today's vote comes as a complete non-surprise, given the House IP Subcommittee's history of support for the RIAA-backed tax on local radio stations," said NAB Executive VP Dennis Wharton. "Despite today's action, there remains broad bipartisan resistance to the RIAA tax from members of Congress who question whether a punitive fee on American's hometown radio stations should be used to bail out the failing business model of foreign-owned record labels." said Dennis Wharton.

How many radio station owners are based in your hometown? The transmitter itself may be, but the owner of 1184 stations in this country lives in San Antonio Texas, Clear Channel Corporate HQ.

Terrestrial radio is even fighting back with legislation of its own. Called the "Local Radio Freedom Act" (everybody likes locals and of course freedom right?) is would mandate that "Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for such public performance of sound recordings,"

Now it's no secret that some labels, like Universal Music for example, have been charged with cheating musicians out of millions, and that SoundExchange, the "non-profit" set up to collect royalties "on behalf of artists," has had an oddly tough time finding artists so they can be properly paid (a quick Google search could find most), but I think it's unfair to emerging radio platforms with satellite and online radio to have to pay more than their terrestrial counterpart does.

Moreover, I do still have to hand it to the RIAA for continuing to stun both its proponents and opponents for going after its longtime companion, terrestrial radio, which for decades it actually paid to air music. For if anything it points out that artists and musicians essentially received no royalties from decades of radio airplay while the RIAA and everybody else apparently did. Why the change of heart now? Is it too much of a stretch to think that it's because the music industry would get some of that money?

Probably not.