Solid State Podcast #1

I'm pretty sure I've been promising a podcast for, oh, more than two years now. Or in other words, since I started at Seven Days. Well, guess what? I finally got around to doing one. And I enjoyed it so much, I think I'm going to make this a (semi) regular thing.

For the inaugural edition of the as-yet-unnamed Solid State podcast series, I caught up with our old pal, Casey Rae-Hunter of the Future of Music Coalition in Washington DC — and in a former life, 7D Music Editor extraordinaire.

The topic of the day was the Performance Rights Act currently being bandied about in our great halls of legislative discourse — and championed by none other than Patrick Leahy, no less.

For the unfamiliar, here's the Reader's Digest version: the bill would help prevent recording artists from getting screwed by — hold on to your hat — requiring terrestrial radio stations to — are you still holding your hat? — actually pay the artists whose music they play. 'Cuz right now, they don't. Crazy, right?

Under the current system, American radio stations are only required to pay licensing fees to a song's copyright holder and songwriter, but not the performer. Ironically, in virtually every other "radio" medium, from satellite to internet, stations are required to pay the copyright holder, the songwriter and the performer. But for some reason, terrestrial radio gets a free pass. I won't even get into how this works on a global scale, except to say that you'll be shocked at the handful of countries that claim similar warped systems to our own. Shocked.

Anyway, Casey does a much nicer job of describing the ins and outs of the bill and why it is important than I have time to divulge here. So click the download link below and enjoy.

A couple of notes about the podcast:
1. It's a first attempt and admittedly rough around the edges. Any constructive feedback is much appreciated.
2. Yes, it's totally corny that I used tracks from my old band, the Middle Eight, as the intro and outro music. However, I didn't have time to ask permission to use someone else's. Given the subject matter, I thought that was kind of important. Also, these songs were actually part of my very first collaboration with Casey, as he mastered the album way back in the day. So there's that.
3. On that note, I imagine I'll either work up a real intro once this gets rolling, or mix up intros with tunes from various local bands. Haven't really decided yet.
4. Casey has a pretty cool guest blog post here.
5. He also maintains his own thoroughly excellent blog here.

Solid State Podcast #1
Topic: Performance Rights Act
Guest: Casey Rae-Hunter, Communications Director, Future of Music Coalition
Music Credits: "Easy Chair," The Middle Eight, Lubec (D. Bolles); "The Sun Always Shines," The Middle Eight, Lubec (D. Stockhausen)

Download SolidStatePodcast1.081809

Comments

[Mike Luoma]

Dan and Casey, respect you both & enjoyed listening to the podcast, but you probably won't be surprised that I disagree with you on this issue. The promotional value of radio was the industry standard until the RIAA forced the digital copyright act and created the performance fee where it had not existed before, and this is in the last ten years. You can't act like the performance right is the standard, when it hasn't been. Radio isn't a font of free cash, and pays a great deal for the licensing they already have. I might be biased as a DJ out of work thanks to this economy, but I think you're looking for cash where none exists. You should be looking to the RIAA and the labels. Radio is hurting as much as newspapers are, it's just not reported. This could force music off the radio... do we want a future where radio is all talk radio?

There are elements on station ownership that you cover towards the end that I DO agree with... you don't go far back enough - trace it back to Reagan. The '96 Act was major and acted as you described, but the erosion began under Reagan in the early 80s when community service elements were eliminated and the fairness doctrine abolished.

Watch those music levels, Dan...

[casey]

The issue of (commercial) radio's decline in listenership is directly tied to consolidation and institutional payola (and we know the involvement of the major labels in the latter). I agree about tracing it back to the Reagan era as well (although then we'd have to bring up the Fairness Doctrine, and that's not gonna happen!), but it was the '96 Telecom act that paved the way for the rampant ownership consolidation that ultimately resulted in the dismissal of fine local talent like Mr. Luoma.

It is disingenuous, however, to claim that the performance right for digital broadcasts is an RIAA-engendered stunt. It actually benefits performers, who traditionally have never been compensated for the use of their work in any broadcast medium. Remember, this royalty is paid directly to artists via SoundExchange (the nonprofit that collects and distributes this money from digital "plays"). The performers' half doesn't pass through the labels at all, and therefore isn't held against the artists debt to their labels. It's actual income. And it will become an increasingly important revenue stream for artists as we shift from a physical sales model to one more dependent on access and "plays."

To claim that commercial radio serves as promotion for performing artists is equally suspect. They exist not to turn people on to new music, but rather to sell ads. That was the reason the playlists became homogenized in the wake of massive consolidation in station ownership. Here's a buncha data to back up the claim that commercial radio is incredibly risk-averse, sticks to the "hits" and really doesn't break new music. Check it out.

This, too, can change, provided there's a new commitment to localism and diversity on the dial — principles the FCC requires the commercial broadcast licensees to uphold in exchange for the right to do business on the public airwaves. This isn't a binary argument or zero-sum game, or whatever metaphor you wanna use. We should be compensating performers for the use of their work, while simultaneously working towards marketplace and policy solutions that will save radio from a failed "centralized jukebox" strategy to a vital community resource with unique (and commercially viable) characteristics. One way to do this is to have the FCC make localism a part of its relicensing requirements; another might be to somehow get the consolidators to unload their now devalued properties and get them in the hands of those who want to do right by both the medium and their local community.

And, along the way, we can push for more opportunities for non commercial radio like LPFM (you guys are so luck to have the Radiator!) and get people more interested in what's happening in their own backyards. maybe this would even have positive economic multipliers — those "ripple effects" that could act as mini-stimulus for ailing local economies.

Radio's to cool to be forever relegated to suckville. Remember when obama said that bit about "we reject as false the notion that our national security and ideals are seperate issues" or whatever? Well, we should reject as false the notion that you can't compensate artists while offering quality local radio.

ust a thought, anyway.

[Tyler Machado]

I've got mixed feelings on this. I want to see artists get fairly compensated, but I also am a big supporter of and involved in college/non-comm radio. It was heartening to hear Casey say that there would be exemptions for us, so hopefully it wouldn't put a further strain on our already dangerously-shoestring budget.

Here's a question, though (and maybe I'm just not fully understanding this): if it's only the big, corporate stations that will be paying the big fees, won't it end up being bands like Nickelback and the Jonas Brothers that end up getting all the benefit from this? And the indie and DIY bands so beloved by college/non-comm radio (that probably have the greatest need for the money) won't actually get much income at all?

[casey]

Good points Tyler.

While bands like Nickelback still sell lots of CDs, the physical music market is past mature — it's rapidly deteriorating. Meaning, in the future, even buttrock arena bands may look to performance royalties as an important revenue stream. (Licensing will also play an increased role in artist compensation, but that's another discussion).

In terms of what stations would pay, well... the legislation as introduced (and these bills have a tendency to evolve, which is why it's important to make your concerns heard by your representatives) has a payment breakdown like this:

For Commercial Stations:
-A station with less than $100,000 in gross annual revenues would pay maximum
annual royalties of $500

- A station with at least $100,000 but less than $500,000 in gross revenues
would pay maximum annual royalties of $2500

- A station with at least $500,000 but less than $1.25 million in gross revenues would pay maximum annual royalties of $5000 ( I think I got that figure wrong in the podcast, but I'm word guy, not numbers guy).

For Noncommercial Stations:
-A station with less than $100,000 in gross annual revenues would pay maximum annual royalties of $500

-A station with at least $100,000 in gross revenues would pay maximum annual royalties of $1000

Now, I personally (and keep in mind this is me PERSONALLY) think that LPFM stations should be exempt and maybe the smaller noncoms and college stations should not pay for a few years until we find a sweet spot.

But still, if you do think that artists deserve compensation for these uses of their music (and it seems you do), then you want to pay thems something. And don't forget those indie labels!

At my org, we push hard for greater access for indie acts to commercial playlists. We think it's crazy that Grizzly Bear hits #9 on the Billboard charts but you don't hear them on commercial radio. And what about Spoon? That band is in every commercial and movie in the world, makes the Billboard Top Ten and you don't hear them anywhere on the commercial dial. Clearly there's a major disconnect.

On the other hand, we think the artists should be compensated. Who says we can't have better local radio AND compensate artists? We just gotta adjust our mindsets and start pulling in the same direction. More varied content and actual DJs with personality might equal more listeners, and therefore more revenue. I know — it's a crazy idea!

Remeber, radio wasn't always like it is now. Once upon a time, quality local and regional acts would get added to more and more playlists because the DJs and PDs had autonomy and wanted to get in on the excitement a track was generating. The consolidated radio ownership phenomenon killed that, while simultaneously creating the perfect breeding ground for payola.

Radio's awesome. We just need to re-emphasize what's awesome about it. Public policy + grassroots action + respect for artists = a future for the medium. I personally want that. I hope other people do, too.

[Tyler Machado]

Agree with all that, and anything that makes commercial radio not suck is okay with me, so that's a fight I'm happy to support.

(aside: I've heard Spoon on The Point a few times...I've also heard some dumbass DJ on The Point call them "a hot new band" even though their six albums into their career, but something tells me DJs on that station aren't paid to know what they're talking about.)

[Casey]

Again, VT is unique in that you have an independently-owned local commercial station! Man, I'm missing the place more and more every minute!

[Mike Luoma]

SoundExchange is run by the RIAA, it's a bit disingenuous to call them independent. As a performer & someone with my music on the internet, I'm not a fan. It's another flawed part of the digital copyright act, a functional monopoly. If you put your music on the internet, SoundExchange automatically gets to collect your digital performance fees. You only get to receive your money if you pay up and join SoundExchange. Sweet deal for SoundExchange, not so sweet for performers, who trade the label for another entity that takes a cut. Just saying it's not the ideal you portray, Casey.

Also think you've make a pretty good case for the promotional value of radio in your responses above - if radio exposure is so worthless, why do you want it so much? It's oxymoronic.

I would be in favor of some sort of compromise on performance fees if it was done in tandem with reform of station ownership rules. Reagan gave the public airways away to the corporations in the mid 80s. After 1996, the corporations went public, creating a need for increasing returns from a business model that didn't have increasing returns built into it. Increased profits came from buying more stations, cutting staff and consolidation, not because the stations themselves were producing more profit. There were a few big companies that led the charge - Clear Channel was certainly the most visible, but Cumulus was almost as large and more savage in their practices than CC, for example. These companies changed the way radio operated, as even the smallest companies were forced to act like the big ones, or forced out. If we could get back the public airwaves and install the performance fee, then I'd be with you. My heart agrees with most of your arguments, but my head says it's not realistic, and it's only a small sliver of what needs to change.

[casey]

Mike, SoundExchange is NOT run by the RIAA. There is equal representation from the indies and artists on the Board of Directors, and it functions as an independent nonprofit. It wasn't always this way, but many people fought to make it so. So that's not disingenuous — it's fact. The agency collects and distributes performance royalties for digital plays; a performance right for terrestrial radio would likely extend their Congressionally-authorized collection/distribution responsibilities to that arena.

Also, signing up with SoundExchange is ABSOLUTELY FREE. They will collect money on the artists behalf for digital plays (remember, these are NOT downloads, but webcasts and satellite radio programming), and, as long as they have an address, they'll send you a check. IT COSTS THE ARTISTS NOTHING (sorry for the all-caps, but it's important to get the facts straight).

It would be awesome to get reform on radio station ownership rules — my org has ben pushing for this for a decade. But that doesn't mean we shouldn't compensate performers.

[Tyler Machado]

Casey you may want to get in touch with that independently-owned commercial radio station. There's a note up on The Point's website about the legislation saying that labels would get 50% of the revenue...and that's totally false, yes?

(Also The Point really bothers me with their "independent" posturing. Sure they'll occasionally play Spoon or some other popular-ish indie band, but their playlist is still largely indistinguishable from any corporate adult contemporary station.)

[casey]

The Performance Right breakdown is:

45 percent to feature performer
5 percent to backup performers
50 percent to the sound copyright owner. This is most often the label (major OR indie, but it can also be the artist — when you record something, that sound copyright isyours until you contractually assign it to another entity, ie, a label).

The artists percentage goes DIRECTLY to the artist — it doesn't pass through the label at all. Meaning, it's not held against the artists' "recoupables" or debt to the label. In that regard, it's something of an advancement for artist compensation.

And remember, it already exists for digital (since 1995, I believe), so it's not like some new thing.

Also, it doesn't take anything away from the songwriters' cut.

As far as the Point... Well, I haven't lived in VT for over three years, so I can't really comment there.