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Performance Tax threatens radio stations | Arts and Entertainment
 

Home > Blogs > Arts and Entertainment > Archives > 2009 > May > 15 > Entry

Performance Tax threatens radio stations

Buried in the rubble of more high-profile congressional legislation such as H.R.1 — the American Recovery and Reinvestment Act — and H.R. 15 — the National Health Insurance Act — is bill H.R.848, The Performance Rights Tax.

If passed it will result in a quantum shift in the eighty year-old relationship between the recording industry and commercial radio.

A performance tax is a fee that record labels want the government to impose on local radio stations for airing music free of charge for listeners. Critics argue that niche and minority stations, such as Dayton’s WDAO will fold if the bill is approved by congress.

“We can’t afford additional expenses,” said WDAO owner Jim Johnson. “Especially the way the economy is now. Passage of this bill also hurts up and coming artists. Radio stations will limit the number of new artists they promote in favor of the established artists with a successful track record.”

New Orleans radio DJ and music promoter George Williams said the Performance Tax has the potential to cause harm to smaller and independent radio stations.

“It’s no secret that the Recording Industry Association of America (RIAA) is on the warpath against radio, the medium that has driven more sales for them than any other,” Williams said. “After more than eight decades of radio promoting music for free, the RIAA is seeking to enhance their diminishing bottom line by creating a new revenue stream in a way that will injure radio, particularly minority and niche stations.”

In recent years, the record labels have seen sales of CD’s decline as more listeners opt for digital downloads. However, radio remains the number one promotional vehicle for music.

The National Association of Broadcasters (NAB) estimates that radio already provides up to $2.4 billion annually in music sales for artists and record labels. Critics claim that by pushing a tax on local radio, record labels are biting the hand that feeds them.

“If this bill passes it means another expense which takes away from our bottom line,” said WDAO’s Johnson. “That’s something we don’t need.”

Permalink | Comments (49) | Post your comment | Categories: Radio

Comments

By Publicus

May 15, 2009 11:48 AM | Link to this

Internet radio stations (like Cincinnati’s great woxy.com) have been paying these fees for years and they make much less money that broadcast stations. I don’t know why broadcast radio should be excluded.

By Pete

May 15, 2009 12:19 PM | Link to this

Since the fees haven’t been enacted yet, it’s not possible that anyone has paid them before. Yes, internet and radio broadcastors have been paying broadcast rights fees for years. (Radio was not exempt.) The fees that Internet stations pay, though, is less than what radio stations pay. These will be additional fees added to those.

By Anon

May 15, 2009 12:41 PM | Link to this

Their sales are going to pitfall. How are people supposed to know if they like a new artist or album if they can’t hear it first? In this country we like to try things out before we buy. Radio stations help us do that with music. It’s not like we are recording what we are hearing in the car.

By Tom

May 15, 2009 3:43 PM | Link to this

I agree with Anon, I wouldn’t know which albums to love or concerts to attend if not for radio. This sounds like a plot of Conservative radio to change formats to all-talk ( just kidding Rush and Sean ). Anyway, be careful for what you wish for because I agree it will not be the windfall record companies are hoping for.

By BiggunSH

May 15, 2009 4:20 PM | Link to this

Taxing radio? Why not tax broadcast TV stations like WHIO or WDTN? Don’t they air copyrighted material for free? Besides, don’t the radio stations pay into BMI and ASCAP (organizations that protect copyrighted material) which in turn pays the artists for the use of their material?

By elw

May 15, 2009 4:31 PM | Link to this

It’s not so much for the main performer. It’s for the benefit of the studio musicians who played on the recorded song that the radio station chooses to play. I think it’s a load of crap. Radio stations are already strapped to the point they can’t pay a DJ but to make it so they can’t pay for the music is just wrong. Look for a surge in MP3 sales. Radio will die if this passes.

By Casual Observer

May 15, 2009 4:32 PM | Link to this

Greed, Greed, and more Greed. Headlines should read “Who’s unabashed Greed are we discussing today?” Why dress it up and call it a tax. Call it what it is; Greed.

By Whomenoway

May 15, 2009 4:44 PM | Link to this

WDAO, out of business and who cares???????? Change Has Come to America. Hey you WDAO mothers voted foe change now you will have to pay and pay and pay and…

By rrhoop5469

May 15, 2009 4:59 PM | Link to this

Not that I hope anyone loses a job but if this passes, see how many radio stations shut down and see how fast record labels lose money. They are biting the hand that feeds them. WAAAY back in the day, there were some artists who paid the radio stations to play their music. Look how times have changed! Nothing but greed. Have they learned nothing by this recession?!

By Ray

May 15, 2009 5:00 PM | Link to this

Why aren’t the radio stations charging the artist to promote their music. The market is so overstatured with artists who can’t sing and couldn’t perform to save their lives. But, get pushed by music execs, just to make a buck.

By Joe

May 15, 2009 5:40 PM | Link to this

The Recording Industry Association of America is a bunch of morons.

By josh

May 15, 2009 5:44 PM | Link to this

The RIAA is destroying the music industry. The Internet has fundamentally changed music distribution and instead of urging the industry to adapt, they chose to sue their own customers. Now they are struggling for relevancy. Add to that the fact that music released today is mostly garbage and you have a great argument for artists to publish their own music via the net.

By MusicLover

May 15, 2009 6:36 PM | Link to this

If this happens, most of the local stations here will be at risk of going off the air. We will have nothing to a already dead city and dead area.

By ASCAP

May 15, 2009 9:36 PM | Link to this

Biggun, I believe you have it backward. TV stations have to pay rights fees to air music, while radio stations do not. Ever notice that most LOCALLY produced TV DOES NOT use music you’ve ever heard before? Usually, they have canned production music that takes its place. It’s too expensive to use popular music. I do think this is a bad idea, though.

By Ohio Bob

May 15, 2009 9:54 PM | Link to this

BigguSH nailed it - Radio staions pay “mechanicals” to ASCAP every time they play a copyrighted song. This is redundant - and perhaps fatal - to the radio industry.

By Factoid

May 15, 2009 10:13 PM | Link to this

BMI and ASCAP collect fees for songwriters, composers & music publishers. The performers get NOTHING! This legislation is an attempt to restore fairness. If it passes, BMI & ASCAP will lower their fees or stations will go out of business. I’m guessing BMI & ASCAP will take the hit.

By yougotit

May 16, 2009 12:44 AM | Link to this

change you can believe in!

By radio sucks

May 16, 2009 1:18 AM | Link to this

i would feel sad about this but since late 80’s radion has gone to s—t.they play the same songs 10 every hour.across the board every format.so whats the problem your only going to end up paying 10 to 15 no talent a-holes.if radio wanted to survive(black radio)and other small companies should quit being greedy and band together to make a large company or get bought out by a big company.the bottom line is that radio sucks they play more commercials than music anyway and like i said before the same ten songs every hour.the good artist never get air play but the cookie cutter bulls—t gets crammed down your throat.rip radio you’ve been around 20yrs to long!!!HELLO SATELLITE AND INTERNET LESS COMMERCIALS,LESS TALK AND NO BULLS—T!!

By Andy

May 16, 2009 1:18 AM | Link to this

I’ve got a feeling that this is going to hurt the labels even more than they have hurt themselves thus far with suing consumers for downloading music. I don’t think the current music business models has anymore than 10 years in their current form.

By WHO LISTENS TO RADIO ANYWAY

May 16, 2009 1:32 AM | Link to this

R.I.P RADIO YOUR FINALLY GETTING WHAT YOU DESERVE.THIS IS WHAT HAPPENS WHEN YOU DON’T HAVE ANY VARIETY.MAYBE THIS WILL STOP THE OVER PLAYING OF CRAPPY SONGS AND FORCE YOU RE-INVENT YOUR STATIONS INTO SOMETHING THAT PEOPLE WITH BRAINS WANT TO LISTEN TO.STOP CATERING TO THE MINDLESS.

By Martin Machowsky

May 16, 2009 11:35 AM | Link to this

How many readers know that AM and FM radio stations earn billions in ad revenue without compensating the artists and musicians who bring music to life and listeners ears to the radio dial? Or that the US is the only developed country that does have a radio performance right? Or that every other radio platform, including satellite radio, internet radio and even cable TV music stations, compensate artists and musicians? Or that the US is in the company of nations like Iran, North Korea and China in not providing a performance right on radio? To learn more about the isssue, readers can visit www.musicfirstcoalition.org. Marty musicFIRST Coalition

By Cathy Rought

May 18, 2009 10:27 AM | Link to this

MusicFIRST comments are shortsighted. Radio does compensate its artists; Songwriters are compensated through royalties, as they don’t have the income potential of a performer through touring, sales, etc. And the FREE airplay given to performers and the labels helps to generate billions in physical and digital music sales. Royalties that have been passed in other countries are essentially subsidized by the government of that country. American radio receives no such subsidy. And in other counties, when a performance tax has been passed for radio it has also been passed for bars, restaurants, hospitals – anywhere that plays music. The Register of Copyrights has made it clear that she would like to see the same here. The largest chunk of the proposed tax would subsidize the record labels (three out of four based outside the country)/RIAA and SoundExchange. Freeradioalliance.org has a lot of good info available and the latest news.

By dave

May 18, 2009 3:23 PM | Link to this

Radio stations should start billing record labels or refuse to play their songs. Oh wait…, the government made it illegal for a radio station to take money from a label or promoter to play songs. Everyone recognized that people buy albums and attend concerts based on what they liked after hearing it on the radio. Radio is what drove the music industry and they didn’t want the labels in the driver’s seat. Sounds like the labels are taking the wheel.

By Stan

May 22, 2009 8:48 AM | Link to this

Radio is part of the media who endorsed these wacko left wing politicians in the first place. We were repeatedly told by the media “Spreading the wealth” was the right thing to do.. In fact “it is Patriotic”. When Radio is asked to pony up and pay their fair share to help the unfortunate, the concept isn’t as “cool” anymore.

By EARL

May 28, 2009 2:20 AM | Link to this

I FEEL WE AS RADIO STATIO OWNERS ALREADY PAY ENOUGH AS IT IS TO THE MUSIC COMPANIES LIKE BMI& ASCAP &OTHERS MUSIC COMPANIES JUST TO PAY MUSIC WHY NOT TAX THEM TAXING THE PEOPLE YOU ASK TO BROADCAST FREELY IS NOT WISE ITS JUST WRONG.

By EARL

May 28, 2009 2:23 AM | Link to this

I FEEL WE AS RADIO STATION OWNERS ALREADY PAY ENOUGH AS IT IS TO THE MUSIC COMPANIES LIKE BMI & ASCAP & OTHERS MUSIC COMPANIES JUST TO PLAY MUSIC WHY NOT TAX THEM. TAXING THE PEOPLE YOU ASK TO BROADCAST FREELY IS NOT WISE ITS JUST WRONG.

By Rightwing Kook

May 28, 2009 8:07 PM | Link to this

The best solution for this is for all radio stations to just stop playing music - period. Then tell the record companies to stick it! And while you’re at it, tell the idiots in Washington to stick it as well! Like they’ve got nothing better to do than worry about whether or not a singer gets a few pennies off a song played on the radio. Where would they be if no music at all was played on the radio? They would be UNKNOWN!

By BigJohnSmall

May 29, 2009 10:25 AM | Link to this

I have an idea!! Why not take a day off! A day with no music. What if radio stations… ALL radio stations across america took a day off and played NO MUSIC for 24 hours or even for a WHOLE weekend?? Would that be GOOD or BAD? I’ll get to work on some content to fill all that time (he he)

By BigJohnSmall

May 29, 2009 10:25 AM | Link to this

I have an idea!! Why not take a day off! A day with no music. What if radio stations… ALL radio stations across america took a day off and played NO MUSIC for 24 hours or even for a WHOLE weekend?? Would that be GOOD or BAD? I’ll get to work on some content to fill all that time (he he)

By judith

June 4, 2009 2:58 AM | Link to this

i am an independent artist and you can support me at www.judithonline.net, i have noticed lately that clearchannel here in savannah has devoted an hour to local artists on sunday, i wonder if it is because of the threat of this bill passing…i still remember submitting my first album to e93.1 fm and the program director telling me that it was “too green” her name was april dobbs, i was so hurt. I was once like you’ll and thought that the industry worked one way and then when I began to make albums, i found out it worked another…get educated America! Radio always gets worst seemingly under democrats, remember what bill clinton did for the cumulous broadcastings of the world. It will only get worst under obama if this bill passes…at least i think! I must do more research. -J

By Dave

June 18, 2009 4:51 PM | Link to this

There are a bunch of issues here. Yes, on-the-air radio stations pay songwriters (though ASCAP and BMI) and record companies, but not the performers. That’s unbalanced… the question is, is it wrong? In many countries, the radio stations are owned by the state. It’s also fairly common for radio stations to charge artists for airplay. Here, you can’t count on the public to keep a radio station alive, it’s ad-driven. And it’s illegal to pay labels. So the compromise was originally, no money in, no money out. I kind of wonder if this is another RIAA scheme to maintain control of what we here. This seems good for artists, but once we move to this model, might it not be also reasonable to allow payola — the radio stations can charge for airplay? That re-balances the original agreement, and mimics what goes on in some other countries. That COULD be a RIAA motive. They clearly have the goal of getting to you to listen to music in order to sell it, but most of the things the RIAA has been involved with, politically, in the last 50 years has been ultimately meant to raise the barriers for small artists. If you get a fee charged to played on the radio, only the big labels will be able to afford it — they’ll keep the little guys out forever. I don’t know the answer, but these things have rarely been about what they claim. The ultimate goal of going after internet radio a few years ago was precisely this — kill of much or all of internet radio, limit listners’ exposure to music that’s not On the Air.

By LeraJenkins

June 21, 2009 8:57 PM | Link to this

You were not mistaken

By FatherSaul

October 18, 2009 8:54 AM | Link to this

This link is a few months old, but I am going to go ahead and let my thoughts be known. The performance tax is completely irrelevant to me, since I am no longer a slave in the radio industry and no longer listen to commercial radio anyway. I have heard “Rescue Me” by Fontella Bass enough times to last me the rest of my life, and have worked for some of the sleaziest charlatan lifeforms that tried to pass themselves as “astute group owners.” Thanks to total deregulation, this industry — once one of the lower rungs of the show business ladder — is now as dynamic and entertaining as watching a weed grow out of a pile of sun-baked cow manure. I can program my own iPod to sound better than any consulted radio station on the dial … and that’s good enough for me.

By Vanny 1

October 21, 2009 8:58 PM | Link to this

The performance tax is a bunch of bullshit. Seen it on my Sirius bill last quarter, CONGRATULATIONS RIAA GOOD GOING U JUST COSTED SIRIUS A SUBSCRIBER DUE TO YOUR OWN GREED!!! SHUTTING THE RADIO OFF @ THE END OF OCT 09. AMERICANS ARE TIRED OF YOU AND THE REST OF THE RECORDING INDUSTRIES BULLSHIT!!!

By The_New_Bing_Crosby_of_2009

November 8, 2009 8:01 PM | Link to this

Look, terrestrial radio is in the dumper now. Ads are down and XM Sirius is the real way to get music (and talk radio with NPR as well). Why listen to terrestrial radio with the begathons for NPR stations when you can go to XM Sirius and not hear that begging? Pay the fees, terrestrials! Just like everybody else.

By Curtis

November 27, 2009 11:41 AM | Link to this

The fee that they are paying is a copyright fee to play the music. You usually buy a pakage then you have a ton of music you can play free of charge, but the record studios now want radio stations to pay a fee to them on top of that. that is what this is all about, and it sucks.

By Kathy

February 13, 2010 3:18 AM | Link to this

ASCAP & BMI collect fees for the songwriters & music publishers - not the performing artists. Radio play has never paid performers for playing their music - only the songwriters & publishers. Performers only make money from sales & concerts.

By clayton jeff jeffries

February 16, 2010 3:53 AM | Link to this

Radio—-The worm has turned. You forced Satellites and internet radio to pay fees 3X’s higher than those you currently pay. Now it’s pay back time.When you sell you stations for 50-100 MILLION and only pay 10-15 CENTS to the artists don’t look to me for consolation. That being said, since this isn’t going to the artist but those OTHER Robber Barons—-the record labels, I can’t say I’m for it but I can always hope comeuppance is on the way.

By e-ghost

February 16, 2010 3:33 PM | Link to this

I must be missing something here. Why is this being called a TAX? By definition, a tax is collected by a government entity for its own revenue stream. It sounds like the US government is going to do is collect the money, then hand it all over to artists, record companies, etc. How is that a tax? Having been involved in both broadcast and internet radio, I think this is a move to kill off internet radio, as it has been a thorn in the side of record companies and broadcast radio for several years now. e-ghost

By justathot

February 17, 2010 10:09 AM | Link to this

Ultimately, it’s about control of information. We’re seeing newspapers disappear at an alarming rate already. Local radio stations are having a hard time of it selling advertising already. We’ve had one small station disappear this year from our local airwaves and that leaves one other AM. The “people’s right to know” is being replaced by the “people’s right to know what we want them to know.” It isn’t just about the music, folks. This is just step one. Yes, another conspiracy.

By Don

February 18, 2010 9:17 AM | Link to this

Must agree with ubove comment. It’s a way for more government control by eliminating stations and gaining their infulence on the stations that are left. Big brother with take them over. They are already attacking conservitive and christian radio with a vengence. Read, pray,vote!

By Rob

February 21, 2010 12:09 PM | Link to this

Where were the broadcasters and the NAB when the RIAA shoved these fees on webcasters? My friend was a webcaster and ended up going out thanks to the Copyright Royalty Board extortion and regular radio said nothing to help them. I say let the tax roll and put all these overblown radio companys out of business! The RIAA is a nasty group slipping money to Congress to get their way. Until we get rid of graft and corruption in American government this will be status quo as usual.

By Mr. Biker

February 25, 2010 1:00 PM | Link to this

Regarding previous comments: The reason this is called a tax is because that term gets Americans pissed off. It’s not a tax it’s a fee, but radio stations advertise it that way to get you riled. READ, people and your brain will inform you. Second, “They are already attacking conservitive and christian radio with a vengence.” Wha???? The only thing left on the radio these days is “conservitive” (sic) and “christian” (sic) radio. I for one am sick of it, and I hope it dies a painful, expensive death. It probably won’t because it appeals to uneducated, uninformed listeners, which encompasses a large part of the American public. Most of what I hear on “conservitive and christian” stations is lies, along with uninformed, uneducated people, as evidenced by the faulty spelling, capitalization and logic they spew (there were three mistakes in that one sentence posted by one of them). Finally, if you pay attention, you can see there are two sides to this story. Although I hate fees, I’m starting to think that if they charge radio stations “fees” which is what they really are, maybe the radio stations will start to put unknown/undiscovered bands and performers on in an effort to not pay the fees.

By Sammy

February 25, 2010 4:35 PM | Link to this

I really think that this is bullshit. First they take away free tv and make us get converters(that we have to buy)now there trying to take away one of the few things that are actually free! Its all GREED!

By Jim

March 6, 2010 9:08 PM | Link to this

The point is that in most cases the songwriters ARE the performers. Thus this tax or fee or whatever is redundant and designed to enrich the RIAA, not the artists. The days of Tin Pan Alley are long gone.

By mungo

March 14, 2010 7:52 PM | Link to this

if all the DJs get fired to pay this fee that is fine by me. I want to hear music, not talking.

By Jes Sierra

May 4, 2010 5:54 PM | Link to this

Why not just play local bands and pay them for radio play. Local bands are at times much better than mainstream.

By Nostradamus

October 19, 2010 8:26 PM | Link to this

Sorry for off topic, but 2012 is close, is this really matter?

By Single Kontakt aus Dortmund

February 6, 2011 1:26 PM | Link to this

Those who know don’t speak. Those who speak don’t know.

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