[opendtv] Re: Record Labels and "Performance Tax"

  • From: "John Willkie" <johnwillkie@xxxxxxxxxxxxx>
  • To: <opendtv@xxxxxxxxxxxxx>
  • Date: Tue, 8 Jul 2008 15:46:07 -0700



This is somewhat complicated issue.  If radio stations in the U.S. are
forced to pay needle-drop fees, do you think you'll hear more or less music
on the radio?


Radio gives away music (some radio, anyway) for free.  Record labels don't.
Radio tends to pay talent the agreed upon fees.  Music labels generally
steal from their talent.  Radio is in the entertainment business.  Record
labels are in the banking business.


This area has been hot for months.  


John Willkie, who has alluded to this battle several times on this list 



De: opendtv-bounce@xxxxxxxxxxxxx [mailto:opendtv-bounce@xxxxxxxxxxxxx] En
nombre de dan.grimes@xxxxxxxx
Enviado el: Tuesday, July 08, 2008 3:21 PM
Para: opendtv@xxxxxxxxxxxxx
Asunto: [opendtv] Record Labels and "Performance Tax"


I'm sure this is nothing new, but is the first I have heard about it.  I
suppose, in light of recent discussion, that media ownership means an owner
can provide the media under their own terms.  So little is done for mutual
benefit or for the benefit of society anymore.  It seems that only money and
pragmatism drives our industries these days. 


Tuesday, July 8th, 2008

The NEVADA Broadcaster 




Editorial by Adam Sandler 
Reprinted from the Reno Gazette-Journal  July 8, 2008 
... a majority of the U.S. House of Representatives have become co-sponsors
in support of free over the air radio including Shelley Berkley and Jon
If the record labels have their way, local radio stations could face

The Recording Industry of America, which represents the big record labels,
has pressured Congress to introduce a "performance tax" on local radio
stations that would require radio stations -- both big and small -- to pay
for the right to play music on the radio. The labels claim "it is for the
artists," yet under this proposal, the primary performing artists receive
less than the labels' cut. 

If a performance tax were imposed, local radio stations would need to find
millions of dollars in an already strapped economy to try to cover the cost.
Stations would be forced to take on more advertisers and devote less time to
promoting community events, giving traffic, news and weather reports and
playing the songs you love. Smaller stations could be forced to shut their
doors, putting people in your community out of work. Larger stations would
have to cut back on the local content they proudly provide. Local nonprofit
groups would lose millions of dollars in free promotions, making it harder
for them to raise money and help the underserved in our communities. 

Additionally, what the record labels don't want you to know is that radio
does compensate them with free airplay and free promotion of artist events
-- publicity and airplay that touches 232 million listeners in the U.S. per
week. For more than 70 years, radio has promoted music and performing
artists at absolutely no cost to either the artist or record label.
Additionally, radio compensates the songwriters and composers by paying
yearly dues to the performing rights organizations (BMI, ASCAP and SESAC),
while record labels have been largely responsible for compensating their
artists. And radio stations do all of this promotion for free: Local radio
stations receive no compensation from artists or the record labels. 

From this, the recording industry and its artists enjoy increased
popularity, visibility and record sales. In fact, 

85 percent of listeners identify radio as the place they first discover new

Ask yourself: When was the last time a record label did something to help
our community? My guess is you drew a blank. Yet, I bet you can think of
many times when your local radio station supported local charities or raised
awareness of a local issue by discussing it on-air. Indeed, radio has a
direct impact in every American community from providing critical emergency
and disaster information to helping you decide whether to take U.S. 395 or
Interstate 80. 

Recognizing the value of local radio, many members of Congress on both sides
of the aisle oppose the "performance tax." Introduced to protect local
radio, H. Con. Res 244 has more than 200 co-sponsors including Nevada's
U.S.Rep. Shelley Berkley and U.S. Rep. Jon Porter. Its companion in the
Senate (S. Con. Res. 82) was just introduced last month. 

The record labels have refused to adapt, and now they want everyone else to
pay. Don't let the labels dictate what happens in our community. Ask your
Member of Congress to demand that the labels stop balancing their books on
the back of our community. 

Adam Sandler is vice president of the Nevada Broadcasters Association and
member of the Free Radio Alliance. 


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