Opposition Mounts to “Performance Tax”

by

guitar

It is no secret that the Recording Industry Association of America (RIAA) is on the warpath against radio, the medium that has driven more sales for them than any other. After over eight decades of radio promoting music for free, the RIAA is seeking to enhance their diminishing bottom line by creating a new revenue stream in a way that will injure radio, particularly minority and niche stations.

In my time, I have been a radio DJ and an independent music promoter in one of the most musical cities on the planet: New Orleans, Louisiana. I have had the pleasure of working with high profile artists like James Brown and Herbie Hancock as well as up and coming groups like Johnny Sketch and the Dirty Notes. One common thread in my interactions with all of these artists has been that airplay is massively important to them. Without the distribution channel provided by radio, audiences would have a vanishingly small chance of running across their work, much less becoming “true fans” who consistently purchase their music.

HR 848, The Performance Rights Tax, has potential to cause palpable harm to stations, particularly the smaller and independent ones. The disturbing thing is that a solid 50% of the revenue generated will go directly to the labels as opposed to the musicians the RIAA purports to serve. Facts like this are understandably glossed over in the RIAA’s quest to have this tax enacted.

In the interest of providing the facts of the matter, our colleagues at the National Association of Broadcasters (NAB) have launched NoPerformanceTax.org, a website devoted to providing information and resources about this struggle. Resources include video of the Congressional testimony of Steven Newberry and Larry Patrick before the U.S. House of Representatives; great public-service audio spots against the tax; ads and link buttons you can put on web sites or in printed publications.

If HR 848 gets passed, we will see a major curtailing of radio offerings across the board. The tax is being vigorously opposed by religious and minority groups, including the National Association of Black-Owned Broadcasters and the Spanish Broadcasting Association. This tax would likely force many small market stations to close, reducing local content and weakening the emergency broadcast system. That last one fills me with dread; as a survivor of Hurricane Katrina, I have a very personal view of radio’s essential nature during time of disaster. It’s a view that is shared by many people across the country who have suffered floods, tornados, wildfires, or the terrorist attacks of 9/11.

Go check out NoPerformanceTax.org and join the battle to keep the airwaves vibrant and alive. Oppose the tax on local radio — the next generation of talent will thank you!

Photo courtesy of the Rick Harris, usd under its Creative Commons license

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27 Responses to “Opposition Mounts to “Performance Tax””

  1. ethel m harrison Says:

    I oppose the tax on local radio.Do not pass that bill if you want my vote next term.

  2. LAKISHA WALKER Says:

    I do not agree with the bill John Conyers and Patrick Leahy are attempting to pass. This bill will adversely effect minority radio and subsequently cause the demise of minority radio.

    Thank you.

  3. Mike Parker Says:

    I disagree with this tax. What’s next, making us pay to listen to our own cd’s that we have purchased?

    • Steve OKeefe Says:

      Mike: After that comes that tax for humming a tune, or even remembering it!

      Thanks,
      STEVE O’KEEFE
      Blogger, Radio2020

    • Al McGee Says:

      The key word here is PURCHASED! It is yours to use at home for personal use. The radio stations do not do this. Do you think that FOX, ABC, CBS or the like can go get a copy of (FILL IN THE BANK) from Wal Mart and play it over the air? No, of course not! That would be stupid. No one would make any money. They must pay for it. Instead of a tax, they need to send a fee for every song they play to the artist (or record label).

      • Will Blackmon Says:

        Al,

        We already have a system in place to pay finds to play music on air through ASCAP, SEASAC, and BMI. Why not make sure these reporting agencies are paying the fees to the artists that are meant to be paid?

        What this whole bill is about is giving a bailout to the 4 major labels, three of which are NOT housed on US Soil.

        Do YOU want to be the butt of yet another tax payment?

        Think of it this way….

        There are 4000+ Wal Mart Stores in the US. If they play music, they have to pay the tax, right?

        Who do you think is really going to pay that tax…. YOU Are!!!! they’ll increase the prices so YOU pay the tax!

        If you live in a rural area, more than likely, the tax will close your fave radio station, and you’ll have no alerts from the Emergency Broadcast System.

        If not, they’ll be forced to move to talk only format.

        Most radio Stations will not take the chance to play new music form artists because they’ll have to pay to play.

        Stations will have to increase advertising rates due to the tax… companies who are advertising, will have to scale back due to the fees

        With 900 Million already going out for Healthcare, can YOU afford to pay another tax?

  4. Samantha Hutch Says:

    I like my free speech! And i like my Free Radio! I oppose this tax! The fat cats have eaten enough! Time to get skinny!

    • Steve OKeefe Says:

      We agree that artists should be fairly compensated for their compositions and performances, but this Performance Tax is not the way to do it. It will stymie free speech for the benefit of rights managers, not rights holders. Listeners and artists will be penalized for the sake of building an elaborate tracking bureau that will probably never work.

      Thanks,
      STEVE O’KEEFE
      Blogger, Radio2020

  5. William Ketelhut Says:

    The only countries that don’t pay artists for onair play are the US, China, Rwanda, Iran and North Korea. Their are millions of overseas dollars waiting for US artists with the passing of this bill. They won’t get that money until European artists get theirs from the US. A station that has less than $100,000 will only pay $500 a year which shouldn’t cripple a station. Heck, I make that is pop bottle returns every year. Nonprofit stations won’t pay anything. If Internet radio can afford this, I don’t see how commercial stations can’t. Listening to artist like bassist Ralph Armstrong talk and hearing some of the stories by lesser known musicians, I find it hard not to support. You talk about lesser diversity but we have been seeing that for years which is why I have switched to listening to college stations in the area who actually play new artists like the Watson Twins and the Pipettes or classic artists like Frank Zappa and Tom Waits. New country acts like the Zac Brown Band on radio are becoming rarer as established artists are almost exclusive on the stations. Besides it is not a TAX but a royalty which is already getting paid to songwriters and record companies everytime a song gets played. Only the artists doesn’t see a dime. One way to look at this is when you call a radio station do you request the artist or the songwriter? Get the real facts and then make a more informed decision. Radio stations are only giving one side of the argument, the side that makes them more money.

    • George Williams Says:

      Thanks for chiming in William, while i do not agree with much of your views I do appreciate you joining the conversation.

      Several points:

      The reduced royalty fees that you are quoting are recent changes to the bill in question. It was a long hard fight to get them to a reasonable level. Internet stations often have a vastly lower financial overhead than broadcast stations do, making it easier (although still sometimes problematic) for them to be able to pay the fees and remain viable.

      I worked in music for years with both international acts and street laevel bands waiting for their first break. During over two decades in the industry I constantly heard artists at all levels complaining of their unfair treatment at the hands of the labels, never the radio stations- the labels.

      Labels that will be keeping over 50% of the revenue generated by this royalty. Labels based primarily outside the US. Ask the family of Jimi Hendrix about the treatment of artists by their labels. Compensation for the performers is already contracted with these same labels, perhaps we should turn a microscope on their practices?

      Please, talk to some of the artists out there that are trying to break, airplay is what they are after because airplay= exposure.

      George “Loki” Williams
      Blogger, Radio 2020

      • William Ketelhut Says:

        Hi George,

        I still have to read the actual bill though there is talk about money going to the labels. The artists I talked to refute that 50% of this new bill will go to the labels. Besides, the labels already see a royalty for songs at this point due to legislation already in place and I thought that 848 was an amendment to that.

        I agree that most bands want airplay but who is playing what I consider some of the best bands right now. I heard the same artists day-in, day-out the few times I listen to commercial radio. Yesterday I heard “Poker Face” twice in less than 10 minutes but still can’t find a non-commercial station to play the new Sparks record which is excellent (and my favorite album of the year so far). How about Los Straitjackets, Zaza, Jessica Lea Mayfield, Emily Rose or any of many great new talents out there. I don’t care to hear Jordan Sparks or most of the Idol singers 20 times a day. And they can stop playing “Human” by the Killers 10x a day.

        I know the labels have a lot to pay for in terms of fair treatment but what about all the bands they do put effort into that don’t go anywhere and what about labels that are owned by the musicians that are putting out their own music. That has to come into play also as artists like Madonna, Zappa and others own their own labels to various success.

        And as far as exposure, their have been numerous new marketing techniques such as commercial tagging and soundtracks/TV shows to help artists breakout in non-traditional ways. It has worked for Kate Voegele.

        PS – I do talk to a lot of bands. I do a show on a college station and have talked to numerous musicians from Martha Reeves & Brian Wilson to Theresa Andersson & Von Iva so I do know a lot about the current industry. I have lots of friends in commercial stations and with all the cutbacks and increased syndication (which has been going on for 10 years even when stations were raking in the money) this money should not impact them that severly. They play what they think people want to hear and if people don’t like them playing the same 20 songs, they need to call in and request new stuff.

  6. Zach Says:

    Radio stations don’t want to get taxed. Hey, I get that. And I certainly have no love for the RIAA, with or without this. My question is, why should internet radio providers like Pandora have to pay these royalties and terrestrial radio stations shouldn’t – especially since a site like Pandora plays a lot more music and has fewer commercials?

    • George Williams Says:

      Actually if you visit the link in my comment below you will find a great answer to that question. Personally I do not not believe that webcasters should pay either as they are a promotional mechanism second only to radio itself in reach and effectiveness. Add into that the fact that streaming onto the INternet is increasingly important for traditional stations in order to remain viable in the 21st Century.

      Performer compensation is already part of the legal arrangement between labels and artists, now they are double dipping in order to preserve a failing business model. I think that real attention should be turned on the contracting practices of the RIAA.

  7. George Williams Says:

    Hey William,

    I just wrote about a wonderfully informative piece about the Performance Rights Act in Reason Online and I’d love your opinion on it. I’ll also be replying in detail to the points you just brought up but I won’t get the chance to until after I meet my deadlines for the day.

    Check out: https://radio2020.wordpress.com/2009/06/11/performance-rights-act-the-voice-of-reason/

    You know Theresa? She is a true jewel! I know her from the Neutral Ground Cafe and volunteering for WWOZ back home in New Orleans. You should hear her when Mark from Johnny Sketch and the Dirty Notes is playing cello with her, it is nothing short of genius!

    Thanks for checking back!

    • William Ketelhut Says:

      Theresa is wonderful. She did a show here a few months ago and we had a nice talk about gardening. When I asked her about her influences, she listed that and colors which I found very refreshing so that is what I steered the conversation towards. She is just one of many artists I wish I could here on traditional radio.
      I’ll check out your piece and was wondering if you could address the idea that radio is being said to blacklisting artists who support the act. I know very few artists which don’t support it so I wonder what music they will play. All foreign artists must support it because they are already getting royalties from their own countries. Most US artists would seem to support mainly to get royalties from other countries, esp those artists which don’t get a lot of airplay in this country but do overseas. This almost reminds me of when country stations stopped playing the Dixie Chicks for their stance on Bush which I thought was idiotic, esp when artists like Dave matthews, Bruce Springsteen and Neil Young weren’t touched (another pet peeve of tradional radio).
      Here is a list of other acts that I never (or almost never hear) on traditional radio: Can, Dead Can Dance, Big Star, Phranc, Michelle Shocked, Hawkwind, Shadows (UK), Chameleons, Dictators, The Damned, Poi Dog Pondering, Specials, The Jam, Stranglers and I haven’t hear Siouxsie and the Banshees in like forever. If I could hear these bands here on Detroit radio I would switch back.

  8. berkbw Says:

    The topic here – is about a tax.

    IMHO this is a nice bit of pork that will not even be noticed by the voting masses. People whine that they don’t want to pay to listen to the radio – nice smoke screen – can’t happen. Broadcasters whine about the overwhelming burden – five hundred might be a burden to a back yard station, and while greater, just a tiny part of the cost of operation of a commercial station, while still maintaining a level playing ground.

    >I< feel: 1) There is no need for a pork tax, there is already a royalty tax.
    2) the legislators pushing this should be punished.
    b-

  9. DJ Digital Gem Says:

    Well, as an INTERNET DJ being forced to PAY TO PLAY, I don’t see why traditional radio stations have had it so good all these years. Even as a club DJ, the club I worked for was forced to pay royalties on all of the music that I played. Radio stations make money off advertising and then don’t have to pay to play music. It’s a crock and it’s about time that the RIAA realized that they need to be cahrging. I plan to contact my senators and tell them to SUPPORT Performance Rights Tax!

    • George Williams Says:

      DJ- You are welcome to your opinion, but if you look at my writing in the early days of this blog you’ll see I was as outspoken against the royalties being squeezed out of of the Internet DJs when they were being pushed through. Does the fact that you are being wronged mean that you should support something wrong? I cannot subscribe to that logic.

  10. r0botluv Says:

    I haven’t heard anyone mention the fact that most of these so-called local stations that will be hurt by HR 848 are actually owned by (multi)national corporations and are anything but local.

    The corporate stations in my town, in which more than half the dial is owned by Cl(F)ear Channel, are running ads not stop against this bill, claiming it will damage “local radio”. Something they most definitely are not!

    If it’s true that stations with yearly revenues under 100k will pay only a $500 flat fee, I believe this bill will do nothing more than bring the US to same level as the rest of the radio listening world.

    If the feds really want to do something nice for radio, they should kick it old school and support local/community/and all other forms of small broadcast.

  11. Al McGee Says:

    I have no problem with this tax. First of all, its their music, not yours. If you want to listen to their music, go buy it (or steal it on the internet). Radio stations have been going down in quality and quantity since I have been listening to them. Television station pay for their programing and so should radio stations. If the station does not like the tax, they can do what everyone else does when their business or job does not pan out. Leave it and get a new one!

    Second, this will also hurt the record labels due to no free advertising. The best way to advertise a song is to play it on the radio. I’m sure there will be artists who would be against charging this tax.

  12. Mike Says:

    Did we not form this country because of being taxed to death?

  13. Tom Says:

    There is something very dishonest and misleading about this debate. THERE IS NO SUCH TAX. No one is even suggesting a tax. Taxes go to the government. This is a disagreement between these two groups.

    I’m all in favor of radio and televison being broadcast for free. It’s the American way. No one owns the airwaves. Just don’t try to say we are being taxed. Okay?

  14. Ronnie Hart Says:

    Please do not give any more american money to foriegners.

  15. Leeland Says:

    If this passes, it will be time for the stations to institute “pay for play”. They will be forced to charge the labels promotion fees to offset the performance fee, especially the non-profit stations which do not generate revenues from advertisers.

    To the tax vs. fee argument…it makes no difference what you call it, it use to until the government started instituting fees instead of taxes, thus predefining the two terms. It is now a matter of semantics, to say anything else is a waste of time.

  16. Patrick Says:

    If you want my vote dont pass the tax

  17. Joe Says:

    Not too long ago radio stations had 6 full time air talents, plus 4 part time air talents, a news person, and a production director all on staff, and still made money. Now they have a morning show, one PD for 4 stations, and a computer clicking away voice tracks in an empty building. Ad rates didn’t go down..hmmm where did all the money saved from the backs of fired employees go??..that’s right, the bottom line. Now, there is a tax to pay bands who’s music generate ratings that are used to make money for stations..a tax that will be equal to the cost of one full time air talent, and radio owners are complaining?? I smell a little BS from oweners who enjoyed the savings for firing dj’s for years don’t you?

  18. Alma Keith Says:

    What else in this administration going to tax?. I think this is about as
    crazy as anything I have ever heard. The taxes will go to mostly foreign countries. I guess they will try to tax the air we breath. I don’t know how much more the citizens of this country can take.

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