Nancy Sinatra, Dave Navarro, Sugar Hill Gang and others appeared before Howard Berman's (the "representative from Hollywood") House subcommittee yesterday in Washington, imploring Congress to impose performance fees on radio. Berman is the author of legislation that would require all radio stations to pay the RIAA member record companies at least $5,000 a year for playing its records. The rates would be higher for stations who bill over $1.25 million a year. Some 200 House members have signed on in opposition to the bill. The Department of Commerce and the White House came out in favor of the bill this week. Sinatra said it was only "fair" that "artists" get compensated every time a record is played. If passed, the amount of money that would go from broadcasters to the RIAA companies would be in the billions..just for starters. Just how much of that money would actually go to the artists and musicians who performed on those records isn't exactly clear, but Berman and the record company arguments are centered around the "artists" and not the record companies. The RIAA companies are suffering with a decline in CD sales, but they have benefitted with huge numbers in paid downloads from Internet portals like Apple, Amazon, Wal-mart and many other on line stores. They also have been able to write the law for internet radio stations which have quadrupled the rates of playing music on the air. The argument from the RIAA is that the U.S. is one of the few countries who do not charge for performance of music. But, the U.S. has roughly 13,000 radio stations, as compared to numbers in the hundreds for other countries like Great Britain. Still today, the larger stations in those countries are government owned. While the lawyers and execs of the RIAA companies try to down play the effect of broadcast radio stations on sales of their product, the marketing and promotion departments at their companies continue to spend hundreds of millions of dollars each year in getting those records played on the radio. If broadcast radio does not effect music sales, then exactly why the companies continue to spend those huge sums to get exposure isn't entirely clear. The NAB recently paid for a study on the effect of radio play on music sales which we reported earlier this week...read about it here.
Additionally, broadcast radio generates billions each year from companies like Pepsi, Chevrolet and others who believe that radio influences product sales...enough that they are willing to pay for it. The RIAA companies are getting that airtime for free to promote their product. Read more about what went on in Berman's subcommitte hearing yesterday at the links below.LA Times StoryBusiness Week StoryIntellectual Property Watch Story