Wednesday, August 18, 2010

NAB Wants to Legally Require Buggy Whips

This time around, it's our friends, the music labels, that are performing their death rattles.
Under the current model, radio stations (well, over-the-air broadcast stations) get billed by the PROs (Performance Rights Organizations) to pay composers, but the labels don't collect anything.
Obviously this is because radio promotes music. It's free advertising.
Heck, in the 50's the labels would PAY stations to play their music so as to squeeze out competitors and independent artists.
Even though payola  scandals resulted in new laws, the practice is legal as long as it's disclosed. But that's not good for business so the labels continue to get caught secretly paying radio stations.

But now, the RIAA thinks Radio's free ride should end.

So with this threat in hand, the RIAA sat down with the NAB (National Association of Broadcasters) to come up with a proposal that they would love Congress to make into some sort of law.

Right now,  Radio and Music are both making money. Depending on the research you believe, they've never had a larger audience.
But Radio ad revenue is way down and new musical artists are opting out of the label system. So the end is coming.
Two threatened industries with lobbyists. This isn't going to go well, is it?

My favorite points from the joint proposal:

PERMANENT removal of CRB jurisdiction for terrestrial and streaming (Bold and caps, theirs)

The CRB is the "Copyright Royalty Board." Really? You want the pseudo-governmental agency responsible for setting your rates to just go away? 

Shocked. Shocked, I tell you!

Inclusion of radio chips on all mobile phones

Delusions of relevance.
I think this is the movie they are watching:

  1. Force every manufacturer to put a radio (presumably FM) in every phone
  2. Radio audience expands hugely and advertising revenue increases
  3. Radio stations grow and become predominant music distribution medium (see ya, Apple!)
  4. RIAA collects tons of royalties
A terrific tale of horror and suspense!
Let's pick at a few problems with this:
  1. If people wanted FM radios in their phones, manufacturers would already include them. The market has spoken, and most phones don't include FM radio
  2. One industry would get a law passed to force another industry to modify their products just to protect the first industry? Yeah. That's gonna happen.
  3. NAB states that radios are good from a "public safety perspective." Sure. But what's that got to do with phones? Why not mandate all wristwatches include radios? Why not issue free emergency band radios to every citizen? Why not short-wave radio? Should we require every phone to include a flashlight and a can of beans?

AFTRA issues resolved (agency commercial replacement on webcasts)

AFTRA is the main voice performers' union.
Part of the insanity in our current royalty-based system is the unions have rules which basically make it impossible to reuse the performance in some types of media.
I don't know the nature of the proposed resolution, but at one point AFTRA was saying that having a webcam in a radio studio changed the terms of employment.
AFTRA also claims that radio ads cannot be played on the Internet without additional performance royalties.
It will be interesting to see how they plan to resolve these issues.

These industries have built  legal and contractual walls to prevent competition from the outside.
But they've become so inbred that they cannot operate outside of those walls.

With every new content creator that opts out of the existing system the walls close in and the area outside of the walls gets larger.

Buggy Whip Photo by purpleslog

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