Monday, February 9, 2009
Radio: RIAA v. NAB - two wrongs don't make it right
By now you know that the record labels are demanding a bailout from the radio industry.
Their claim, which they’ve taken to Congress to resolve, is that radio has been on the receiving end of an unmerited free ride.
The Record Industry Association of America (RIAA), the lobbying arm of the recording industry, wants Congress to impose a performance tax on radio.
The National Association of Broadcasters (NAB), the lobbying arm of the radio industry, opposes it.
Radio already pays annual fees for music airplay to ASCAP, BMI, and SESAC.
There are no good guys here. Pot, meet Kettle. Glass House, meet Stones. Deflation, meet Stagnation. Wrong, meet wrong.
Both radio and record industries are wholly dysfunctional and delusional. For the past decade both have ignored their customer base. Now, they wonder why their market share has dwindled.
Radio homogenized its formats, eliminating localism, talent, and R&D. Labels churned out mostly mediocre CDs and retailed them for almost double the cost of a hit movie DVD.
Customers are as loyal to you as you are to them. Do most consumers really miss record stores? If the station you listen to – assuming you still listen to radio – went off the air, would you really miss it?
The labels only cared about getting the adds and spins. Now, they’re claiming that radio, imbalanced with mundane voice-tracking and jockless jukebox formats like Jack, Bob, and Radio, no longer sells their music because song identification is an option.
Both industries resisted and rebuffed new media.
The labels may have invented payola but radio bought in and listeners were deceived by hearing new music restricted to those that could afford to pay for play. Like drugs, radio couldn’t just say no.
The consequence? The public has no empathy for either.
They’ve migrated to the Internet for music – both to hear it and to download it – legally and illegally.
Now each side is out to make the other look bad.
The labels claim this new performance tax will trickle down as royalty payments to artists.
Is that before or after Universal Music pays CEO Doug Morris’ $14.5 million dollar salary?
Is that before or after Warner Music pays CEO Edgar Bronfman Jr., who bought the company so he could run it, albeit poorly, his $6 million package?
Just for the record, CBS CEO Les Moonves, whose watch includes CBS Radio, collected $33.7 million last year. In the same time period, CBS Radio purged 700 jobs.
Still, like a mastodon slowly sinking into a tar pit, the labels are thisclose to extinction. But unlike dinosaurs, they’re trying to lug radio into the pit with it.
If you want supplementary background on these organizations, just go to the “search blog” box at the top of this page and type in “NAB” and “RIAA.”
The RIAA has been seeking to squelch or control Internet radio for years through its collection arm – SoundExchange.
The RIAA has their act together under its CEO Mitch Bainwol and they’ve been snarling, snapping and barking like rabid dogs at the NAB while its CEO David “Fumbles” Rehr plays scared mouse and writes long, rambling, meaningless letters to anyone with the time to read them, which is absolutely no one on Capitol Hill.
The RIAA-backed Performance Rights Act was introduced by John Conyers (D-MI) and Howard Berman (D-CA). The NAB, known for its own hyperbole, claims it will cost the radio industry between $400 million and $7 billion. But the truth is still somewhere in-between. It’s an expenditure the radio industry cannot afford.
There is always the possibility of the law of unintended consequences. The bill passes and all music radio formats go – wackjobs unite - talk.
While Fumbles was mailing stuffed ducks with an anti-RIAA message tacked on them to members of Congress, RIAA lobbyists worked the room, shaking hands and taking names. There’s an old saying – never under estimate the value of a cash bribe and there’s a new saying – never underestimate the value of front row tickets to a U2 or Coldplay concert for one of your high-roller campaign supporters.
Fumbles is Mr. Outside, Bainwol’s Mr. Inside. They’re both recurring presences, like ants at a picnic, snakes at the garden party, or herpes.
The RIAA cites the devastating drop in both listeners and their time spent listening to radio as the reason for its loss of influence. Right now, the odds are in favor of Congress approving the tax.
Been to Capitol Hill lately? Check the demos. You’ll see a whole lot of people working on the Hill who were listening to the radio when deregulation and Clear Channelization kicked in and kicked them out.
Look it up. Early last year I suggested that Internet radio only owners and the NAB should join forces since the heavy-handed tactics they were receiving from the RIAA would eventually close in on terrestrial radio, too. *
Let the record show that Fumbles ended up taking the opposite tack. He tried to pull a fast one, and got outed for a clandestine maneuver in Congress to block passage of the Webcaster Settlement Act of 2008, which allowed negotiations to continue between the RIAA’s SoundExchange and Internet radio over Internet radio royalty payments.
The NAB will never criticize what it doesn’t understand – it’ll just try to kill it.
Can’t we get Fumbles to quit due to ill health? We’re sick of him.
I fear that when it comes time for the face-off between the RIAA and the NAB, Fumbles will be prepared for a Punch and Judy show while Bainwol will be ready for nuclear war.