No to HR 848

So much has been discussed about HR 848; the Performance Rights Act that it’s time for the Prime Minister to weigh in on the matter with a “No" to HR 848. I’ve read the opinions in support of HR 848 from musicFirst which ignited the concern over performance rights copyright/compensation. On the musicFirst website it states, “People who love music understand that creativity, talent and hard work are required to bring it to life. The goal of the musicFIRST (Fairness in Radio Starting Today) Coalition is to ensure that aspiring performers, local musicians and well-known artists are compensated for their music when it is played both today and in the future."

At first glance the aim looks good but when you research how the creators will get paid I have a problem with the mission. Almost every artist can tell you stories about how they have been swindled and beaten by record companies. The public has seen it glamorized in films like the Five Hearts Beats. Cadillac Records, and the Temptations. I wonder why in the world artists and musicians want the record companies to handle the monies again. Under HR 848 the revenues from the performance fee automatically go to the record companies which then distributes the money to the artist with the record company getting half off the top. It’s seemed under this relationship the “creators” are allowing themselves to be swindled again. That’s like asking the same person who has slapped you once to slap you again.

Let’s take a look at what is fair. When music is played on the radio the “creators” are being exposed to the public. They are getting free advertisement. Radio is the most immediate and personal of all mediums. If the song is a “hit” and let me make mention that not every song created is a hit. The record company benefits through the free exposure through increased record sales. Radio airplay increases music sales and performing artists and record labels profit from exposure provided by radio airplay. In fact, according to recent research, radio is providing the record industry with significant, incremental sales revenues or promotional sales benefit that ranges from $1.5 to $2.4 billion annually according to James N. Dertouzos, Ph.D.

The fairness in compensation I think should come from the relationship of the artist with the record company. Supporters of the Performance Rights Acts seems to have forgotten that that the free radio airplay leads to building the artist to the point where people are willing to pay for the music and anything else associated with the artist. The impact estimated from exposure to music on the radio is shown to be positive and significant for all music genres and radio formats. Each time an artist wins an award that artist says I want to thank Radio.

There is too much emphasis on what someone else is making as opposed to making sure you get the compensation from who is really responsible to compensate you. Artists are focusing on the 18 billion dollar revenue generated from advertising annually; well that revenue from advertising is not the same today. Advertisers are spending less on radio. And Radio stations are spending most of the 18 billion to service its own debt. Radio is not asking for or trying to get a cut of the artists share of concert revenue!.

Record companies failed to prepare and lost millions as the Internet ushered in the digital age. Does anyone remember Napster? The biggest seller of music today is iTunes. Music distribution has gone to bits! The record industry forgot to do their homework and did not invest in research to find and create new models to secure revenue in the digital era. It’s all about bits not mass CD’s.

Radio is not responsible for the lost revenues the music industry incurred due to Napster and other file sharing enterprises. The record industry wants to end and overlook the symbiotic relationship with radio that both industries profited from and make radio pay a performance fee. Presently radio pays nearly 500 million annually to writers and publisher. The record industry convinced several artists and politicians that the fair thing to do is ask Congress to review copyright law and make radio stations pay a performance fee for sound recordings because everybody on the Internet does.

I don’t know but to me that’s like holding a homeowner liable for an accident that occurred in front of their home. When the homeowner did not tell the driver to drive down his block or was the homeowner driving the car at the time of the accident. The driver and the insurance company are responsible. The compensation to the artist should come from the record company and the artist should negotiate performance compensation before radio plays the song .

The fair, present and future compensations the artist seeks should come from the revenue the record makes from sales and other promotions. The record companies are responsible for the artist losing revenue at the start of the digital era because the record company lacked future vision when the digital era arrived and did not invest in preparing to save and secure itself from losing revenues. It's not fair to radio that artists and record companies are allowed to create a compensation scheme to essentially make up for the lost revenue. An additional fee could motivate broadcasters to reduce the amount of music played. Such reductions would harm broadcasters, their listeners, copyright owners, and likely consumers of recorded music.

Supporters of the Performance Right Act also argue that other countries allow a Performance Fee. I don’t know the history of relationships of how other countries handle radio and the music industry. However, I will be arrogant to say this. No other country is as diverse as the US in regard to artists and the recording industry, therefore no comparisons or statements alluding to the fairness based on what other countries do in this regard are valid.

Another issue I have with the Performance Rights Act is how the performance fee will affect educational non commercial and community stations which do not allow advertising. . Most of these stations barely make it on their present budgets and this fee will cause many to cease playing music depriving the public of what little new and alternative music that is available on terrestrial stations. Many artists who are really trying to get exposed rely on the college, educational non commercial and community stations to build up their audiences. And it would seem by these stations ceasing to play music that would do more damage than good to the artist.

Incidentally, will mobile DJ’s club owners and restaurants have to pay this fee? That’s a sad state of affairs for the local DJ. I would be very angry with the performance fee. Today Copyright law is being challenged where anyone can will try to loop a loop in a loophole. Everybody wants to keep getting paid.

If I owned a radio station and this Act became law the first thing I would do is make it more costly for music to be played on the air. Somebody is going to have to pay for fee I have to pay, Right? New artists will undoubtedly have to pay more to get their music exposed. And that exposure will be for a limited time on radio. Artist with the oldies but goodies can forget it, there will be no more oldies shows it will be too costly to air oldies. So it looks like in the long run the artists both known and unknown will hang themselves if they support this bill. Radio should be exempt from the performance fee because radio was first on the scene. It's like radio is the founder of the organization. Founders have certain rights and exemptions until death and radio is a long way from death. With the new methods of distribution that the digital era provides artist should focus on trying to escape sharing revenue with the record companies.

With all due respect to the supporters of HR 848 the Performance Rights Act, I respectfully disagree and support H. Con. Res. 49 the Local Radio Freedom Act.

The Prime Minister