For radio, talk of royalties is in the air
Congress is considering whether to impose musician royalties over what's played on FM radio. Jeremy Hobson looks into whether airplay still helps record sales and how Capitol Hill feels about the potential new business model.
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TEXT OF STORY
Scott Jagow: Today, Congress holds a hearing on the business of radio. Specifically, royalties for playing music. Jeremy Hobson reports from Washington.
Nancy Sinatra: You keep sayin' you've got somethin' for me.
Jeremy Hobson: A lot's changed in radio since 1966, when Nancy Sinatra released her hit "these Boots are made for Walkin." Even the song's changed a bit, thanks to Jessica Simpson.
Jessica Simpson: You keep sayin' you've got somethin' for me.
But one thing hasn't changed -- it's still free for FM radio to play those songs. They don't have to pay royalties to musicians, as satellite radio and radio stations in other countries do.
Sinatra: I don't think that's fair.
That's Nancy Sinatra, who will be making the case on Capitol Hill later today for a royalty requirement. She doesn't buy the argument that radio play leads to record sales.
Sinatra: Most of the time when I listen to the radio, I don't hear them mentioning the artist or the musicians or any of that, so I don't see where the promotion is.
Dennis Wharton: Well that's interesting, cause we just released a study that proves without doubt that radio airplay generates enormous revenues for record labels and for musicians.
That's Dennis Wharton with the National Association of Broadcasters. He says royalties could cost the industry as much as a third of its annual ad revenue.
Wharton: This is a dire threat to the radio business.
Wharton's argument seems to be resonating on Capitol Hill. Already, almost half of the House of Representatives has signed a resolution against imposing royalty fees on radio broadcasters.
In Washington, I'm Jeremy Hobson for Marketplace.
Comments
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From UT, 06/12/2008
I own part of a small company which handles Bands on the Internet as for the copyright fees, we support them as long as the fees were fair. Currently to play a copyrighted song we must pay a fee plus another fee per listener and then a percentage of the money we make off any advertising. We believe that has gone to far and that the record labels should not be entitled to add our Advertisement revenue to the copyright fee. This total cost adds up to over 50% of our revenue and by the time its all over it could reach to over 80% of our revenue.
So now because of this cost we do not play or even deal with any copyrighted material.
It seems to us that if all copyrighted material was no longer being played that there would be no copyrighted songs sold.
06/11/2008
We own a small bar and this rotalties issue is a mess. There are 3 companies that represent the musicians and we contract with 1 of them and we can not play music that is represented by the other companies. So the bands that play for us, we must review their play list and if someone want to hear something by Kansas to bad cause we are not with the company that sponsors them. It cost $2000 per company and just think how many bars are out there. But to make matters worse not all bars have been contacted to pay. These companies harass and threaten law suit against you that would shut you down. How much money do those stars make? It truly is all about how much they can make. You know if I did not hear it on the radio I would never have heard it to want to hear it again!
From Bluefield, WV, 06/11/2008
Why shouldn't artists get royalties for performing the song? After all, it's their voices and talent that sells the song. Bravo to Nancy for standing up for what many believe is the right thing to do.
From Las Vegas, NV, 06/11/2008
it would be interesting to know how the royality issue works. It used to be that radio stations paid a fee per "needle drop".I don't know if the performer received any of this fee or if it was just the composer and publisher. I believe that whatever fee is collected, a part should go to each.I agree with Miss Sinatra, I don't hear who the artist is on a majority of music played on FM stations.
From Newark, DE, 06/11/2008
It would be worthwhile to note in the story that songwriters and composers do get royalties on FM radio play. In the example provided, Lee Hazlewood's estate does receive revenue from both Ms. Sinatra's and Ms. Simpson's individual performances when they get radio play. The way the story was worded, it makes it sound like the radio stations can play for free, which is simply not true.
06/11/2008
It would be great to have a story on how rotalties work, Use something like Phil Collins "In the Air" because that song is always on the radio.
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