Nasty Politics: The Art of Divide and Conquer

Australia, it seems, is not the only place on Earth where the recording industry is trying on a ‘Divide and Conquer’ strategy in its dealings with the radio industry.

As major broadcasters in the United States continue to push back against the music industry’s demands for legislation to secure the payment of broadcast royalties, some really divisive politics are hard at work in the back room.

With the passing of time, the radio industry’s lobbyists are getting ever closer to that magic 218 votes required to defeat the music industry’s Fair Play Fair Pay legislation, but ‘Big Music’ isn’t going down without a fight, and, the gloves have come off.

Analysts working for the radio side say that political sentiment for this year’s push against passing the bill, that would force broadcasters to cough up millions for music royalties, is well ahead of where it was at the same point in time during the music industry’s previous attempts to push through similar bills in years gone by.

They say the legislation now has very little chance of passing this year, but they’re not popping the champagne corks just yet.

It seems the big recording companies have been busily trying to drive a wedge between the ‘haves and have nots’ in the US radio business.

Instead of just lobbying politicians in the corridors of the Capitol, they’re now taking a different and more direct tack.

Music industry lobbyists are trying desperately to seduce small radio operators across to the ‘dark side’ by contacting the local broadcasters directly and telling them the idea of royalty payments on music is really only supposed to target the big boys in the market.

This ‘us against them’ letter, sent out to more than 3,400 small market radio stations across the US, claims that 75% of music stations would only have to pay $500 or less a year for artist royalties under the new Act.

Small market stations are considered to be those billing under $1-million a year.

Leading the charge to drive this wedge into the heart of the radio industry is MusicFirst, which represents many labels, artists and managers from its base in Washington.

MusicFirst says that under the Fair Play Fair Pay Act small stations wouldn’t be heavily impacted at all, so why don’t they just ‘see the light’ and ‘pal-up’ with the music industry against the real enemy - the big radio conglomerates.

So far, few, if any, US stations are believed to have swallowed the bait and the National Association of Broadcasters (NAB) says all radio operators, both big and small, have to stand united.

Circling the wagons, NAB’s Dennis Wharton warns small market operators that once the music industry gets their hooks into them, even in a small way, it could just be the tip of the iceberg.

Mr Wharton says if the current legislation were to go through it’s pretty certain that initial $500 royalty fee would quickly start to rise and the charges would ultimately threaten the viability of small markets across the American heartland.

This all starts to sound very familiar when you look at the situation back here in Australia.

Similar ‘take no prisoners’ tactics were being employed by the recording industry leading up the recent Copyright Tribunal hearings over the simultaneous streaming of radio stations.

This dispute has kept the streaming of most regional stations in Australia off the internet for nearly two years.

Special ‘sweetheart’ deals were allegedly sent to a number of individual regional stations from the recording industry, even though those offers weren’t being made generally available to all broadcasters.

Those confidential offers were allegedly intended to entice those targeted regional stations to break ranks from the ‘no-charge for streaming’ policy, which has been embraced by the commercial radio industry as a whole since 2013.

Understandably, these tactics infuriated Commercial Radio Australia, which like its American counterpart, is leading the charge to secure a fair deal on streaming for all commercial broadcasters.

‘Divide and Conquer’ tactics have been used successfully in battle for thousands of years, simply because they work so well.

There are many businesspeople, even within the radio industry, who will happily opt for self-interest over principle every time; all they need is the right offer in front of them.

The only real defence for the Australian commercial radio industry against these tactics is for station owners to hold the line and remain united.

Unions know a unified defence works very well and they’re masters at it.

United we stand. Divided we fall.

In this regard, radio industry bosses worldwide could well take a lesson from the union hymnbook.

Regardless of what comes out of the current American and the Australian royalty campaigns over the next few months, one thing is certain.

From the multi-national recording industry’s perspective, the fight will never be over while there’s still a single dollar on the table to be made at someone else’s expense.

When it comes to tactics for these international pit bulls, everything is fair game.