Radio Waves: 6/17/16

Radio May Lose Exemption to Paying Performance Royalties

Claiming that radio stations are getting a “free ride,” Democrat Representative from New York Jerry Nadler has proposed legislation that would force stations to pay fees for performance rights to record companies which would then compensate artists for the songs they play.

His argument: webcasters like Pandora pay such royalties; making broadcast radio do the same is only fair. Besides, he says, “the shortlist of countries that don’t (pay royalties) includes Iran, North Korea and the United States … it is a disgrace that needs to be remedied and it is well past time that we align ourselves with the rest of the free world,” he wrote in a letter in support of his legislation.

Interestingly, the reason radio has traditionally been exempt from such performance royalty payments centers centers on the exposure given to new music on the radio, which in turn introduces new music to the public and thus helps increase sales of records.

Indeed, the National Association of Broadcasters told record industry magazine Billboard “Local radio airplay has launched and sustained the careers of countless artists, while scores of artists have sued record labels for non-payment of royalties. It’s disappointing that Rep. Nadler wants to punish the number one promotional vehicle for the music industry — free and local radio.”

Which would be right … if this was 1965. Or even 1986. Radio in general stopped playing new music long ago, and ironically it is the internet and Pandoras of the world that expose many of the new songs. With rare exceptions, primarily stations playing country music, radio hasn’t launched a career or helped sell records in 20 years. So I find it somewhat ironic that it is webcasters paying the royalties when radio does not. Such an oddity.

Regardless, the fee structure would be tiered … smaller stations would pay as little as $500 per year; public and community stations only $100; religious broadcasters: nothing.

The State of Radio

Talk podcaster Tom Leykis ( sent out a link last weekend referencing a story in regarding radio listening habits in the United States, focussing on Millennials.

“In its latest ‘Share of Ear’ study, Edison Research discovered that one-third of today’s millennials don’t even own an old-school radio,” staff writer Jonathan Takiff explains. “And across the board, 21 percent of the U.S. population now gets by without one. That’s up from 4 percent in 2008.”

Unlike when Boomers were young and radio was the go-to entertainment medium, today’s young men and women tune in online stations, on-demand streaming services, or even satellite radio.

I personally love radio and the potential it has is unlimited. Thus, I find it hard to believe that radio is doomed. But turing things around with today’s ownership model in which the dollar is king will be exceedingly difficult. In fact, it probably won’t happen until today’s major group owners — Cumulus Media, iHeartRadio and CBS — are forced to sell the vast majority of stations and align to a forced limit of stations (my recommendation: no more than 20 nationwide). Those companies and their massive size created cookie-cutter stations and are THE reason listeners can basically do without radio.

The solution?

Give listeners what they want to hear. Make radio compelling. Play new music. Break new artists. Bring personality and entertainment back to radio. Limit the number of commercials so listeners don’t tune out. Actually compete against your competition instead of accepting mediocre ratings. Super-serve your local audience rather than programming as if your station was an iPod or worse, a nationwide affiliate network. Do what the alternatives cannot do: become a mass-appeal locally-based medium that unites listeners with creative content for which radio was once known.

It’s really not that hard. Programmers such as Ron Jacobs, John Rook and more showed everyone how to do it, and recordings are still available to hear exactly how it was done. Let’s turn the tide and, as the Nike slogan says, just do it.

Radio can be great again. Tomorrow, if good programmers were allowed free reign to do their jobs and personalities were allowed to do show their true talents. Or radio executives can just keep their heads in the sand and watch their stations wither and die.