Does it seem as odd to you as it does to me that not one radio group CEO has made even the slightest peep over the National Association of Broadcasters’ (NAB) botched negotiations on Internet radio royalties from now through 2015 that pertain to all terrestrial stations that stream online?
Come on! This is deal with the Record Industry Association of America’s (RIAA) SoundExchange division is as credible as the royalty deal Howlin’ Wolf signed with Chess Records in the fifties.
They could’ve just flipped a coin. Heads, RIAA/SoundExchange wins; tails, the radio stations lose.
At first glance, it appears the NAB pulled off a stunning upset. The deal gives terrestrial radio streamers a 16 percent discount on royalty rates for this year and next.It’s followed by an inflexible and distinct set of rates from 2011 to 2015, which ends the need for the NAB to partake in the next round of Copyright Royalty Board (CRB) proceedings.
But no one’s riding for free. It is with deep regret that I must inform you that the downside to the deal is that radio will gets the shaft for its initial discount by the NAB agreeing to a royalty rate that will increase on an annual rate that is far greater than the current rates set by the CRB.
Rather than decipher the legal mumbo jumbo, which can be found here, let’s wrap it up into one simple fact – radio stations will be forced to pay royalties per listener, per song. The more listeners a station has on line, the more royalties they’ll have to pay. Isn’t there something intrinsically wrong with this picture?Radio got screwed.
If any of this makes sense to you, you’re probably a lawyer for the RIAA.
And here’s the NAB, vehemently opposed to the FCC and any other governmental authority interfering with its programming, acquiescing like cat-frightened mice to the RIAA, in not only surrendering to their one-sided deal but also agreeing to a number of programming amendments.
Though some of these rules may be relaxed – nothing was specified. SoundExchange’s original demands included no pre-announcing of when a song will play; no more than three songs in a row by the same artist (If you play three songs by Cream followed by one by Blind Faith did you violate their hallowed rules?); no more than four songs by the same artist in three-hours, and no more than two songs in a row from the same CD (that eliminates that side two medley on Abbey Road – and ends just about any medley by Bruce Springsteen and U2).
Streaming stations will also be required identify the song, artist, and CD title in writing on its web site while it’s being played, which is the only rule in the cluster-muck that radio should follow for purely commonsensical reason.
Are you following this? It’s 2009. The world is migrating to the Internet. Radio’s only rescue is to create content that will translate to on-line listening as we move toward this inevitable great convergence. So why would the NAB agree to a deal where radio will be penalized for the number of people who listen on line - and add restrictions to its programming?
The more successful you are, the more it’ll cost you.
Look, these tough economic times will weed out the weaker chains and stations and only quality programming will stand the test of time – but when you tack on this royalty charge, no chain or station will win. Radio will be held hostage by the labels and will end up like most hostages – dead.
The labels wrecked their own industry by refusing to recognize new technology. Now not only do they want – but they’ll probably get exactly what they want – a bailout - and it’ll come from radio – and the NAB, as if on cue, rolled over on its back like a defeated dog.
Two facts: 1. Radio airplay sells music. 2. Labels “forget” to pay their artists royalties. Don’t believe it? The majority of acts that audited their labels found that they’d been gypped out of royalties by their own labels! Go to the top of this page, type in "RIAA" and hit search and see for yourself.
It should be noted that even though the NAB did the deal, terrestrial radio was represented by a coalition of broadcasters from Clear Channel, Bonneville, and Salem. Despite the NAB’s backing and the millions of dollars spent on legal fees by radio, the labels got all the benefits.
Maybe the current radio group CEOs aren’t protesting this absurd deal because they don’t plan to be around much longer?
Here’s the scary part.
If the NAB gave in this easily to SoundExchange for streaming audio royalties, what chance does NAB CEO David “Fumbles” Rehr’s rudderless ship of an organization have against the RIAA when they go in for the kill, demanding a performance tax for terrestrial radio airplay from Congress.
Twenty-one months is the average life span of a one-dollar bill in circulation. That’s about as long as music on the radio will survive if it’s forced to pay this one.