Posts Tagged ‘Performance Tax’

House Judiciary Committee Passes Modified Performance Tax

May 14, 2009

voteDetroit: 200 protesters joined local radio hosts Mildred Gaddis and Reggie Reg carrying signs saying things such as “Save Black Radio” and “Vote NO on HB 848,” circling the entrance of the federal building in Detroit beneath U.S. Rep. John Conyers’ window.

The View Inside D.C.: The House Judiciary Committee passes the controversial Performance Rights Act 21 – 9.

Now HB 848 moves on to the floor of the House of Representatives for a full vote while a similar measure is working its way through the Senate. On the bright side, a voice vote was taken adding “manager’s amendment” by Chairman John Conyers, D-Detroit that does have some ameliorating effect on the bill. Its a nasty pill to swallow, but if it does go all the way it is good to see some much needed adjustments being made. Some of the positive changes being made, as reported by Deb Price at The Detroit News, include the following:

  • A sliding fee scale for small broadcasters.
  • A delay on the start date for payments.
  • Talk radio stations playing only snippets of songs are exempt
  • Broadcasts of religious services are exempt.

It is my hope that this bill will not gain traction in the House. Even with some of the adjustments made, HB 848 will be an onerous weight upon the radio industry.

Since this issue particularly threatens niche markets, it’s no surprise that it is seen as a war on minority radio. Justifiably worried about their future viablity, as Spanish Radio already is, black owned radio stations and programmers are making their voices heard through actions like the protest in Detroit. According to Deb Price at The Detroit News, the City Council still doesn’t see how this bill will cost jobs in their city:

The Detroit City Council also weighed in, discussing a resolution Tuesday that supports the arguments made by black radio stations. The resolution, introduced by Kwame Kenyatta and JoAnn Watson, failed and was referred to an entertainment committee.

“Many of our artists haven’t gotten their due, but it should be the record companies, not the stations, who should pay,” said Watson, who has hosted the “Hello Detroit” radio show for more than 20 years. “(Small) black-owned stations will go out of business. They will close the stations down, I’m telling you.”

The extensive online efforts of our sponsors over at the NAB (, and the opinions of iconic artists such as George Strait, are some good things to start with if you are late to the issue. This is only the initial hurdle, if we can make people aware of the facts they will get involved. Get active now before the full House votes.

Even watered down, the Performance Tax is a deal that will hurt everyone involved — with the only exception being the record labels.

Photo  courtesy of tifotter, used under its Creative Commons license


Spanish and Religious Radio Tired of RIAA’s Broken Record

May 6, 2009

brokenrecordThe Performance Rights Act proposed by the Recording Industry Association of America (RIAA) is a clear and preset danger both to our industry and to diversity of content on the airwaves. Like a broken record they keep falling back on the same distortions notably supported only by artists who have already made millions as opposed to those who rely on radio to fuel their careers (i.e. most of them). Smaller and niche market stations would be unreasonably burdened by these fees, in many cases to the point of bankruptcy.

This is of particular concern to the growing Spanish language market, who mobilized on Mexican Independence Day, Cinco de Mayo, in Washington DC for a panel discussion on the negative impact of the RIAA’s proposed fees. Hosted by The Free Radio Alliance and Univision-syndicated morning personality Eddie “Piolín” Sotelo, the panel included luminaries from the Latin American  broadcast world, including the following:

  • Bustos Media Chairman/CEO Amador Bustos
  • Salem Espanol National Director Tony Calatayud
  • Gaytan Broadcasting owner Maria De Leon
  • Spanish Broadcasting System VP/GM Frank Flores
  • Entravision VP/Public Affairs Marcelo Gaete
  • Top Line Broadcasting President/CEO Rafael Grullon
  • Lazer Broadcasting President/CEO Norberto Sanchez
  • Univision Radio President/COO Gary Stone
  • Border Media VP/Market Manager Miguel Villareal

Under discussion will be numerous ramifications of the “performance tax,”  including one discussion titled “how a performance tax would destroy diversity in voice and thought in the Spanish-language radio community, as well as the potential for massive job losses.” It think that sums it up.

But wait, there’s more. The Latin American community is far from the only one becoming aware of how this tax will hurt the radio industry. Now religious programmers are getting into the fray as well. Religious broadcasting concerns Salem, Northwestern Media, Crawford Broadcasting, and the Christian Listening Network have jointly written to congress in protest of the impact this would have on their own portion of the airwaves. Radio Ink Magazine reports:

The joint letter reads, “Radio companies like ours that air ministry programming are trying to weather the economic storm ahead, but some members of Congress — at the urging of the foreign-owned record labels — have introduced legislation that could make it impossible for radio ministries to survive.”

The broadcasters continue, “Why would we legislatively and financially reward an industry that consistently displays bad behavior at the expense of local jobs and local communities? Local religious radio stations like ours exist to help people. And the entire radio industry is formed around the notion that it has the responsibility to not only entertain and inform, but also to serve the great people in this country. We take pride in doing that every day, and it is why we need your help.”

As we get closer and closer to a decision at the congressional level, I’m sure we will be seeing many more groups coming forward to protest the RIAA’s stance. The fact that much of the revenue generated would flow out of the country is only one of many reasons that this legislation is a bad idea. The fact that over half of the funds that stay in the states would never be seen by the artists they purport to help is another.

Look at the case of Grammy Award-winning recording artist, Alannah Myles, who hit number one in the charts back in the ’80s with her single Black Velvet. Radio brought her to the ears of listeners everywhere, but she never saw a penny from her record label. Dennis Anderson over at the Radio Business Report says it better than I could:

Amazing — a great smash hit like that got to number one and had tons of radio air play making millions for someone, but not a penny for her. It seems to me that radio did its job, but the record company did not. How many examples are there like this? Radio generated demand and sales by promoting a great record, but where did the money go?  When you examine the issue case by case, it becomes clear that relationship between artists and record labels is where the financial disparity lies.

There is a massive disconnect here. As a DJ I would often be besieged by artists and label reps who would mail me or bring in albums (and later CDs) begging for airplay. How many of those discs would never get attention if this was passed? Not many I would bet. Also, when was the last time you heard an artist complaining about their treatment at the hands of radio as opposed to the consistent news stories about artist battles with their record labels?

Just ask the surviving family of Jimi Hendrix….

Photo courtesy of currybet, used under its Creative Commons license

Opposition Mounts to “Performance Tax”

May 4, 2009


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, 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 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

George Strait Bucks “Performance Tax”

April 15, 2009

straitCountry and western superstar George Strait joined numerous other voices from the talent end of the music business in speaking up about the importance of radio. As the Recording Industry Association of America (RIAA) continues to pursue legislation demanding an unprecedented performance tax on songs played over the air, more musicians are stepping to the fore in support of free radio over their own recording labels.

Free airplay has been responsible for establishing the careers of musicians in every genre conceivable. Its impact on the careers of artists ranging from The Rolling Stones to Outkast is huge, and competition for play on the airwaves immense.

Radio industry trade publication, Radio Online, carries this report about an interview country music star George Strait conducted with Radio & Records magazine:

“You can’t take being played on the radio for granted,” Strait said. “There are only so many spots and many great singers out there wanting one. It’s a jungle out there.”

Commenting on Strait’s statement, NAB Executive Vice President Dennis Wharton said, “George Strait is the latest in a long line of recording artists who can’t thank radio enough for helping sell records. The straight truth is this: the record labels’ proposed performance tax would cause economic harm to local radio stations across America, resulting in less music and fewer artists being exposed to listeners.”

Much as we are seeing with the royalty fees being enacted on webcasting, many smaller stations will have to curtail or cease operation due to the added expense of a performance tax.

It’s important for musicians who have experienced the power of radio as a career builder to speak out. It’s also important for all of you reading this to support the Local Radio Freedom Act which opposes the RIAA’s proposed new fees.

Photo courtesy of cliff1066, used under its Creative Commons license

The Local Radio Freedom Act: It’s Vital

February 4, 2009


What would your reaction be if I said that the topic of this post is the potential loss of $400 million to $7 billion for our industry and how to hopefully avoid it? Good, I’m glad I have your attention now.

For over eight decades now, the music industry and radio have had a mutually profitable relationship, free radio promotion balancing the free content produced by the music industry.  Legends and fortunes have been made by many artists in this time as radio has driven likely fans to the check out counter albums/tapes/CDs in hand.  The fact of radio’s sheer reach drives this star making quality and the profits that come with it.

Unfortunately, the RIAA seems to now be taking issue with traditional broadcast in the same way that it has battled with streaming media (many examples of which are traditional radio stations that have expanded onto the web).

Now, as a new Congress assumes their seats in our nation’s capitol, the RIAA has set their sights on a new version of this relationship. One in which radio pays for the “privilege” of acting as a promotional medium for their artists’ works. As with the brouhaha about streaming, this is becoming a legislative battle.

In that face of a crumbling economy, this is dire news indeed. It could well deal more long- and short-term damage to the industry than anything the recession has provided so far. A direct tax of this nature would have ramifications throughout the industry. Staffing and formats would be majorly reconsidered. The entire business model would be subjected to a “ground up” rethinking as the fundamental axioms of the way we do business changes. In combination with the current economic factors, the prospect is frightening.

Here is a crucial call to arms from  Greater Media President/CEO Peter Smyth in his  “Corner Office” column this month (go read the whole thing, he is far more eloquent than I) :

We cannot assume that someone in Washington is going to ride to our aid; no industry group can fight this battle by itself.  It is going to take personal involvement by each of us, regardless of our job title, to let our local representatives in Congress know just how important it is to stop this ill-advised legislation.   Take a moment today to write or call your Congressional Representative’s office.  Ask them to co-sponsor the “Local Radio Freedom Act” (H. Con. Res. 244), which is being introduced in the US House of Representatives.    Tell them what it means for your industry, your job, your future.  For more specific background information, or to check and see who your local representative is, go to

It is not often that I relay a “call to arms” here. That is not the purpose of this blog. This piece of legislation, however, is something that can have a wide ranging and deleterious impact on our industry. Since one of our parent groups, the NAB, is supporting the effort, I feel it is perfectly appropriate to send out the call from this platform as well.

The Local Radio Freedom Act, make your voice heard about it today!

Photo courtesy of empirical perception, used under its Creative Commons license