Published on BusinessTN (http://businesstn.com)


Stumped Speech

A tough question for President Bush signals a renewed push for radio airplay compensation.

A tough question for President Bush signals a renewed push for radio airplay compensation

Katie Porterfield [1]
November 2007 [2]

Al McCree didn't intend to stump President George Bush when he asked the President at a Nashville town hall meeting in July if Bush's administration would support the payment of a statutory royalty to performing artists for radio airplay. But that's exactly what he did.

"Help!" Bush responded. "Maybe you've never heard a president say this—I have no earthly idea what you're talking about." After directing McCree to call his office, Bush added, "I like country music, if that helps." McCree, president and CEO of Nashville's Altissimo! Recordings, a small, independent record label that sells patriotic music, says he was thrilled when he arrived at the Gaylord Opryland Resort & Convention Center and was told the President would take questions after speaking to a crowd of chamber members.

"I certainly didn't expect the answer I got," says McCree, who coincidentally owns the rights to the recording of "Hail to the Chief," a song that is one of Altissimo's bestsellers. "There were congressional hearings going on at the time regarding the issue." Yet, Bush's humorous response notwithstanding, there's a bigger issue at play—under current copyright law, record labels and performers (artists and musicians) are not compensated when their work is broadcast on terrestrial AM/FM radio stations. Although the law mandates that radio stations pay a royalty to songwriters, Congress has historically denied labels and artists such royalties based on the premise that radio airplay increases record sales. At the same time, however, Internet, cable and satellite radio compensate both groups for playing their work.

"It's a fundamental issue of fairness," says Tod Donhauser, spokesperson for the Music First Coalition, a group comprised of artists and other music interest groups trying to change the law. "Artists deserve to be compensated for their talent and hard work."

The Coalition cites the fact that China, Iran, Rwanda, North Korea and the United States are the only countries in the world that do not require such a statutory royalty. It also contends radio does not have the purported positive impact on record sales. But the National Association of Broadcasters views the proposed royalty as a tax.

"For decades, broadcasters have provided free promotion to record labels and artists who are trying to sell albums," says Chris Jones, an NAB spokesperson. "Asking them to pay record labels for free promotion we already provide them would be wrong-headed."

The NAB contends the recording industry's business model is in disarray due to the fact that technology has changed the way people purchase music. Radio, Jones says, should not have to make up for the industry's revenue loss.

The reality is this issue is just one of the many royalty-related disagreements taking place between the people responsible for creating music and the folks who broadcast it over the air waves or the Internet. And, as technology continues to revolutionize the industry, there's no doubt that more are on the horizon.


Source URL: http://businesstn.com/node/960

Links:
[1] http://businesstn.com/content/katie-porterfield
[2] http://businesstn.com/archive?issue_listing=897#issue-listing