December 1, 2015

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10/21/02 Wanna Be A Rock Star?
History repeats itself because we didn’t pay attention to it the first time. Is Radio about to repeat a dangerous piece of history, or will we awaken before it’s too late?

Joined at the hip, the music industry and the Radio business have always had a fragile love/hate relationship. And now it’s about to shatter. Armed with the powerful precedent of a big win against Internet Radio, the Recording Industry Association of America (RIAA) is insisting that you Radio stations pay a performance fee on top of the heavy ASCAP/BMI/SESAC fees you’re already paying. Considering the size of current Radio audiences and the average time spent listening, if Radio were required to pay even 25 percent of the current RIAA rates, there wouldn’t be a Radio station in America that could do it.

You say, “Nah, they could never pull that off.” Yet many people — myself included — said that about the RIAA’s collecting royalties for airplay on the Internet, and we got spanked like a puppy. As a matter of fact, my butt is still stinging from it. The RIAA simply convinced lawmakers that they were losing money and that the only “right thing to do” was to enforce the royalties. If you don’t think this can happen to broadcast Radio, think again.

But this movie has played once already. Let me tell you how it ended. In the late 1940s, the music industry demanded a royalty for every song played on the Radio. Radio responded with the logical argument that recording companies couldn’t exist if it weren’t for all the free exposure and advertising that Radio provided for them and their music. The battle heated up as the music labels demanded performance royalties. Radio wisely chose to not play any current, licensed music. Instead they played unlicensed music. Ever wonder how America was hooked on cha-cha, rumba and Latin Club, Ricky Ricardo and Xavier Cugat music? Its popularity was driven by Radio when there was nothing else to play.

Similar demands were made in Australia in the 1960s. In response, Australian Radio chose not to play any current music for a year. Once the new music stopped selling, the issue was quickly resolved.

We’re about to endure the most vicious attack that Radio has ever seen. Armed with their recent victory requiring performance royalties for Internet broadcasts, the RIAA’s next target is Broadcast Radio. Prepare to see the powerful RIAA lobby whining to our lawmakers on Capitol Hill that “Radio has had a free ride for far too long, and they should now pay a fee on every song, every time an audience hears it.” RIAA has already begun building its case and has approached some prominent individuals for help.

Broadcast Radio sat around and allowed the Internet Radio war to be won by RIAA. And now that same war has arrived in the homeland. It’s a war that Radio cannot afford to lose. But I’m not suggesting that we play polka music.

I’m suggesting that we hire our own performers and record our own hits.

Ever wanted to own a record company?
Let’s talk.

Eric Rhoads

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