Last Wednesday, June 6th, the House Subcommittee on Communications and Technology met with representatives from the RIAA, NAB, NARAS, Pandora and other musical institutions to discuss pivotal changes to the radio industry: artist compensation for radio play and FM radio chips in cellphones.
U.S. terrestrial radio plays music on its airwaves with no compensation to artists; satellite radio, 3G and 4G Internet and digital streaming and downloading all pay percentages of their revenue in royalties to the artists they play. According to Billboard, who quoted Tim Westergreen of Pandora, “last year, on revenues of $274 million, Pandora paid $137 million in performance fees to performing artists…Sirius/XM, on revenues of $2.74B, paid $205 million, and [terrestrial] broadcasting, on revenues of roughly $15 billion paid zero.” As technology moves forward and the radio attempts to keep up, is the standard set decades ago still fair and applicable today? Should radio pay royalties out of their revenue to artists that are played on their channel, as every other legal music institution does in the U.S.?
Radio representatives are also lobbying for the installation and activation of an FM radio chip in all cellphones. Billboard reported that opposers like Cary Sherman, the CEO of the RIAA, suspects radio is so adamant for the chip in cellphones “to prevent being overtaken by the popularity of the internet radio services such as Pandora on those devices.” However, Jeff Smulyan, the Chairman, President and CEO of Emmis Communications claims radio does not desire a congressional mandate, only discussion and awareness of the availability of these chips for user’s cellphones; the FM radio chips major purpose would be its usage during a natural or manmade disaster, when the internet could be down and cellphone communication clogged.
Although the FM radio chip legislation will not have any major impact on the Hip-Hop arena, radio royalties will have a direct, and positive impression upon the artists of today. As the industry dusts itself off after the massive illegal downloading era, and digital and satellite radio begin to pay royalties along with major players like iTunes, artists are again able to make a living off of their intellectual property. Radio royalties would only be another revenue stream to satisfy the needs of the prolific artists of the Hip-Hop genre of today.
Props Billboard
-Kevin Shea (@kevinnshea)
