Radio airplay is the primary marketing outlet for gospel music. Stations pay for licenses from ASCAP, BMI, and SESAC and the proceeds are distributed to the songwriters and publishers. However, artists and labels have never been paid a performance royalty for over-the-air broadcasts in the U.S. It has been that way since KDKA first went on the air in Pittsburgh, Pennsylvania back in 1922. However, that could change very shortly.
The United States along with North Korea, the Congo, and China are the few countries where radio broadcasters are exempt from paying royalties to artists. The U.S. stands out as the most industrialized nation without any system of artist performance royalties.
On December 18, 2007, the "Performance Right Act of 2007" was introduced to congress. The legislation would correct a loophole in the copyright law that exempts AM and FM broadcasters.
An organization called "MusicFirst" that is comprised of many music industry associations such as the Recording Academy, American Federation of Musicians, and the RIAA are lobbying support for this legislation. They state that corporate radio has built a huge industry based on playing sound recordings without ever paying the artists. Technology has brought forth Internet, satellite radio, and cable - all which pay a performance royalty. MusicFirst wants corporate radio to be held to the same standards of its competitions and start paying artists fair market value for their music.
On the opposite spectrum of this issue is the National Association of Broadcasters. This organization holds the opinion that radio has been more than fair to artists because radio promotes artists to 232 million listeners every week. They view the Performance Right Act of 2007 as a new type of "tax." In response they are supporting the "Local Radio Freedom Act" which is legislation that would prevent any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air.
I have tried to fairly represent both sides of this issue. I have made my living in the music business for the past 10 years. Prior to that I worked in radio for four years. I understand where both parties are coming from. However, here is my opinion on this issue. Commercial radio stations exist for one reason - to sell advertisements. That is it. Radio stations do not develop programming for the good of the people. Programming is designed to attract an audience because the stations need people to hear the commercials. What does a radio station do that doesn't have an audience? They go out of business. A station needs listeners that hear the ads and then patronize the sponsors. More listeners result in higher ratings. Higher ratings translate into higher ad revenue. So how does a radio build a loyal audience that provides them with high ratings? They simply do it by playing an artist’s music. If a radio station could play advertisements 24 hours a day and still have a listening audience they would definitely do that. Everyone knows that cannot work. So, they attract an audience with a product (artist's music) that they do not have to pay for.
If the Performance Right Act of 2007 becomes law, that means gospel artists and their respective labels will start seeing checks in the mail. A new organization similar to Sound Exchange, which pays owners of sound recordings royalties for Internet, satellite radio, and cable radio use, will likely be started.
Do artists benefit from radio play? Absolutely! Is it fair that radio stations can use our music to finance their business and not pay a royalty? Absolutely not! A fair royalty needs to be put in place. Performers need radio stations and radio stations need our music. Think of this as a co-op deal. Both parties need each other, but lets treat each other fairly.
For more information, here are links for further research:
http://www.musicfirstcoalition.org
http://www.nab.org
http://www.grammy.com
http://www.riaa.com
Steve Allen
http://www.squareonestudio.com
Author: Steve Allen
| Author's Website: http://squareonestudio.com
Written: 08/07/2008
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Category: Steve Allen
Comments: 12
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I don't agree with your statement that radio stations exist for one reason to sell ads. And the statement of Radio stations not programing for the good of the people? What market are you in?
I own and manage WGNQ, a small Christian AM station near Chattanooga, TN. I am a commercially licensed station but in the three years I have owned this station I have had negative revenue each month. Only recently have I begun playing Southern Gospel two hours each morning and paying appropriate royalites on it. If I also have to pay performance rights and if the accounting for these rights is very expensive or time-consuming I will have to drop the music. I realize an argument can be made that I should manage the station better so that it should show a profit. I agree, but most artists don't know the financial pressures under which small-market AM stations operate. Until problems unique to our niche can be solved, we cannot afford to pay increased royalties. AND YES, MY STATION DOES EXIST TO BRING GLORY TO GOD, ENCOURAGEMENT TO GOD'S PEOPLE AND SALVATION TO SINNERS. I realize that my brother and sister artists are also struggling and hope that together we can find solutions to these financial challenges. Marvin
I don't exactly agree that artists and record labels deserve royalties. Think about it, why does the artist have their music played on the radio - to sell product and to get bookings! That is advertisement just as the sponsors advertise their products. The sponsors do not receive royalties because they have a commercial played on radio.
Steve,
I agree with what Steve is saying. I would encourage readers to refrain from "over-personalizing" this issue. I think this article is discussing radio in the broadest of terms and is not singling out any one station. Sure there are radio stations out there that are passionate about ministry. However, lets look at this with a larger world view. Let's look beyond our microcosm of "southern gospel" — quickly you'll find that stations want to make profit. If you're not making money it isn't a business; its a HOBBY! This proposed royalty will impact every radio station, not just gospel stations. I feel this is good for all artists!
Really? Do artists need to get paid again? They make money from love offerings or flats, CD, videos, etc. Wanting a royalty is just greedy. I guess some of these groups would like the extra money to pay for a new buss.
"Really? Do artists need to get paid again? They make money from love offerings or flats, CD, videos, etc. Wanting a royalty is just greedy. I guess some of these groups would like the extra money to pay for a new buss."
Look at the big picture outside of Southern Gospel and what do you see? You see promotion companies trying to figure out every possible way to get money TO radio in exchange for airplay. Radio is providing the service. The artists and record labels are their customers (indirectly via the promotion companies, of course).
You don't see radio running to artists with cash in hand. If this legislation ever becomes law, artists and labels will quickly sign agreements with all the major stations waiving their rights to any airplay royalties.
That's the fundamental reason why this legislation makes no practical sense.
Also, comparing artist royalties to songwriter royalties is apples to oranges. Songs are intellectual property. Performances of songs that are "fixed" on some sort of media are physical property.
The reason we need a law requiring record labels and radio to support songwriters for their work is because songwriters wouldn't get paid at all. The "song" is not a physical piece of property. It's an idea someone set down that can be "fixed" in one way by this artist and "fixed" in a completely different way by another.
Sadly, even with the laws we have in place, songwriters often still have trouble when it comes to getting paid.
In contrast, an artist is paid every time they sell a CD or a concert ticket. It really doesn't make any practical sense for an artist to demand royalties from radio, turn around and hand that money to a promoter, who in turn gives it right back to radio...does it???
“Always acknowledge a fault. This will throw those in authority off their guard and give you an opportunity to commit more.”—-Mark Twain
http://dir.salon.com/story/ent/feature/2002/06/25/pfp_congress/
Here's the double edged sword...Congress is toying with the idea of slaying the "pay for play" beast.
I wish them well on that front. Kicking royalties back isn't the answer, though. If "pay for play" is viewed as being the same as "payola" (it isn't quite), then enact laws to ban pay for play.
On the other hand, we're getting MANY more channels of radio now that satellite, internet radio and HD radio are on the scene. Maybe there's enough options out there that we should let capitalism take its course.
As long as "pay for play" songs aren't charted, they aren't illegal...at least for now.
“Always acknowledge a fault. This will throw those in authority off their guard and give you an opportunity to commit more.”—-Mark Twain
Oops...ignore that link. The story at that link is six years old.
(I looked at the date at the top of the page, which was today's date, but failed to note the date within the story itself.)
Upon further research, I see that Congress HAS put down pay-for-play since that story was written.
So, radio stations are no longer getting up to $500,000 per year from indie promoters.
This brings up other questions, though. With that extra cash no longer flowing out ($500,000/year times 1000 major pop/rock/country, etc. stations across the USA is a LOT of cash), shouldn't the record labels be content with their gains? Or are they trying to punish radio for taking their money all these years?
Have the artists seen any of that money the labels are no longer spending on promotion?
“Always acknowledge a fault. This will throw those in authority off their guard and give you an opportunity to commit more.”—-Mark Twain
As the Operations Mgr for 2 stations in Indiana and a singer on the weekends, I understand both sides. However, I have to go with the side of the stations here. We pay ASCAP, BMI, etc... The artists want their music played to get exposure so they can sell product and get bookings. I am looking at every genre now, not just SG. I know a lot of SG artists stuggle to make it, but I don't feel it's the radio stations responsibility to pay them. They are doing a service by playing them. Therefore, they should be grateful to radio. The artists all need radio, just as radio needs them. I agree with that statement. Stations also are in it to make money so if they give up more of their profit then where are we?
Radio Airplay and Performance Royalties content seems to me pretty good. Whatever you said here really informative. Thanks mate
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