The Radio Music Licensing Committee (“RMLC”) has announced that it has entered into agreements with both ASCAP and BMI for interim royalties to be paid by commercial radio stations until final royalties are set. These royalties will be set either through negotiation or through litigation in Federal Courts which act as a “rate court” to determine what reasonable rates will be under the antitrust decrees that govern these organizations.
As 2010 begins, many people are anxiously waiting to see what trends will emerge within the music industry. Much of the conversation in 2009 was how technology is being used by independent artist to promote their music. While this is proving to be a very effective outlet, traditional radio is still a powerful medium. One internet broadcaster is making a move to blend the freedom of internet programming to the listenership of traditional radio.
It has long been understood that college radio stations are among the easiest to introduce new formats. College students are also among those who are most likely to listen to internet radio. Since most college radio stations operate under FCC guidelines, artist who are promoting material via college stations are more likely to be able to track the regions where their music is gaining a audience.
I posted an article a few months ago (http://www.wdkkradio.com/2009/11/24/understanding-college-radio/) detailing the overlooked college audience both for listenership and performances. Looking back over the development of labels such as Motown, Stax and Solar, all who began as independent labels, radio played a major role in establishing the label as major players. As traditional radio seems to be loosing ground, one solution is to give the listeners what they want to hear. One advantage of college radio is that it doesn’t have all the corporate tape to unravel in order to introduce music that isn’t on the playlist.
WDKK RADIO owner D.A. Williams airs a weekly program called “Indie City” on WWSU 106.9 FM, which is run by Wright State Universitiy located in Fairborn Ohio. The college also streams programming on the Univerisities website and D.A.’s program will can also be heard on http://www.wdkkradio.com via simulcast. The show airs Thursdays at 1PM EST. Indie artist will be featured on the show and will consist of artist who have submitted music to WDKK.
Updates will be posted weekly.
![Recommend [wdkkradio]](http://s3.amazonaws.com/arkayne-media/img/logo-recommend-me.png){kind=logo}
Black Radio Fights Performance Royalties
by Neda Ulaby
November 24, 2009 -
New legislation in Congress could drastically change music-industry economics. As it currently stands, musicians in the U.S. aren’t paid when their songs are played on the radio unless they wrote the songs, too. Only songwriters get radio royalties, not the folks who play and sing their tunes. Two bills moving through the House and Senate would change that, by making radio broadcasters pay royalties to musicians, too.
Radio broadcasters hate the idea of performance royalties — really, really hate it. They’re speaking up in Congress and on air.
Cathy Hughes is the legendary founder of Radio One, the country’s largest chain of black radio stations. For months, her stations have played her announcements against the performance-rights bill. Hughes complains, on air, about all the work it would take to comply.
“If the performance tax is passed, all radio stations will have to count how many times a song is played each day and each week,” Hughes says in an on-air announcement. (The bills do not really propose a tax.)
Natalie Hopkinson says there’s no escaping Hughes. Hopkinson is an editor for the popular online news blog The Root, which is geared toward African-Americans. She says just about everyone who listens to urban radio has heard Hughes’ point of view.
“Radio One holds more than half of the top 30 black radio markets. They dominate,” Hopkinson says.
Is This A Racial Issue?
In an essay on The Root, Hopkinson writes that she resents Hughes’ attempts to paint proposed financial regulations as a racial, gender and social issue.
“You know, she’s the little woman. You know, she’s going up against the big recording industry,” Hopkinson says. “No, you own 53 stations and this is a huge, huge, massive, multimillion-dollar company that is still bringing in quite a bit of money.”
NPR was unable to get Hughes to comment. But James Winston, who heads the National Association of Black-Owned Broadcasters, says his organization’s members can’t be blamed for not wanting to pay royalties.
“Our revenues have been going down. We recognize we got problems,” Winston says.
Across the industry, ad revenue has dropped 23 percent in the past year alone. Listeners are turning from radio to MP3 players, computers and cell phones. Winston says there’s a giant paradigm shift across the entire music industry, but radio isn’t trying to squeeze more money out of the recording industry.
“Miss Hughes didn’t start the fight. It began with hearings in Congress, where these older performers — most of who happened to be African-American — were brought forward to tell their tales of woe that their songs were being played and they weren’t being compensated,” Winston says. “Now, nobody asked, ‘Well, what deal did you have with your record company? Why weren’t you being compensated by your record company for these records?’ Instead, everyone pointed their fingers at broadcasters and said, ‘You’re the bad guys.’ ”
It’s wrong to think in terms of good guys and bad guys, Hopkinson says. She says she doesn’t want to see radio — especially black radio — making the same mistakes as the recording industry.
“They’re just fighting over the scraps left over at this point, and I really think Miss Hughes’ time would be better spent figuring out a new model and a way to evolve,” Hopkinson says.
Supporting Local Artists
Chuck D has some ideas. He was working at a college radio station back when he founded Public Enemy in the 1980s. He says that, in order to survive, black radio should grow local talent.
“I would love to see artists in Indianapolis and artists in Louisville and artists in Chicago, be able to get played in their own town,” he says. “I mean, so what if the artists can’t get played in L.A. or New York? If they’re coming from Tulsa, Okla., they should be able to be played in that five-state radius.”
But broadcasters would still have to pay those musicians royalties, as Chuck D says they should. He says he’d like to see people who own radio stations be a little less defensive about performance rights. (It should be noted that NPR has expressed concerns about the bills to Congress.) But he says that black broadcasters, like Cathy Hughes, are competing against more powerful networks that lack a real connection to black communities.
“I’m not saying Miss Hughes doesn’t. But in order for her to stay in business, she has to be able to keep her head above the other corporations that probably don’t give a doggone about the black community,” Chuck D says.
In the end, it’s corporations that will largely profit from a change in collecting performance royalties from radio stations. Fifty percent of the money will go to the rights holders — usually record labels — 45 percent to the stars who sing the songs, and 5 percent to the musicians who back them up
November 24, 2009
A new report from Washington Research Group Concept Capital says that is it becoming less likely that the Performance Rights Act, which would force radio stations to pay royalties for playing music, will become law. In recent months, the House and Senate Judiciary Committees have approved the legislation, and a meeting was held between broadcasters and record labels to engage in mediated discussions over a possible compromise. However, Concept Capital says the odds are dropping for the legislation to pass in the 2009-10 Congress. The research group reduced its estimate from 60 percent to 40 percent odds of the bill passing in the next 12 months.
The report outlines four reasons why the possibility is less likely, first saying that broadcasters are doing an effective job of building opposition to the legislation. The NAB has gotten 27 Senators and 253 House members to sign a resolution opposing the Performance Rights Act. Secondly, broadcasters have gotten traction with arguments that a new fee could have damaging consequences for a large number a radio stations – particularly in a difficult advertising environment – and that a disproportionate share of endangered stations are minority-owned.
The report also notes that we are entering an election year, and individual members are typically more sensitive to broadcasters’ policy agenda as voting season nears. And lastly, broadcasters have new leadership in Washington. Former Republican Senator Gordon Smith recently took the helm of NAB, and his stature, bipartisan reputation and skill set are a positive factor for broadcasters in the radio royalty battle.
The report from Concept Capital concludes, “We do not rule out the possibility of some kind of breakthrough or legislative maneuver that would allow the bill to move forward. The bills’ chief supporters (the Senate and House Judiciary Committee leaders) remain very committed to moving a bill. And the royalty bill has now progressed farther than it has in any prior congress, so risk clearly remains for broadcasters. But our sense is the momentum has shifted away from passage.”
November 24, 2009
Arbitron has been invited to testify next Wednesday, December 2 in front of the U.S. House of Representatives Committee on Oversight and Government Reform. The hearing will examine the PPM ratings service and discuss “whether the PPM technology and methodology accurately measure radio audiences and whether PPM has a disproportionately negative impact on radio stations owned by minorities or targeted toward minority listeners.”
In a statement, Arbitron President/CEO Michael Skarzynski said, “Arbitron welcomes this opportunity to discuss the importance of electronic measurement, the effectiveness of the Portable People Meter (PPM) service, the value of the data it produces, and our responsible approach to the deployment of the service. Arbitron looks forward to sharing with the Committee our expertise and insights based on our long history and extensive experience in gathering and disseminating the quality data that is used throughout the radio industry by broadcasters, advertisers, and agencies.”
“Arbitron launched this innovative electronic media ratings service to help support the radio industry’s objective to have relevant, reliable data that enables it to compete for its share of advertising revenue,” continued Skarzynski. “We have been proactive in our efforts to share relevant and pertinent information with our stakeholders, Congress and other state and Federal government agencies and continue to welcome opportunities to showcase the value of radio and the importance of electronic measurement.”
In the announcement of the House hearing, Chairman Edolphis Towns (D-NY) stated, “With an unprecedented decline in ratings among popular minority television and radio stations, we must explore the possibility of methodological flaws in the implementation of the PPM. As it stands now, the current system jeopardizes the future of minority broadcasting.”
“I remain deeply concerned that increased use of the PPM may unfairly threaten the financial viability of minority targeted radio stations whose advertising revenues depend on the size of their rated audience,” added Towns. “In addition, there is a serious risk that certain groups of minority listeners will continue to be undercounted, imperiling minority audience radio stations and decreasing the diversity of opinions in radio broadcasting.”
Finally, for the first time ever, Internet radio stations have a royalty deal that is reasonably viable and extends for a reasonably-long period of time.
The specific part of the Internet radio industry that this particular deal saves are the webcasters who are (A) larger than hobbyists — i.e., who have aspirations of earning more than $1.25 million in revenues per year — but (B) are not wholly-owned divisions of multi-billion-dollar companies (e.g., AOL & Yahoo and CBS & other terrestrial broadcast groups).
In other words, the set of webcasters who may be able to benefit from this agreement includes webcasters like Pandora, AccuRadio, Digitally Imported, Radioio, and potentially dozens of other companies — really, anyone who wants to get into webcasting as a real business.
For all of those webcasters, being stuck having to pay the CRB decision’s per-performance rates would almost certainly have been a death warrant — they were the equivilant of 70%, 100%, or even more of some webcasters’ total revenues. (In AccuRadio’s case for the first 6 months of 2009, the CRB rate would have been over 200% of our revenues!)
This agreement has three main benefits for those who choose to elect it:
Given the fact that the deal for large pureplay webcasters is a “greater of“ the per-performance rate or 25% of revenues, that still means that Internet radio will pay a far, far higher royalty rate than broadcast, cable, or satellite radio pays.
Our hope is that, over the next few years, Congress will see fit to change the laws affecting radio royalty rates so that all forms of radio that have to pay a sound recordings performance royalty pay the same rates (and if those rates are set by a future CRB, the rates would be set under the same legal standards).
Last week Arbitron Inc. and Edison Research released their latest study “The Infinite Dial 2009.” This study showed that the usage rate of digital audio platforms, suck as online radio, iPods, podcasting, etc., has significantly increased since 2008. Interestingly enough, weekly online radio audience has grown to roughly 42 million Americans, up from 33 million in 2008.
Here are some findings from The Infinite Dial 2009 study:
“The weekly online radio audience increased significantly in the past year to 17 percent of the U.S. population age 12 and older; up from 13 percent in 2008. On a weekly basis, online radio reaches 20 percent of 25-to-54 year-olds; up from 15 percent in 2008.”
“Online radio listeners are more likely to be upscale, well-educated and employed full time; 54 percent of weekly online radio listeners are employed full-time (compared to 43 percent among persons 12 and older); 16 percent of weekly online radio listeners live in homes with an annual income greater than $100,000 (vs. 10 percent among persons 12 and older); 37 percent of weekly online radio listeners have a college degree or higher education level (vs. 29 percent among persons 12 and older).”
“Weekly online video viewing among persons age 12 and older is up significantly in the past year, from 18 percent (approximately 46 million) in 2008 to 27 percent (approximately 69 million) in 2009.”
“iPod/portable MP3 player ownership continues to grow dramatically. More than four in ten (42 percent) persons age 12 and older own an iPod or other brand of portable MP3 player; up from 37 percent in 2008 and three times the number in 2005 (14 percent). Nearly two-thirds (64 percent) of 18-to-24 year-olds own a digital audio player.”
“While only 14 percent of persons age 12 and older say they are spending less time with over-the-air radio specifically due to time spent with iPods and other portable MP3 players, digital audio players have greater impact on radio among 12-to-24 year-olds. Thirty two percent of teens age 12-to-17 and persons 18-to-24 say they are spending less time with over-the-air radio specifically due to time spent with iPod/other portable MP3 players; this is nearly twice as many 18-to-24 year-olds who reported spending less time with over-the-air radio as 2008.”
“Audio podcasting usage also continues to increase. Twenty-two percent of Americans age 12 and older have ever listened to an audio podcast; up from 18 percent in 2008. In 2009, 11 percent (estimated 27 million) reported having listened to an audio podcast in the past month (up from 9 percent, or an estimated 23 million, in 2008.)”
And in an interview with Arbitron’s Senior VP of Marketing, Bill Rose, he stated:
“The sharp growth in weekly usage of online radio in this year’s study provides compelling evidence that radio’s digital platforms may be reaching critical mass,” said Bill Rose, senior vice president of marketing, Arbitron Inc. “The growth of online radio is reinforced with what we are seeing in PPM. We are beginning to see encoded streams of AM/FM broadcasts with significant audience in local markets.”
Representatives from the National Association of Broadcasters (NAB) met with members of Congress and the Recording Industry Association of America (RIAA) to reiterate the negative impact that local airplay royalties would have on local radio stations that provide free airplay to its 235 million weekly listeners.
NAB Joint Board Chairman Steve Newberry (President/CEO of Kentucky-based Commonwealth Broadcasting), and NAB Radio Board Chairman Charles Warfield, (President/COO of ICBC Broadcast Holdings) along with representatives from the National Association of Black-owned Broadcasters (NABOB) and the Spanish Broadcasters Association attended the meeting. Rep. Mike Conaway (TX-11), an original co-sponsor of a countering resolution known as The Local Radio Freedom Act, also participated in the meeting.
NAB Executive VP Dennis Wharton said in a statement, “Out of deference to key members of Congress, NAB representatives met today with representatives of RIAA and the music industry to discuss pending performance tax legislation. NAB representatives, along with representatives of minority-owned radio stations, reiterated our strong concerns over the negative impact that the bill would have on the ability of free and local radio stations to continue serving our listeners.”
Meanwhile, Utah Democrat Jim Matheson (UT-2) became the 253rd member of House of Representatives to co-sponsor the Local Radio Freedom Act, a bipartisan resolution that opposes “any new performance fee, tax, royalty or other charge” on local radio stations for music aired free to listeners. To date a bipartisan group of 253 House lawmakers and 27 U.S. Senators have publicly expressed opposition to the RIAA-backed legislation. (11-17-09)
The Senate Committee on Commerce, Science and Transportation voted in favor of the Local Community Radio Act of 2009, a bill that would allow for the expansion of Low Power FM stations by abolishing third-adjacent channel spacing requirements for full power FM outlets. The legislation has already made it through two key House committees and looks to pass out of the full House.
The Act was introduced by Congressional members Mike Doyle and Lee Terry, which would alter a law passed in 2000 limiting Low Power FM to rural parts of the country. These stations are non-commercial 100-watt radio service that reaches a radius of 5 to 7 miles.
The National Federation of Community Broadcasters (NFCB) has been an ongoing supporter of and advocate for LPFM. Approximately 25% of NFCB’s 250 members are LPFM stations. NFCB believes there is a need for more communities to have their own LPFM. NFCB President/CEO Carol Pierson describes NFCB’s involvement in LPFM as “consistent with our values of localism, diversity, and public service.”
Bad Behavior has blocked 253 access attempts in the last 7 days.
