NoPerformanceTax.com - Why Should Radio Be Different?

I go all sorts of places looking for good blog fodder - I have my Google Alerts, my favorite music business news sites (i.e. hypebot.com) and my favorite music biz/legal blogs (i.e. ipandentertainmentlaw.com, Copyrights & Campaigns, Ars Technica), etc. However, I must give credit where credit is due, and must admit that my parents give me amazing blog fodder. Any time a music business issue, article, story, etc. comes across their plates, I almost always get an email. So thanks, mom and dad. This particular blog comes courtest of my father, who came across noperformancetax.com and asked me about it. So, here's my explanation, which comes larger from an email I sent back to my Dad:

Ok, I took a look @ the website and I knew EXACTLY what it was the second I saw it.

So, copyright owners [editor's note: this means you, artists!] have 6 rights that are exclusive to them unless they choose to license them to people: 1) the right to copy (reproduce); 2) rt to distribute; 3) rt to create derivative works (works that are based on an original piece but turn it into something different from the original, like a string version of a piano concerto); 4) rt to display; 5) rt to perform publicly; and finally, a 6th right that was added under the Digital Millennium Copyright Act (aka the DMCA): 6) the rt to perform publicly by DIGITAL transmission.

When the 6th right first came up in the Congress, it was SUPPOSED to apply to all public performances of music. However, because the National Association of Broadcasters [editor's note: the organization sponsoring noperformancetax.com] has so much money and can pay for lobbying efforts, it was changed to "digital" transmission. This means that any music broadcast DIGITALLY - mainly webstreaming like radio stations, Pandora and Napster - has to pay for EACH song they play. The Copyright Royalty Board recently established rates for this, which is currently .0018 cents for commercial use. HOWEVER, that is PER SONG, PER USER. When you have millions of listeners, like Pandora does, who listen to roughly 20 songs an hour, that adds up. Ad-based revenue isn't compensating for this, which means that companies like Pandora might go out of business because, as huge as they are, they can't keep up with the licensing fees. This means that users will go back to piracy, because they want the music for free or not at all. So a reasonable licensing fee still needs to be worked out because it just adds up to too much money.

Now, getting back to the point. The "digital" qualification means that... bingo.... ANALOGUE is out. Which means that RADIO doesn't have to pay ANYTHING for ANY songs they play. That's what that website is about - it's about the broadcast industry, who basically forced only the digital services to start paying, is being called out on their crap and they don't want to pay. Obviously you know how I feel about it - if webcasters have to pay, why not broadcasters? There are mom and pop shops trying to pop up on the internet and make a name for themselves as a digital radio station or music download service, but they simply can't afford it. In contrast, the broadcast industry and innovating NOTHING and it owned mainly by Clear Channel. WTF. It's going completely against the new model for music.

Furthermore, those statutory fees are going to copyright owners - YES, that means record labels are getting paid for the use of the sound recording, since they usually own the masters. However, the performance right applies to the underlying "song" copyright as well, which is usually held (at least in part) by the original artists and/or songwriter. This is money that they're not getting, despite the fact that radio makes more than enough money to survive. Yes, radio does have great promotional value; but so does internet radio and streaming services! Why should they alone have to pay for the use of music?

So honestly, I can't support the cause of the broadcast industry - I think they SHOULD pay as long as webcasters have to pay. Broadcasters are jipping songwriters by not paying and I'm just not down with that. I'm not saying the compensation system is perfect or even fair and I'm not cool with the rates right now - I want webcasters to stay in business, so they need to lower the rates or create a blanket license or something, like they do with venues. (PS - that's why you can hear anything at a hockey game or a concert; because the venue pays one BLANKET fee and they can play whatever they want.) I feel that if the broadcast industry was forced to start paying, they could use their leveraging power to equalize the rights. But right now, their just capitalizing off their lobbying power when webcasters are struggling to promote a new music business model, while attempting to be fair to copyright owners. That's my 2 cents.