Opinion: Tax on radio would enrich labels at communities' expenseNel frattempo nel Parlamento americano sta avanzando la legge che prevede la possibilità per le stazioni radio in streaming via Web di negoziare royalties più convenienti con i titolari dei diritti musicali. Potrebbe essere solo una soluzione temporanea ai problemi di un settore che non deve solo raggiungere un obiettivo di contenimento dei costi, bensì anche riuscire a consolidare le proprie fonti di guadagno convincendo gli inserzionisti pubblicitari a investire in questo nuovo mezzo. Sembra che da parte dell'associazione delle radio via etere, non ci siano più pregiudiziali alla stesura di accordi di questo tipo, inizialmente osteggiati per il timore di possibili effetti di disparità tra radio convenzionale e radio via Internet. Ecco il commento di Alley Insider.
By Dave Pugh
Special to the Mercury News
Article Launched: 09/29/2008
The record labels don't want you to know about the theft they are trying to commit in Washington, D.C., which could deal a $3 billion to $7 billion blow to communities across America.
The record labels, hiding behind the performing artists they continue to exploit, are pushing Congress for a new tax on radio.
In addition to the royalties my stations and stations nationwide are already paying to both the songwriters and publishers of music and to the artists/labels for the ability to stream a station's signal over the Internet, the labels want to get paid for any music we play over free, local radio. Yet 50 percent of the proposed tax would go directly to the record labels, while less than half to the primary performing artist.
Radio stations like mine give artists and their labels billions of dollars of free promotion over the airwaves, helping to make a career for many artists by making them a household name and helping to drive both concert and music sales. Just watch the Grammys or other music awards, and you will see many big name artists thank radio for their success.
In spite of this, the labels want more. In these tight economic times, radio stations are facing declining revenue and feeling the pinch. Telling stations like mine that we need to find millions of dollars — that don't exist in our budgets — means cuts have to happen somewhere.
Job cuts: All across the country, radio stations employ more than 124,000 people to the tune of $6 billion dollars in annual payroll — the price tag of the performance tax. Right here in California, that means 13,645 people and $824 million in payroll that comes back to the community. Stations could be forced to cut benefits or to lay people off.
Public service: The Federal Communications Commission established bare minimum requirements for public service; however, most radio stations go above and beyond the call of duty. In California alone, broadcasters donated more than $1 billion in airtime for PSAs, fundraising drives and charitable contributions. Radio is there for the community in times of need. If the tax passed, stations could be forced to the bare minimum, crippling many non-profit organizations that rely heavily on radio to help them operate.
Diversity in programming and ownership: To avoid the hefty cost, many stations may resort to talk-only formats, limiting exposure to new music and upcoming artists, ultimately hurting the artists and the labels. Smaller stations broadcasting to Hispanic and other ethnic minorities could be forced out of business. Boosting the cost of operating local radio stations could also reduce the number of stations owned by women and people of color at a time when the FCC and broadcasters are trying to increase diversity in ownership.
Radio stations like mine serve as cornerstones of the community. We are here for you in times of crisis during hurricanes, fires, earthquakes and tornadoes, and in better times to entertain and inform you as you go through your day. Now we need you to be here for us: Call members of Congress and urge them to oppose S. 2500 and H.R. 4789 and any performance tax on local radio.
Radio belongs to you; keep it that way.
Dave Pugh is the market manager for Clear Channel San Francisco/San Jose, whose stations include KFOX 98.5 and KSJO 92.3, and a member of the Free Radio Alliance.
Web Radio Darling Pandora Breathes Easier, For Now
Peter Kafka | September 28, 2008
Who says our elected officials can't get anything done? In addition to hammering out a $700 billion Wall Street bailout deal over the weekend, lawmakers extended a lifeline to Internet radio companies like Pandora, who are trying to lower the fees they're supposed to pay for streaming music rights.
Last night the House passed a bill that essentially gives Pandora and other Webcasters the ability to negotiate with the music business over royalty rates (see press release below). It's expected to clear the Senate in the next few days. Webcasters, led by Pandora's Tim Westergren, have warned that if the bill didn't pass, many of them would end up pulling the plug.
But the bill itself doesn't ensure that Internet radio will survive. Assuming it goes forward, it will simply give Webcasters the ability to continue haggling with the music industry over "performance royalties" -- the fees they're required to music owners each they stream a song. Tim and other Webcasters won't actually tell us what they're willing to pay, except that it's less than what Congress signed off on last year.
And the Internet radio business also has to resolve something that can't get fixed in Washington: How to generate real revenue from their services, since advertisers have so far shied away. If that doesn't happen, it won't matter what how much Internet radio pays the music business: The costs are always going to exceed the revenues.
UPDATE: We're stuck in 2005, says Tim. His full response:
We're going to generate over $20M of revenue in just our 3rd year. I think it's fair to say that we're rapidly solving the monetization issue. Advertisers love the medium, it just takes some time
to break through when you're still growing your comscore numbers.
Webcasters and Recording Industry Welcome
Passage of H.R. 7084
Bill Would Enable Implementation of Negotiated Agreements
Washington, DC – The House of Representatives last night approved by voice vote must-pass legislation that would benefit all webcasters -- large, small, non-commercial and simulcasters. The Digital Media Association (DiMA), SoundExchange, National Public Radio (NPR) and the Recording Industry Association of America (RIAA) all applauded the swift action taken by the House. It now moves to the Senate where supporters are hoping for quick passage.
The legislation (H.R. 7084) sponsored by Reps. Inslee, Berman, Smith, Conyers and Manzullo authorizes SoundExchange, on behalf of copyright owners and performers, to negotiate new royalty agreements for Internet radio through February 15, 2009 with Digital Media Association (DiMA), National Public Radio (NPR) and any other Internet radio service. It will benefit all webcasters, including broadcast simulcasters. This modification to existing law was introduced because Congress will be out of session as discussions between the parties continue, and it enables implementation of an agreement in the event the parties can reach an accord.
“Everyone is grateful to the sponsors of the bill and to Chairman Berman for getting this through the House last night,” said John Simson, Executive Director of SoundExchange. “This bill favors all webcasters and simulcasters – large and small. It paves the way for SoundExchange to use the coming months to pursue helpful solutions that allow all services to focus on business development. And, although there are no agreements yet, I am hopeful.”
Jonathan Potter, Executive Director of DiMA was also encouraged. “This is an important step. Hopefully the Senate will follow suit and we can return, energized, to negotiations.”
“This legislation benefits all music webcasters and excludes none," said Michael Riksen, NPR VP of Policy & Representation. “Passage will facilitate closure of an agreement to enable all public radio stations to continue their public service through the webcasting of music.”
Nothing in this bill affects the scope of sound recording performance rights or any underlying copyright law.
Supporters are hopeful the Senate will take up the bill prior to adjournment and it will be sent to President Bush for his signature. The parties expect negotiations to resume upon enactment of the bill.