Critically valuable piece from Billboard May 7 edition regarding Fair Play proposed legislation. It also mentions MMF-US role in the Music First Coalition, spearheading this initiative.
Thanks – Barry Bergman (MMF US Board President)
Steve Garvan (IMMF , MMF US Board ,US International rep )
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It’s just like old times. In a skirmish nearly a century old, the broadcast radio and recording industries are squaring off once again, over master recording performance rights.
MusicFIRST — the coalition that includes the RIAA, the Recording Academy, the American Assn. of Independent Music, SAG-AFTRA, Sound Exchange, American Federation of Musicians, the Christian Music Trade Assn., the Rhythm & Blues Foundation, the Music Managers Forum-U.S., the Latin Recording Academy, the Society of Singers and the Vocal Group — launched the first shot in this oft-revisited war when it held a press conference on April 13 at SAG-AFTRA headquarters to introduce the Fair Play, Fair Pay Act. Representatives of all of the above organizations, as well as high-profile artists like Martha Reeves, Cyndi Lauper and Elvis Costello, came out to make their case for radio to pay royalties on performance masters.
Some background: When a song is played on radio in the U.S., songwriters and publishers receive a royalty — the U.S. radio industry pays them nearly $400 million a year — but the recording artists and labels receive nothing. The recording industry, record labels and their artists, believe they deserve to be paid when their music is played on the radio — like they are in virtually every other country in the world (except China, North Korea and Iraq). The U.S. radio industry sees payment demands as a betrayal, claiming that the free promotion the industry provides has driven the economic model of the music industry for more than 60 years.
“They are talking about hundreds of million of dollars in punitive fees, which could do serious economic harm to radio’s business model,” says National Assn. of Broadcasting vp of communication Dennis Wharton. He wonders why the record industry would want to impose such royalty payments on radio when “we view ourselves as the best friends artists can have. Look around the globe. We have the most successful music and radio industries in the world because of that relationship.”
We can look to the U.K. for a reasonable comparison of how much the new royalty could generate in the U.S. Across the pond — where commercial radio competes alongside the government’s own BBC — music licensors, including commercial terrestrial radio, pay anywhere from two to five percent of their advertising revenue to labels and artists, according to the PPL, the organization responsible for public performance royalties in that country. Sources say that the two to five percent range is a common rate worldwide. As well, the lack of AM/FM performance right stateside means $100 million in annual royalties is left overseas, withheld because the U.S. music industry is unable to reciprocate. (On April 29, the US Register of Copyrights Maria Pallante endorsed the legislation, on this point specifically.)
If the Fair Play, Fair Pay Act were to become law, and if the rate was set at two percent of radio advertising revenue — where the terrestrial commercial radio industry generated an estimated $16 billion last year — we arrive at a countrywide payout of about $320 million, $80 million less than the estimated $400 million songwriters and publishers collect from U.S. radio currently.
Read the rest of the article at:
http://www.billboard.com/biz/articles/news/radio/6560792/is-the-long-war-between-american-radio-and-the-record-business-about
By Ed Christman