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AG News:
Friday - 8/6/2010
Fading Facade in Radio
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It's one of those topics that nearly every radio industry trade magazine mentions, a meeting of radio executives at NAB's Washington headquarters to discuss performance royalty strategy. Former Senator, and current NAB President/CEO, Gordon Smith has to put on his best facilitator's mask to convince a group of NAB members that settling the issue in negotiations will be better than leaving it to legislation. The hope is that logical argument will win over a mindset based on the fabrication of the Performance Royalty Fee as a radio "tax" on music. The courting dance has already started.
In reading this story at numerous radio industry web sites I noticed a phenomenon. Not one publication refers to this meeting as a discussion of performance royalty "tax." Let's put this another way: The radio industry press is aborting use of a facade created to make people in the industry angry and have them create promotional announcements inducing public fear.
Relative to performance royalty, the word "tax" was created by former NAB CEO David Rehr and followed by his infamous "I'd rather slit my throat..." comment made at The Conclave in 2008. For the past few years, any mention of the royalty issue in a radio trade was inevitably attached to the word "tax." What a great sound-bite, but misuse of the English language. It was a facade built on semantics that took flight off a short runway.
As it turns out, repositioning "performance royalty" in the minds of those attending that NAB meeting is Gordon Smith's greatest challenge.
The urging to negotiate a settlement made by someone who comes from the legislative branch of government - and was hired as NAB's CEO specifically because of the knowledge that position bestows - is going to ring the ears of all meeting attendees. Acceptance is the only escape route the radio industry has.
To continue fighting against the payment of a performance royalty will leave radio in disarray, the argument made by Bonneville International CEO Bruce Reese only a few weeks ago, and rebuked by a number of high-level radio executives. Mr. Reese is correct, though.
Performance royalty is a payment leveled by the Copyright Royalty Board, a government body that's not associated with taxation but charged with creating an equitable payment for use of creative work by musicians. I don't like it any more than Saga Communications CEO Ed Christian does. Nonetheless, it is a reality in our changing world.
Hopefully a quick resolution will be found now that we see a lifting of the "performance tax" facade in the radio industry press. This is the chant that allowed the issue to get to a point where the only recourse is to settle and move on. The next step is developing a plan to soften performance royalty impact.
I have been working on a remedy that gives artists greater exposure to internet radio outlets through the use of waivers, which are allowed by the CRB's decision. The concept is not ready for prime time, though you can get the gist of it here (for radio) and here (for artists). My assessment in the early stages is that this approach is being embraced by both groups - and, yes, I am looking at how it may be applied to the radio industry at large.
The facade of a "performance tax" is past. It is now time to look at how radio can make best use of this climate change - then, move on.
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