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What if Radio Paid Like Pandora Pays?


Set aside for a moment radio's long standing love affair with artists and labels, dating back to the beginning of musical time, when it was a big deal for an artist to hear their music played and promoted on a local radio station. Certainly times have changed. The call in recent months has been about establishing a fair playground for everyone who distributes music. Radio is no longer the only way and everyone understands that. Assistant Professor of Business Administration at Washington and Lee University, David Touve has calculated that if "Big Radio" had to pay what Pandora has to pay for music, "Big Radio" would owe billions.

Here is a quick look at how Touve came up with his numbers. You can also check out his blog post HERE for more detail. In his analysis he estimates 9, 12, and 15 songs per hour and uses Arbitron's published estimates of the US Listening Audience (aged 12 and greater) at various times of the day, which he places at around 8.8% of the 12+ population.

"And so, at 12 songs per hour given an average radio listening audience throughout the day of 8.8% of the population age 12 and higher, so-called "Big Radio" would owe $2,469,294,195 (at the rate of $0.0011) in royalties for the performance of sound recordings if treated like a pureplay webcaster."

"If "Big Radio" were treated like a default webcaster, at 12 songs per hour given an average radio listening audience throughout the day of 8.8% of the population age 12 and higher, that "Big Radio" would owe $4,714,107,000 (at the rate of $0.0021 ) in royalties for the performance of sound recordings."

(10/25/2013 11:09:24 AM)
yrqAbm I think this is a real great article post.Much thanks again. Cool.

- NY
(11/25/2012 8:21:13 AM)
Few would argue that fairness across platforms - AM/FM/Shortwave/Online/TV/Movies or the local peeler-bar - is not an unreasonable outcome for all concerned.

What I have never understood and I mean - forever - is why the artists have never participated in these royalties. That so sucks for someone who didn't write or publish the tunes.

- Ronald T. Robinson
(11/23/2012 9:28:53 PM)
OK, Sitll noone wants to look at this realistically. Everyone is living in the fantasy world that radio is over. It has be pronounced dead more times then some recenet celebrities by unifomrmed bloggers. To simply look at this from a royaly point of view is like looking at company cash flow only from the income side and ignoring expenses,

Point one: Anyone who thinks any webcaster can influence music purchases like radio is dellusional.

Point Two: If you balance the sales and promotional effect of radio air play against potential royalties, it is realistic to compute than the arist would owe more than ten times the royalty bill even offset by the royalty bill.

Point Three: The real issue hear is that the record companies have yet to come up with a fair share with artists. They now want to stick radio with the bill.

Point Four: All the pressure should be broght on ASCAP and BMI to share the fees broadcasters already pay in an equitable manner.

- Frank Zappala
(11/21/2012 6:12:23 PM)
If big & little stations charged the artists/record companies to play the music there would be no music on the radio and music radio would be a stinking corpse.

Meanwhile, I still am missing how an internet station based in, say, Belize, would be charged by anybody else because residents of this or that country went online to hear some tunes. I mean, who gets the invoice and who has the authority to collect?

- Ronald T. Robinson
(11/21/2012 2:42:24 PM)

And if big and little artists and big and little record companies had to pay regular advertising rates to get their recorded product advertised, exposed and promoted, as all other companies pay to advertise their products and services, they would pay billions in advertising dollars to big and little radio stations.
I say equalize the artists and record companies with all other companies and charge them regular advertising rates to advertise, expose and promote their recorded product.

- Tony Coloff

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