Stop Shouting, Start Talking

by Dave Koz, 02.08.2010

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Photo by Lori Stoll

As a recording artist and radio host, I’m fortunate enough to have two of the best jobs on the planet.

Working in businesses so closely linked has given me a unique perspective on how music is used on radio and how the music and broadcasting industries have benefited from their partnership over the years. So naturally, I’ve been closely following the debate about radio performance royalties and the pending legislation in Washington. As someone who has experience on both sides of this business, it seems like now is the right time to share some thoughts on the matter.

The arguments have been laid out clearly. Musicians claim their work is being used without permission or compensation; they’re right. Broadcasters claim the system has been mutually beneficial for decades and that radio cannot incur this added expense in the middle of a recession; they’re right, too.

But as is often the case in delicate legislative matters, clear-cut issues are rarely so clear-cut. As I see it, a performance royalty will likely be imposed in some form. The Judiciary Committee Chairs in Congress who oversee intellectual property support it, and both House and Senate Judiciary Committees have approved the bill.

Radio is the last business in America that is exempt from royalties, so most insiders say this is inevitable. The question is, how can it be implemented to minimize the impact upon the already struggling radio business, one that can ill-afford to take on this expense right now? And how can we ensure that smaller, independent and minority-owned stations don’t get irreparably harmed in this operational change?

Real input

I am not an expert in this arena by any measure, but having lobbied Congress on other issues, one thing I’ve learned is that Congress needs help to get it right.

For it to do its job properly, it needs the input of real folks who work in the businesses affected — in this case, musicians, labels and broadcasters. But the lack of dialogue between the two sides, represented by the musicFirst Coalition and the National Association of Broadcasters, is leading to an impatient Congress that will do it its own way — and that could be a disaster for those of us with a vested interest in this outcome.

So with respect to resolving this issue the right way, I humbly offer a few suggestions for moving beyond the current stalemate. No matter which side of the aisle you’re on — or which side of the dial you’re on — we should be able to agree on some basic principles:

1. Turn down the volume. To musicFirst, while it’s true that the U.S. is the only developed country in which artists don’t get paid for radio airplay, having the American broadcast industry equated to North Korea and other totalitarian states does us no good. It’s hurtful and unfair and it should stop. And to the broadcasters, let’s not cast the other side as “greedy foreign record labels.” That’s unfair too. The majority of this royalty will go directly to the artists, with the remainder divided up between major and independent labels — copyright owners who pay good old American taxes. Remember that while it does need to change to adapt to our current times, the relationship between radio and records has been a fruitful and mutually beneficial one for years.
2. Begin the dialogue. Only real negotiations will head off runaway congressional action. But as I write, the two sides have only met once, at the insistence of legislators. Dialogue is productive — it’s a start ... and shouldn’t require an act of Congress.
3. Accept that the performance royalty is inevitable … but let’s make sure it’s implemented in as painless a way as possible.

First and foremost, radio should insist that collections not begin in the middle of a recession. Broadcasters will need time to adjust with a delay or ramp-up over time.

Fees could be discounted to take into account the significant promotional value that radio provides and has provided artists and labels for decades.

Small radio stations should be capped in their royalty payments at a mutually agreed upon level.

And finally, Congress should help radio achieve its other legislative initiatives that will help the broadcasting industry boost revenue while it takes on this new expense. This could even be the flashpoint needed to turn the business around and actually improve it significantly.

Even Gordon Smith, the NAB’s CEO, was quoted as saying the issue has become “so tiresome to members of Congress that they'd give you a lot to get rid of it.” Radio can work with Congress to make this beneficial for all.

All of this is easier said than done, of course. But nothing will be accomplished until both sides get in a room and begin talking. If we — musicians and broadcasters — don’t take matters into our own hands, Congress will “fix” our business for us without our input.

So to both sides of this battle, I urge you to work it out, and let’s do it soon. I may be the host of a music radio show, but on this issue, I’m asking musicFirst and NAB to adopt a “talk format.”

The author is a six-time Grammy nominee and multi-platinum pop instrumentalist. He hosts an afternoon radio show distributed on the Smooth Jazz Radio Network as well as the syndicated “Dave Koz Radio Show.”