Friday, May 8, 2009

Major labels and the broadcast radio industry used to be a cozy caravan.

Labels sent radio stations their music (along with, on occasion, illegal payments to disc jockeys — but that’s another story).

Radio stations played it on the air.

The magic of “promotion” occurred.

They were the perfect travel companions.

But now they’re snowbound in a formidable, jagged, pirate-infested mountain range known as the Sierra Interneta. Making short-term matters worse, the economy is horrid. Labels are going broke and are desperate for new sources of revenue. Radio is losing listeners to video consoles and portable electronic devices.

This Donner Party-like scenario is brought into sharp relief by the Performance Rights Act (PRA), presently inching its way through Congress. It would require radio stations to pay a share of advertising dollars to labels and performers — a long-sought goal of musicians that dates to the swing era, when popular big-band leaders and the “Chairman” himself, Frank Sinatra, railed at their royalty-less end of the bargain.

Under current copyright law, terrestrial broadcasters pay about $550 million annually to songwriters and publishers through organizations like BMI and ASCAP — but the recordings themselves are aired license-free.

The labels have a sympathetic proxy to make their case: musicians and singers who have performed hit songs they didn’t write, and who aren’t otherwise well-remunerated superstars, such as the late Mr. Sinatra or whoever the latest American Idol is.

Why musicians should be twinned with labels — not always the most simpatico of bedfellows — in this debate isn’t necessarily obvious.

John Simpson, an ex-artist manager who heads the performance-rights nonprofit SoundExchange, part of 13-member coalition that includes the Recording Industry Association of America and the National Academy of Recording Arts and Sciences, explains that the bill would benefit all “rights-holders,” including labels, which often own copyrights to master recordings.

“As much as we may hate each other, we love each other on this issue,” Mr. Simpson says of the artist-label alliance.

A recent Associated Press report on the effort led with the tale of Jack Ely, the lead singer of “Louie Louie” hit makers the Kingsmen. He got a $5,000 check and says he never made another dime from the song.

His is perhaps a sui generis example: The three-chord progression of “Louie Louie” is about as generic as you can possibly get in a rock composition. Mr. Ely’s famously garbled delivery of Richard Berry’s lyrics was far from incidental to the success of the song — indeed, it is the song.

But how do you equitably apportion payments to nonsingers who make comparably important contributions to popular songs? Under the PRA as it’s currently drafted, 50 percent of the proposed fee would go to labels; 45 percent to “featured performers”; and the remaining 5 percent to backup singers and musicians.

Such a payout scheme would be highly confusing in the case of, say, the Allman Brothers’ instrumental hit “Jessica.” Chuck Leavell, the veteran keyboardist who performed on the track, agrees that it’s a “very nebulous” concept.

But would he like to see some income any time the Black Crowes’ version of “Hard to Handle” or Train’s “Drops of Jupiter” or the Rolling Stones’ “Mixed Emotions” is played on U.S. radio? You bet. (He already receives income as a performer — “not an earth-shattering amount,” he informs — from Europe’s royalties system.)

To him, it’s a simple fairness issue: Many working musicians aren’t rich and famous; they’re professionals who ply a craft and need to get paid for it. With the record business in tatters, he says radio needs to “help bear the burden of what it costs to make these recordings.”

Other prominent performing artists have come out in favor of the bill, too, including Eagles frontman Don Henley and Smashing Pumpkins singer Billy Corgan, who appeared before Congress in March to tout it.

The National Association of Broadcasters, meanwhile, sees the PRA as a boot poised above its throat. It has taken out ads in print and on radio calling the proposal a “performance tax” — a rupture of a decades-old federal policy that views free commercial airplay as a promotional asset for both labels and recording artists.

NAB spokesman Dennis Wharton says the bill could devastate the terrestrial radio industry. If it becomes law, Mr. Wharton says, many stations would either go out of business or switch to a talk format — and where will that leave starving musicians?

“It’s not our fault that the record label business is in a world of hurt,” Mr. Wharton says.

Advocates of the bill point out it requires terrestrial stations to pay the same fees that satellite and Internet stations already do.

Then again, Web-based radio outfits like Pandora would be the first to tell you that such requirements are crushingly onerous.

But, as Mr. Simpson says, why shouldn’t radio stations pay for their content? Television networks don’t get syndicated programming without paying for it — why are their commercial radio sisters treated differently? Does the terrestrial broadcasters’ exemption from performance royalties feel natural simply because that’s the way it’s been for so long? Isn’t it a bit peculiar, Mr. Simpson asks, that a lack of performance rights puts America out of step with other modern capitalist democracies and in the ominous company of countries like China, North Korea and Iran?

And yet, the very technological landscape that has made the PRA such an urgent priority for labels — one in which monetizing access to music, not simply selling it, has become paramount — means that enactment would be, at best, a rear-guard action.

Picture a youthful, self-enclosed iPod user who has perhaps stolen half of his collection, or an older satellite-radio subscriber who no longer feels the need to buy CDs, and you see the source of the famine.

Such sovereign consumers, at once instantly accessible and stubbornly unreachable, have turned two once-mighty institutions into scavengers.

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