Who’s Paying the Bill?
For the past several months, performance musicians have started pressing harder to be paid for their work when it is broadcast on radio stations. I tweeted about this topic last week, but the debate continues to heat up, so I thought it deserved a little more attention.
So far, songwriters have been the only ones paid for a song’s airplay. Now performers and record companies want a piece of the money. Up to this point, performers have been “compensated” by radio stations through record sales and ticket sales because the assumption is that listeners hear the song on the radio and then buy the performers’ songs or concert tickets.
As you can see from the chart above, record sales have dipped by 57% over the past decade, forcing performers and record companies to look for new sources of revenue. They already get paid for their songs being played via the internet through the Digital Millennium Copyright Act, which was enacted in 1998. So this seems like the easiest new revenue stream for them to pursue.
The National Association of Broadcasters (NAB) understands they are fighting a losing battle. So they were proactive in putting together their own proposal. NAB’s goal is to protect smaller stations, as well as non-profit stations, which do not have the money to pay these additional fees. They would also like to cap the fees at a certain level and maintain a bit of control should performers want to increase the payout in the future.
From an advertising standpoint, the effect is the same old story that is always told; advertising rates will increase. Stations will not want (or be able to) take on this additional expense, so they will pass these dollars onto advertisers. They have an easy scapegoat in the performers and record companies to point the finger at for the increase too, which makes passing on those fees even easier.