As Labels Demand Higher Royalties, Radio Could Charge For Airplay

A NEW BRAND OF LEGAL PAYOLA

A battle is raging in Washington over requests by labels and artists to charge radio broadcasters more for playing music. Currently only the songwriter gets paid for the airplay via ASCAP, BMI and SESAC. Nothing goes to the performer.

Sounds unfair. But change often has unforseen consequences. Is now when radio is
faltering, the right time to ask for money or will it push more music off the air? And does charging more break the implicit promotional contract between artists, their record companies and broadcast radio?

Music Attorney David Oxenford  believes that new efforts to charge radio
more for playing music breaks the promotional “bargain” between labels and
broadcasters would be voided with the proposed legislation and put broadcasters "in the position where they could charge the labels or the artists
money for playing those songs and getting promotional value.”.

"If you get into the sort of situation where you have a performance
royalty, but you also give broadcasters the rights to collect money for
featuring music on the air without any sort of announcement that you
have to do now to avoid the payola rules, you’re going to make the
richest artists richer because, for example, if you’re a rock station
you can’t avoid playing U2. So U2 gets richer," the attorney told Hear 2.0.

"But the new artist who’s not a core artist or who doesn’t offer core
songs would be the one the broadcaster would need the pot “sweetened”
in order for it to receive airplay. And that creates exactly the wrong
incentives, I think, for the music industry and exactly the wrong
incentives for what Congress wants to create," he continued.

"I’m describing a legalized version of payola. You can do
this now; it’s just a matter of disclosure. All you’d be talking about
is, in the future, not having to disclose that you’ve been paid to play
a particular artist…"

"You know, when you go to the doctor’s office and the doctor
prescribes a particular drug for you, the doctor isn’t required to
disclose that he was just taken out to lunch by the drug company as
promotion to feature their drug. Or when you walk into the grocery store to buy some food and see the
big display of corn chips at the end of an aisle, the grocery store
doesn’t have a sign there saying that Doritos has paid for this premium
placement."

"For medicine and food, the basics of life, no disclosure is required
by law, but music, which everybody loves but isn’t life and death –
requires disclosure or you go to jail, and it’s kind of silly."

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