The Radio Performance Tax — Just Say No

Who makes money off of classical music radio, or any music radio, for that matter? Is it the artists? The stations? The record companies?

If classical music radio were profitable, there would be a lot more stations doing it. That’s why it makes no sense at all for the Recording Industry of America (RIAA) to try to levy a Radio Performance Tax on stations. For the past 50 years or more, record companies have been sending free recordings to stations and begging for airplay. The money the companies made off all that free airplay was pure profit.

After making money off the stations for all those years, now the record companies have become ingrates and want to charge the stations. They are saying that the radio stations are getting their products for free and making money off them, and they ought to pay for the privilege. Virtually all of the record companies still standing are overseas, so any tax money earned would immediately leave the country.

It won’t succeed — this time. Congress isn’t going to allow it. As of last week, a majority in the House and about 13 senators have opposed the effort. You can read about it here. Here’s the other side of the argument in Wired.

Who benefits from the free airplay, which is the foundation of all music stations? Everybody does. The artists sell records and get their music out there. The record companies rake in the lion’s share off the top for every record they sell. But the stations have never taken in money from airplay. Their income is nearly all from advertising and underwriting. You could make the case that they are able to sell advertising because they play music by those artists, but it doesn’t matter what they play. News or music — it’s all the same to the advertisers. In the public radio world the stations barely make enough to keep alive.

The Bush administration supports the so-called Performance Rights Act, but fortunately wiser heads are prevailing and opposing it. If you want to register your opinion with your local lawmakers, the people opposing this disastrous tax are sponsoring a bill called the Local Radio Freedom Act (S. Con. Res. 82).

I recommend Jerry del Colliano’s post on the subject in his blog Inside Music Media.

If the RIAA ever succeeds and gets its tax, it will be the end of terrestrial music radio as we know it. Instead, the artists and the record companies should be on their knees thanking us for all the free airplay we give them.

I’ve mentioned before that the issue of broadcast royalties is what has kept American orchestras off the air for several years. The players want lots of airplay so they can sell their CDs or downloads, but they also want to be paid every time we play their music. Now the record companies want to be paid, too. The money isn’t there, folks. It’s like trying to get blood out of a turnip. Stations will just turn off the music, rather than pay for it.

I am 100% for musicians getting fair wages and benefits. I’m just not convinced that they should get them from airplay on radio, where they’re already getting an enormous benefit at no cost to them. In fact, maybe they should pay the radio stations for all the marketing they’ve been getting free up till now.

Or maybe we could call a truce. The music is provided to the stations free. The stations give it free airplay. And everybody wins.