Performance tax on music broadcasting

[skysidhe]

http://www.noperformancetax.org/issue.asp

http://www.noperformancetax.org/newsroom.asp


I've seen this around for the last week. Mainly because my favorite radio station is my homepage.

I think it is worthwhile mentioning. I don't think anyone wants this to happen.

What is a performance tax?
A performance tax is a fee that record labels want the government to impose on local radio stations simply for airing music free of charge for listeners.

In recent years, the record labels have seen sales of albums decline as more listeners opt for digital downloads. However, radio remains the number one promotional vehicle for music – it’s not responsible for the label’s resistance to the digital age, and it shouldn’t be on the hook to fix it. Radio already provides between $1.5 to $2.4 billion dollars annually in music sales for artists and record labels. By pushing a tax on local radio, record labels are biting the hand that feeds them.

Where does the money go?
In short, the money would flow out of your community and into the pockets of the record labels – the great majority of which are foreign-owned. The record labels would like for you to think this is all about compensating the artists, but in truth the record labels would get at least 50% of the proceeds from a tax on local radio.

[Undertoad]

These bills are confusing and I don't think they say what the NAB says they say.

It seems like they are actually promoting the idea that performers get paid as well as songwriters/publishers. I'm in favor of that.

Currently, for example, if my old company Mediaguide determines that Whitney Houston's "I Will Always Love You" is played on the radio, it reports that to ASCAP, the American Society for Composers and Publishers; and Dolly Parton, who wrote the song and retains publisher's credit, gets a big fat check.

Whitney doesn't get a big fat check, which is good because she would spend it on crack, but nevertheless she *should* get a portion of the royalties because she performed the song and its success is largely due to her talent.

[smoothmoniker]

That link is so crufty that I almost can't stand to read it. It's jingoist (them FOREIGN peoples are taking our money!), populist in the worst way (those record company fat cats already make enough money!) and it is filled with red hearings (the money won't go to artists, it will go to record companies - well who the hell do they think paid for those recording sessions in the first place! The record companies that the starving artists SIGNED A CONTRACT WITH!), and full of misdirection (local radio? there is no local radio).

Uggh

I'm not in favor of a tax on radio stations - anything that runs through DC is a bad idea.

I AM in favor of a statutory license paid to performers for the use of their music on radio stations. Currently, performers are not compensated in any way when their work is played on radio, only songwriters.

I know your mind immediately goes to the big top 40 names, and the response is, "Who cares! They make their money from touring and album sales, and all good artists write their own music anyway." Consider for a minute how this really works, though.

A classical musician records a brilliant interpretation of a Beethoven piano sonata. Because the song is in the public domain, the radio station doesn't have to pay a songwriter. Because the performer has no rights over the broadcast of their own recording, the station doesn't have to compensate them, either. The radio station gets to distribute a product without compensating the person who produced that product.

The purpose of the exemption (and it is an EXEMPTION to the copyright law, not standard practice) was to lower the cost for new radio stations to begin broadcasting, back when radio was a new technology. Congress decided that the public was better served by sheltering the fledgling new technology from some of the costs of doing business, in order to help it become better established.

Well, radio is established. The experiment worked. Does it really need the continued protection of congress to subsidize the cost of doing business at the expense of the musicians who create the product it distributes?

Take a look at the organization behind this - it's an industry lobby group, the same lobbying group that tried to block satellite radio, has sued to block the approval of low-powered FM devices, and lobbied strongly against the release of "white spaces" in the bandwidth for wireless broadband and other new uses. It's a protectionist group, not some sort of local groundswell advocacy group.

Uggggh. The NAB. Put them right up there with the RIAA. They both suck.

[skysidhe]

I'm confused by this too. I know very little about all the different angles and motivations so I appreciate reading other's thoughts on the matter.

[SteveDallas]

Originally Posted by smoothmoniker

I AM in favor of a statutory license paid to performers for the use of their music on radio stations. Currently, performers are not compensated in any way when their work is played on radio

I don't disagree... but how do you see this working? Would you imagine some kind of ASCAP/BMI clearinghouse for the performers? What about performers who did the recording as straight work for hire? For that matter what about the engineers etc.? How is this different (or should it be?) from the software industry--the coders who wrote Office 2007 don't get residuals on it.

Maybe the NAB and the RIAA will sue each other out of existence . . .

[smoothmoniker]

One of two ways, either a statutory license (similar to how mechanical recording licenses work for cover songs) or a performance rights organization like ASCAP.

The license money would function just like every other cent that flows through in the industry. It can be contracted for ahead of time (work for hire), it can be negotiated for by representative unions (like the SAG residuals), or it can just be kept by the people who funded the recording.

I expect that the end result would be a combination of the above. The musicians will probably negotiate special payments based on radio popularity (similar to the special payments we receive if an album sales hit certain targets), rather than a straight percentage. Most of the money will go to recoup recording and marketing costs, so that would be the record label.

The person who codes Office 2007 does have the right to residuals for every line of code she creates. The only reason she doesn't get a check is that she traded in all of that money ahead of time in return for a salary (as you said, work for hire).