Despite the popularity of personalized Internet radio and portable music technology, traditional radio stations maintain great audiences. Compliments of advertisers who pay for air time on commercial radio (or listener donations for non-commercial radio), it remains a valuable source of free entertainment and news for the general public.
However, the dynamics of the radio business may change if the proposed Performance Rights Act is put into play. Under the legislation which was proposed in February 2009, radio stations’ budgets would take a hit, in order to broadcast the big hits.
In an April 2009 article in the San Antonio Business Journal, W. Scott Bailey explains that the proposed legislation and the controversy surrounding it stem from the conflicting interests of the music industry and the radio broadcast business.
First and foremost, they disagree on whether or not there should be a performance tax, a measure which is in the interest of the recording industry. If passed, the Performance Rights Act would change copyright laws to require commercial and some non-commercial radio stations to pay a tax to play recorded music. Representatives of the recording industry demand that the legislation be passed; they argue that radio is the only medium not required to pay royalties to artists.
Counter legislation has been drafted, known as the Local Radio Freedom Act; if passed, the bill would exempt local radio stations from paying fees to air recordings. Supporters of the Local Radio Freedom Act say taxes on recorded music would cause the downfall of small-scale radio stations, which largely would not have the revenue to stay on the air if required to pay royalties to artists in addition to the royalties already paid to songwriters.
An underlying issue Bailey highlights in the article is that of government regulation. The question here is whether it should be within the jurisdiction of Congress to create and enforce legislation that would change the way business is conducted between the recording industry and broadcasters.
I can understand the viewpoint of artists, who wish to be fairly compensated for their work. However, I wonder if the benefit of the use of public airwaves should suffice for artists’ compensation. If it were not for radio broadcasts of their songs, musicians would be significantly less visible (or rather, audible) to the general public. Advertisers pay for airtime in order to advertise their products. Since music is marketed as product, why should broadcasters pay to promote the product, when the broadcasts benefit the artist? The more airtime the music gets, the more popular it becomes, and the greater the number of albums or songs the artist will sell, for which they will receive revenue. Also, if the main concern of a musical “artist” is to make money, they should reconsider their motivations for being in the business.
Also, if local radio stations cannot pay to stay on the air because of the new tax, the repercussions might actually be detrimental to artists; if local radio stations cannot stay on the air, then listeners would have no choice but to listen to national radio. This could significantly limit the public’s exposure to diverse content, creating an even more narrow popular culture and a smaller pool of successful artists.
As for the issue of government’s role in the dispute, it comes down to one’s ideology of the role government should have in regulating business in general. As a supporter of a more laissez-faire government, I think in this situation, the negotiations should between the recording industry and broadcasters.
Perhaps my ignorance of the complex business models of the recording and broadcast industries and their relationship to one another is limiting my view, but it seems to me that the demands of the recording industry are motivated by greed. The recording industry and musicians already have a myriad of money-making opportunities. The government should be an advocate for what is in the best interest of the general public. Legislators who support the Performance Rights Act seem to be perpetuating the growth of the recording industry and imposing upon the ability of broadcasters to provide a valuable public service.
Ultimately, if radio stations have to pay to play, broadcasters, the public, and many individual artists will lose the game.
I actually did a debate on the Performance Rights Act last semester...I think another important issue is broadcaster diversity. A lot of minority-owned and smaller (like those at colleges) radio stations are against this legislation because if they are unable to afford the new fees, their closing would obviously result in less diversity of ownership. But just a note about the Local Radio Freedom Act...it's not legislating future action as reinforcing radio stations' current exemption from paying for performance rights (because they already do not pay).
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