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It’s Long Past Time for Big Radio to Pay Artists, Producers and Labels (Guest Column)

In a situation unique to the United States among the world’s major countries, terrestrial radio stations have never paid royalties to record labels, artists and producers, although they do to songwriters and music publishers. A2IM CEO Richard James Burgess, formerly a music producer and head of Smithsonian Folkways Records, weighs in on that situation below. Variety welcomes respectful commentary. 

I was glued to the radio as a kid and, later, I was beyond excited when I first heard my own records blasting out over the airwaves. But this was in the UK and New Zealand where radio pays musicians, artists, producers, and labels for every play.

Radio launched in 1920 in the U.S. and has assiduously avoided paying a single penny for the recorded-work of the musicians, artists, producers, and record labels whose music it uses to generate nearly $11 billion of its approximately $18 billion annual revenue. It is a bitter truth that the recorded-music industry earns significantly less than $11 billion annually for creating and financing the making of these recordings. That radio does not pay exacerbates the harshness of this reality.

Radio rigorously tests our music to ensure it will attract advertisers. There is a direct causal relationship between the music radio plays and the revenue it earns from advertising. Yet radio keeps every cent. Radio, effectively, rents out artists’ and labels’ property for its gain, without sharing any of the revenue generated with the creators.

The lobbying power of Big Radio has defeated more than twenty-five bills presented to Congress since 1926. As far back as 1932, US Representative William I. Sirovich (R-NY) remonstrated against, “[The absence of] protection to the author and manufacturer who puts his talents or his money into the [sound recording], without getting any compensation from the others who are using it for commercial gain.” Persistently haunting words.

The musicFIRST coalition (A2IM, AFM, Recording Academy, Sag-AFTRA, SoundExchange, RIAA), has been in negotiations with the NAB (National Association of Broadcasters) under House Judiciary Committee Chairman Goodlatte’s guidance. The objective was a consensus agreement, which the Chairman would enshrine in legislation. Legislation is essential to ensure that artists, musicians, singers, producers, and labels are not only paid for U.S. airplay but also from spins in the rest of the world. It is estimated that these U.S. creators and the U.S. economy are losing hundreds of millions of foreign-trade dollars each year because the NAB has so effectively blocked this legislation.  If such a law should pass, the U.S. would no longer be aligned with countries like North Korea, China, and Iran in suffering a radio industry that doesn’t compensate creators.

Sadly, NAB CEO, Gordon Smith, telegraphed radio’s true intentions on April 9 when he cited “Five Big Wins,” with number three being, “We again fought back attempts by the record labels to tax radio stations simply for promoting and playing the music listeners love to hear.”  In the same speech he boasted, “And, most recently, broadcasters were instrumental in securing $1 billion in legislation passed by Congress to reimburse radio and television stations for their costs during the spectrum repacking process, ensuring viewers and listeners don’t lose access to their stations.”

I find it fascinating that Smith has the gall to refer to a small royalty for the use of our music as a tax (a tax is paid to the government, not to property owners, for the use of their property). Then, in the next breath, he bragged about extracting a billion dollars from our government for the radio industry.

Music on the radio has enriched listeners’ lives and built empires for some radio station owners. We call on Congress to ensure that U.S. music artists and their funders are finally paid their fair share. Let us not enter a second “Century of Shame.”

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