AM and FM radio stations don't pay artists or musicians when their music is played over the air —- not a single dime, not for a single song.
That's because there's a loophole in U.S. copyright law that allows radio stations —- which make $16 billion a year in advertising revenue —- to use artists' property without paying them.
Satellite, cable and Internet companies pay royalties to artists, so why are AM and FM exempt? Is that fair?
I've spent my career fighting for fairness and have long championed the rights of the underrepresented. I believe it's crucial that we preserve, protect and enhance black radio, and all radio and media for that matter.
But contrary to what radio stations are telling listeners, this bill —- which is not law —- will not shut down black stations nor would it destroy black radio.
Instead, it would help artists of all stripes, who for years have been denied their just compensation.
Sure, radio promotes artists, but should that shield them from paying for a product they profit from?
The NFL benefits from having its games broadcast on TV —- pushing fans to attend games and buy merchandise —- but stations pay billions for those broadcast rights.
How is this different?
The bill would establish equity for recording artists —- paying fair compensation for their creativity, while mitigating its economic impact.
The legislation would require radio stations to pay royalties to artists, but the issue is being manipulated by corporate interests.
They're telling you this bill would "murder black radio," but I and other members of the Congressional Black Caucus made sure it accommodates small, minority-owned radio stations.
Stations with less than $1.25 million in annual revenues —- which is 75 percent of all stations nationwide —- would pay just $500 a year for all the music they play. Smaller stations would pay $100 a year and public radio, college radio and nonprofit religious radio stations would pay less or nothing.
There is also consideration of the recession, and no payment will be required from stations that make less than $5 million annually for three years.
The ads would have you believe they cannot afford to pay performers, but when radio executives who make millions in bonuses tell you we are taxing or killing black radio, take a closer look.
This isn't about radio or Congress —- it's about fairness —- fairness to the artists whose music is played for free.
The United States is among only a handful of nations —- including China, North Korea and Iran —- that do not pay royalties to performers. AM and FM stations here do pay a fee to the writers and composers of the songs, but not the performers.
All other nations pay royalties to both the songwriter and performer of music.
Contrary to what they'd have you believe, this bill would not send money to foreign "fat-cat" record labels, but the legislation guarantees royalties are divided evenly between artists and copyright owners —- including minority-owned and small record labels.
Recording artists have tried to buy airtime on these stations to tell their side but have been refused. Ask yourself: Why?
If we're trying to "kill" black radio, then why does the NAACP, the A. Phillip Randolph Institute, the Leadership Conference on Civil Rights, the AFL-CIO and the Communication Workers of America, among many others, support this bill?
This is a simple issue of fairness.
By Ricky Fitzpatrick
I was driving to work and heard something on the radio urging listeners to voice their discontent over a proposed "radio tax" bill. Not much more info than that, but they gave a Web address, and since I'm one, no fan of additional taxes and two, a local radio true believer, I checked it out.
The bill is officially known as the Performance Rights Act, although I prefer the more appropriate "Radio Killer Act." I'm shocked, but not surprised.
How can I put this? This bill sucks.
What it boils down to is this: Record companies have encouraged this bill because they have a twofold problem. One, they have insatiable appetites for money (much like our government).
And two, they've lapsed into a cultural coma because they haven't stayed marketable enough to be profitable. And now they want someone to pay for their stupidity.
In a nutshell, they're short-sighted so they're losing money to tech-savvy consumers who want to download music to their phones and laptops and Apple iPods and not go to a store and buy a grossly overpriced, ultra-high-profit piece of plastic that has one song that consumers like and 17 that sound like crap.
So the bill proposes a "performance tax" be collected from radio stations so artists can be properly compensated.
When I read that, my first reaction was to throw up.
Then I got mad.
Let me clue you, in case you don't know. Performing artists do not receive "compensation" (aka royalties) for airplay. But they do receive royalties from things like music sales. That includes CDs (or any physical medium), downloads, ringtones. They get a cut of concert revenues, T-shirt sales, the list goes on. But you get it, right? Did you know they also get compensated every time someone buys blank recordable media? Like a cassette (yes) or a CD-R?
So just how much more "compensation" do they need?
Oh, did I mention that the record companies will be keeping a portion of the collected monies as "administrative" fees for overseeing their distribution?
Of course they will.
Now songwriters, on the other hand, do receive compensation for airplay, albeit pennies per use. But they thankfully do get it as well as a small cut of music sales.
As a songwriter, I had airplay of a song a few years back. My first. And my first royalty check was all of $5.86.
I didn't even cash it.
So at the end of the day, what does this mean for you? For me? For the average American radio listener?
I mean, does it hurt us? Will we have to pay to listen to the radio? Will we have to pay part of this tax?
We won't be paying this tax, directly. But if the stations have additional expenses, then they have to have more advertisers, which translates to less music. Eh, most likely though, that won't happen.
Probably the station will just go up on ad rates. Then the advertisers will be spending more to run ads, thus increasing operating costs so they have to charge more for their goods and services to make up for it. And who pays for that?
Feeling your pocketbook puckering up now? Yeah, me too.
But some stations won't be seeing either of these scenarios happen. Some simply won't be able to bear the burden of the extra cost (or pass it to their advertisers) and they'll just fold and go off the air.
Bottom line: This bill is bull. And I say "bull" because I'm censoring myself.
If the record companies want to collect money from radio then let them fight it out like big boys and girls. But don't get Congress to pass a new tax law. Come on, that isn't fair.
Keep Congress out of it and let the consumer decide if we will bear the brunt of an additional fee. If not, then suck it up and get creative, fellas.
But if this bill passes, then it's not just shame on them for pushing it, but shame on you and me for allowing it.