Posted on 07/01/2021 4:51:30 PM PDT by Kaslin
At a recent press event featuring recording artists Dionne Warwick and Sam Moore as special guests, Reps. Ted Deutch (D-FL) and Darrell Issa (R-CA) introduced the American Music Fairness Act, a bill that would require radio stations to pay performers when they play their songs.
In a press release announcing their new legislation, Deutch said “paying people for their hard work is the fair thing to do.” Similarly, Issa said, “they are the true owners, and we need to protect their rights.”
Longtime readers of our columns know that promoting fair and free markets for American consumers has always been our top priority. Why, then, don’t we support this bill? Well, while “paying innovators for their work” sure makes for a good soundbite, like most things in Washington, there is more to the story.
The free market in the music industry has been broken for years. The top three record labels already control far more than a majority of the nation’s recorded music market, and one of the nation’s two antitrust enforcers, the Federal Trade Commission, found that these label behemoths are not constrained by any of the normal competitive market forces.
Many concerned members of the recording artist community argue that the labels’ unchecked market power has resulted in the record labels spending less time and money promoting the up-and-coming performers they represent. In fact, less than half of the money ever reaches the artists as the big guys manage to siphon away royalties. That’s the inherent problem with market concentration: they almost always lead to less choice and inefficiency. Unfortunately, however, the overzealous tentacles of the American Music Fairness Act will further distort the market to favor the big record labels and the most successful recording artists.
The bill proposes mandatory, government-set fees on local radio stations, determining what performers should be paid, but it ignores the fact that many performers might consider the free advertising they receive on radio critical to the commercial success of their songs to the point that they would forego such a fee if it meant a higher likelihood of airplay. If it were not for existing laws, others might be willing to actually pay radio stations, knowing that radio exposure would equate to more sales and touring revenue. While I am certainly not advocating that we repeal the payola laws, philosophically, it is blatantly anti-free market to suggest the federal government should mandate set fees no matter what performers think and not even permit artists to negotiate the value of the airplay they seek.
That is the biggest problem with this bill – it is a covert way to enrich the labels and richest performers at the expense of the music industry’s middle class. After all, if a radio station has to pay either way, why would it take a chance on a new performer when it could instead play a proven hit maker.
As the biggest labels get bigger and the richest performers get richer, startup labels and new performers would have a harder time promoting their music and penetrating the market, which would lead to diminished consumer choice and a decline in the overall health of the music industry.
Most of Congress understands this concept. That’s why 149 bipartisan members of the House of Representatives have already signed onto Local Radio Freedom Act, a resolution that sounds opposition to new performance fees on radio airplay.
Perhaps one day, there will be enough political will to create a freer and fairer market in the music space. Until that time, however, Congress should avoid proposals like the American Music Fairness Act, which will only introduce new bureaucracy and skew us further away from a free market.
Hesh Rabkin, call your office!
Now that terrestrial radio is just about dead…let’s throw them a bone.
Eating the seed corn is never smart.
They used to make their money off of record sales that were generated by radio play, didn’t they? Isn’t that where “pay for play” came from?
Greatest TV Series, Ever!
You make your money now from getting on movie and TV soundtracks.
One of the best things about The Sopranos, was the music they used, I ended up getting a lot of the songs from the show that I never even heard before.
Airplay leading to sales is such a longstanding and absolutely fundamental part of the music industry that it's astonishing if they didn't consider it.
So...minimum wage for records?
I’d love to see more vintage movie and TV cue and incidental music come out.
Granted, it’s a niche market and my wishlist will probably stay just that.
The recording studios used to pay top DJs under the table, to play songs they wanted to promote. That practice — payola — is where ‘pay-for-play’ originated, and it is now illegal.
Record companies allowed free-play of their music, in return for the publicity. That’s why DJ’s (I was one, in a small market, for a few years.) were required to either intro, or extro, every tune they played — so that people could rush out and buy the record. As others have noted, that system doesn’t work well any more.
What isn’t clear in this discussion is that songwriters have been paid royalties for decades on their recorded songs played on the radio. Performers who do not write their own songs have not been paid for radio performances.
Performers have been paid handsomely for their live performances (concerts) and that is how they become wealthy.
While the Beatles had a Ringo Starr hit with the earlier hit version by Buck Owens of “Act Naturally,” it was songwriters Johnny Russell and Voni Morrison who earned the radio performance royalties (along with Buck Owens as the song’s publisher) on the song’s airplay.
Over 82% of the money from music today comes from streaming, not sales.
Radio airplay won’t pay the bills and neither will and physical or digital sales.
Streaming has replaced product sales and only the 1% see the money.
What ‘radio stations’?
I still listen to local radio for what amounts to Muzak, but there are very few Top 100 Hits type stations still functioning now. The days where the country enjoys the same kind of popular music at once are all but over. Sad but most likely true.
Most people under 50 get their current music from podcasts and shows on the internet. This brand new law is about 40 years too late to make a difference.
Sam Moore’s heyday was during the first President Johnson Administration, if not earlier.
“As the biggest labels get bigger and the richest performers get richer, startup labels and new performers would have a harder time promoting their music and penetrating the market, which would lead to diminished consumer choice and a decline in the overall health of the music industry.”
That’s been said so many times, and every time it was false.
Then, along came The Beatles, Rolling Stones, Led Zeppelin, Grand Funk, Nirvana etc.
And blew everything up.
The issue is the dearth of real talent. Not that somebody can’t get air time.
Having a manager like Peter Grant was definitely good for Led Zeppelin.
Grant used to go around record stores looking to beat up anyone who was selling Zeppelin bootlegs.
I agree. I never heard “Moonlight Mile” by The Rolling Stones until a saw a clip of that show where it was played as the background music for the closing scene on one of the episodes.
The “Dolphins” song by Fred Neil was my favorite.
YEP...PAYOLA
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