Radio: Are we on the “Eve of Destruction”?


Australia is not alone in its fight against the music industry, who wants to have its hand deeper in the pocket of commercial radio.

It seems the music industry is on the march around the World, and, the fight is nowhere more prominent and public than in the United States.

For many years US radio stations have been paying songwriters a fee for playing music, but not the artists themselves.

At present, there’s no royalty charge for playing music in the biggest commercial radio market in the World.

The concept has long been accepted that an artist, who records a song, benefits directly from the publicity derived from its airplay, and this, in turn, drives their sales and popularity, and, by direct extension, attendances at their live performances.

This arrangement worked just fine, up until the time the music industry realised it had screwed up its business model by not adapting to marketing in the digital age.

Now, they want others to pay for their mistakes both here and in the US.

As in Australia, the music industry in the US has decided its best course is to turn viciously on its previous allies in commercial radio and is now lobbying politicians, of all persuasions, to force American radio stations to pay up for music use.

Clearly, they figure hitting up the radio stations to fill their profit shortfall is the fastest way to generate a buck.

I guess it beats having to go out and actually market your music to end consumers!

Here in Australia, the international record companies have “lawyered-up” in a big way in the hope of locking down a windfall profit from the Copyright Tribunal for internet streaming, and, as far the foreign owned interests are concerned it’s a case of “screw the viability of the Australian broadcasting industry”.

In the US, however, the broadcasters are really fighting back.

In the US House of Representatives, 218 votes are required to block any bill from passing through the House, and, the National Association of Broadcasters’ lobbyists are determined to get to that magic number and hold back the tidal wave of fees for broadcasters that would follow.

So far, the NAB has secured 191 supporters for the Local Radio Freedom Act, a non-binding resolution that opposes any new performance royalty for radio.

At this stage, it is not known how many politicians are currently supporting the Free Market Royalty Act, which is being promoted by the music industry, but there are quite a few of them.

So, it’s “game on”.

Week by week, the numbers of politicians opposing any new royalty are growing, when they realise the impact that their local communities would suffer through reduced radio services once the music industry got their financial teeth into the local radio stations.

Each year, it’s a fact that many commercial stations in the US experience financial woes and turn off their signals for good.

It’s called ‘going dark’.

It’s also called ‘going bust’, and, small and medium sized stations shutting down across the American heartland because of additional financial pressures, like royalty payments, is not what politicians need in their local constituencies, if they want to get re-elected next year.

The issue in Australia has been dressed up as a different cat.

Right now, the dispute is about internet streaming royalties, but, everyone in the industry knows that’s just a smoke screen for PPCA’s main objective - the lifting of the current 1% royalty cap for over-the-air broadcasts.

If PPCA can get that cap lifted there’ll be virtually no end to how much of commercial radio’s revenues they can get their hands on.

It’ll be a non-stop money-grab of biblical proportions.

That’s the point we’ll start seeing some Australian stations ‘going dark’.

Unfortunately, while many local politicians fully empathise with the dilemma facing the US lawmakers, the power to do something about the current Australian dispute, before the royalty situation gets completely out of control, vests in just one man’s hands.

Malcolm Turnbull.

Despite constant pleas and lobbying from local coalition politicians, who are now being blamed by regional Australian voters for the internet streaming debacle, the Communications Minister remains intransigent.

Mr Turnbull seems to have some block-headed notion that “everything is going to work out just fine” complete with a fairy-tale ending.

What he doesn’t seem to get is that international record companies are accomplished ‘gutter fighters’.

They don’t care about Australian radio or the people it employs or the industry’s viability or Australian politicians for that matter.

The only thing they care about is how big the company bottom line is back in their home countries.

For any Australian artist to be so deluded to think that the action currently being undertaken in the Copyright Tribunal is a magnanimous gesture to ensure local artists get a bigger ‘slice of the pie’ is just naive in the extreme.

Foreign-owned media companies are masters of creative bookkeeping.

Moving money about in a “now you see it, now you don’t” conjuring act is how they survive and prosper.

If they can so easily keep a large slice of their locally-generated profits away from the ATO, as Joe Hockey claims, how do you think individual Australian artists are going to fare?

What is really in the best interests of Australian artists is to ensure we have a strong and viable commercial radio sector to continue to promote their music.

Unfortunately, the course that is currently being pursued by the music industry worldwide is akin to the Cold War adage of “mutually assured destruction”

This blog was previously published on radiotoday.com.au

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E: bsmart@smartradiogroup.com.au

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