This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.
Artist News Business News Legal
Billy Corgan joins US radio royalty debate
By CMU Editorial | Published on Wednesday 11 March 2009
More royalty disputes now, and one which has long since been settled across Europe, but which has been recently renewed in the US – the question as to whether terrestrial radio stations should have to pay to play music. Not what they should pay, mind, but whether they should pay anything.
Traditionally US radio stations, unlike their European counterparts, haven’t had to pay the record companies to play recorded music, but moves are afoot to introduce a statutory royalty. The moves are, in part, in response to the decline in record sales which, arguably, reduce the persuasive power of the traditional ‘promotional value’ argument used by radio stations – ie “we help you sell records so shouldn’t have to pay to use your music”.
As record sales cease to be the primary revenue stream for record companies and licensing income becomes increasingly important, that ‘promotional value’, although undeniable, becomes, well, less valuable (many in the music industry would argue that the ‘promotional value’ of airplay, especially for catalogue music, has never been anywhere near as great at the radio station owners would suggest anyway).
As previously reported, the Performance Royalty Act, which would introduce said royalty, was reintroduced into the US Congress earlier in the year (the original proposals having not reached their conclusion before Congress wound down for last year’s American elections). The music business has been very busy lobbying political types for their support for the proposals, though the incredibly well connected radio industry who, needless to say, aren’t that keen on the proposals, have been busy arguing their side of the case too.
There have been various tedious hearings on the matter in recent weeks, but yesterday Smashing Pumpkins’ Billy Corgan gave a testimony, meaning easily distracted onlookers like me actually tuned in to see what was happening.
Despite being no fan of the major record companies who will benefit most from this Act (especially not his original label EMI, who he’s always moaning about), Corgan said that it was simply unfair that artists, and their labels, received nothing from radio stations which had built their entire businesses around music the labels and artists had, respectively, funded and created.
Perhaps keen to ensure his own music got future airplay, the Smashing Pumpkin stressed that he appreciated the value of music radio, saying: “I was able to find an audience, in no small measure, because of the long support of my music by terrestrial radio. I am a big fan of radio, and am very interested in its continued health and well being. Terrestrial radio has helped me to discover many of the artists that became influential to my life and artistic pursuits. I by no means see them as the bad guy”.
But, he added, “From my perspective, this issue is one of fundamental fairness. These particular performances must have value to the stations or they wouldn’t be playing them. It is time to redress an outmoded, unfair practice that factors one participant’s needs over another’s. This legislation is simply a form of restoration to artists long overdue”.
The radio lobby, keen to not be seen as being anti-artist, argue that it is labels who screw artists, not broadcasters, by paying them only a fraction of the money generated by their record sales. If artists got a better deal from their label, they argue, then artists would more directly benefit from the record sales that radio airplay help to create. They add that the Act will make smaller independent radio stations commercially unviable, while arguing that bigger radio stations may be prone to play less music if the new royalties are created.
I’m not sure I buy any of that really, though if you run a small radio station that consistently champions good new music and helps launch new artists, and are then asked to suddenly hand out half your revenues to major record companies I can see why you’d be a bit pissed off. Though I’m not sure that radio station exists in America these days.
