Radio: The RIAA's performance royalty glee

So here we are.

If the streaming audio rates the NAB negotiated for terrestrial radio stay remain in place and the Performance Rights Act bill is passed, music radio will be history.

How many times do they have to be told? When content sharing is becoming part of most online media business plans, why is the radio industry allowing itself to be pushed and shoved in the opposite direction?

Radio invented it. When radio stations started playing records after World War II – it didn’t own the content – but playing music on-air provided its owners - the artist and the label - free exposure to the court of public opinion – the radio listener.

It’s the same principle as Google’s search engine. They don’t own the content that’s searched.

Did you see the score on Capitol Hill last week? The labels v. terrestrial radio: 21-9. Radio? Drop it likes it’s hot.

And what did the NAB have to say about radio’s slaughter?

What say you, NAB mouthpiece Dennis Wharton?

“Lawmakers are growing increasingly skeptical over record label claims that this legislation is about helping artists. And given the historic abuse of artists by the labels, who can blame them? The sad truth is that a performance tax will cripple an artist's number one promotional vehicle, free radio airplay, and it will transfer hundreds of millions of dollars from America's hometown radio stations into the coffers of foreign-owned record labels."

Dennis, when the NAB board fired Fumbles you were supposed to sack his speechwriter, too.

The NAB - S.O.S./different mouth. Denial, denial, denial.

You don’t get it - do you, Dennis? That vote verified that radio’s credibility with consumers is even shoddier than the labels.

Wharton’s quotes would have you believe radio’s winning. It’s not. Not even close. Short of a miracle, there will be a performance royalty fee on terrestrial radio broadcasts soon. David “Fumbles” Rehr gave that one away when he tried to play tough and the RIAA publicly tweaked his nose.

Right about now we should add that some of the best new music to be released over the past few years is coming from independent labels and direct-to-consumer sales that aren’t card-carrying members of the RIAA.

The labels’ ethical cirrhosis that used to infect radio stations has now spread to Capitol Hill.

Here’s your elected officials capitulating to clientele that combine the sobriety of Lindsay Lohan, the savoir faire of Michael Vick, and the vocabulary of any character in a Quentin Tarantino movie.

We’re talking about the music industry here. These are people that will hold a golf tournament for charity except that they forget to name the charity, because it always begins at home.

This is a business where an artist is most likely to receive royalties due after a label audit.

You were expecting maybe honesty? Integrity?

Rep. John Conyers, Jr., sponsor of the Performance Rights Act (H.R. 848) says, “that the needs of small, minority, religious, and non-music broadcasters are taken into account as he and other Members of Congress continue to work on the legislation.”

Read between the lines here. He’s helping the RIAA divide and conquer.

I’m not defending Clear Channel, Citadel or Cumulus. Come on, how long do you think they’ll be around? I’m saying you can’t run with multiple rule books. One law must fit all sizes – and any law that forces radio to be extorted by the labels is wrong.

This tiered payment system, based on revenue, has stations with annual gross revenues – remember that word gross, we’ll get back to that - of under $100,000 paying a flat fee of $500 each year.

Stations with gross revenues between $100,000 and $500,000 will shell out $2,500 a year.

Stations that bill between $500,000 and $1.25 million gross will send the RIAA a $5,000 kiss annually.

Stations billing over a million and a quarter gross will be required to negotiate royalty fees with the RIAA’s SoundExchange collection wing with the wiser-than-you-think judges on the Copyright Royalty Board (CRB), the government body that sets royalty fees. According to the bill the CRB will settle disputes and weigh the value of music to a station and its promotional exposure to the labels.

What’s it worth to be a fly on the wall in one of those meetings!

In all honesty, it’s still too early to tell the good guys from the bad on this one. You’re not dealing with a bipartisan issue here. This one? It’s all about the money – and that’s where it gets precarious.

Now here’s the good news. Stations grossing $5 million will be exempt from the fees for three years and those grossing over that amount will be exempt for fees for one year. Such a deal!

Now, lets get back to those gross revenues. That’s defined as all revenue earned – including those three worlds that have come back to haunt radio time and time again – non-traditional revenue. It’s all gross – not just time sold on the air. It’s all gross.

They’re not just stealing the stove. They’re coming back for the smoke.

Did you sell station merchandise? Did you put on a job fair? Ka-ching! Ka-ching!

My guess is that your best bet of getting V.I.P. tickets to any of this summer’s major tours is to either have an in with someone on the Copyright Royalty Board or be a fellow Congressperson or major contributor to one who’ll cozy on up to Rep. Conyers. If you want V.I.P. U2’s – you’re talking premium. You’ll need an in with someone on the Copyright Royalty Board for those ducats.

Remember the old RCA-Victor logo with the dog and the Gramophone – His Master’s Voice? Just cut and paste Rep. Conyers’ head on the dog. One picture is worth a thousand words? That one’ll be worth the entire Performance Rights Act bill.