The struggling music industry has taken aim at a new revenue source — radio stations. After several years of sagging profits, much of it blamed on unauthorized digital downloads and file sharing, record companies are hoping a proposal in Congress to make radio stations pay them for the songs they play will reverse their fortunes. It’s a bad idea.
Since the advent of commercial radio in the 1920s, stations have played the latest tune, whether performed by Bing Crosby or Blink 182, and paid royalties to the composer of the song through the publishing advocates, American Society of Composers, Authors and Publishers, or ASCAP, and BMI, Broadcast Music Inc. The royalties are paid through a blanket licensing fee. Requiring radio stations to pay record companies for the right to play recorded music, as well as the composers of the songs, would have dire consequences for both businesses.
Suzanne Goucher, president and CEO of the Maine Association of Broadcasters, says the “Performance Rights Act” that would mandate the radio fees was co-sponsored by congressional representatives from Los Angeles, Nashville and other areas where record companies are based. A compet-ing resolution has strong support, she said, which suggests the proposal will not survive. But Ms. Goucher believes radio stations will be fighting off these sorts of ideas for the next decade.
Record companies have faced previous threats to sales, such as the rise of high-quality cassette recording devices in the early 1970s that allowed listeners to borrow a friend’s new record to make a tape of it. But with the new technology, the threat is more serious.
Tapes degrade over time, while MP3 files allow a perfect digital copy to be made. And rather than one-to-one sharing, file sharing can be done on a “one-to-millions” basis, Ms. Goucher said. “That has totally trashed the economic model” for record companies.
In addition to shutting down file sharing Web sites like Napster, record companies have sought civil damages from college students, including some at the University of Maine, for sharing files, evidence of how serious they are about fighting digital theft.
The rights of recording artists should be protected as strongly as ever in the digital age. But lashing out at radio stations, which introduce musicians to the public, is not the answer.
Like other businesses that rely on strength of the local economy, radio stations have been hard hit by the recession. “I don’t think there’s a station or station group [in Maine] that hasn’t had layoffs in the last 18 months,” Ms. Goucher said. Having to pay to play records would force further cuts, or a move toward all talk, news and sports formats.
Music lovers are rooting for the industry to emerge from the rough waters it now finds itself in, if only because it would create a broader range of music for sale, rather than the sure bets like Kenny Chesney and Miley Cyrus companies now back. Bleeding radio stations is not the way to profitability.