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Nancy Pelosi for Performance Tax - chargeradio - 04-17-2010 08:33 AM
http://thehill.com/blogs/hillicon-valley/technology/92489-pelosi-to-music-industry-you-have-an-army-of-advocates-in-congress
Right now broadcast radio stations only pay royalties to songwriters, which can be anywhere from a few cents to a few dollars per spin depending on market size, time of day, and audience share. A number of broadcast radio stations who are on thinner ice financially will likely move away from music formats if their royalties increase, although I'm sure stronger stations will survive.
My internet station (http://www.grey.fm) had its number of free listening slots cut back 60% by Live365 to the last royalty rate increase for Internet radio. That raised the rate from the 2005 level of $0.000768 per song per listener to $0.0008 in 2006, $0.0011 in 2007, $0.0014 in 2008, $0.0018 in 2008, and $0.0019 in 2010. As an example, if I have 40 listeners who hear 15 songs in one hour, my liability for performance royalties is $1.14 for that hour alone-an that's in addition to the songwriters' royalties.
Broadcast radio stations who stream online are exempt from some of the additional royalty liabilities.
RE: Nancy Pelosi for Performance Tax - Owl 69/70/75 - 04-17-2010 08:42 AM
If it moves, tax it.
If it keeps moving, regulate it.
If it stops moving, subsidize it.
RE: Nancy Pelosi for Performance Tax - Claw - 04-17-2010 09:16 AM
Actually, I don't have a problem with this one.
This isn't a tax increase. It is a royalty increase. The money does not go to the government. It goes to the artist.
How much does an artist make?
RE: Nancy Pelosi for Performance Tax - chargeradio - 04-17-2010 09:29 AM
Actually, Claw, the money goes first to a PRO (ASCAP, BMI, SESAC, etc.), who deducts their expenses, and then to the artist (if the artist has no label), or the label.
Note that the graphic didn't include songwriting royalties-even if the artist who recorded your song is upside down with their label, you still get your cut as the songwriter.
RE: Nancy Pelosi for Performance Tax - Motown Bronco - 04-17-2010 11:06 AM
Quote:She then turned to healthcare, noting 44 percent of artists lack health insurance and most artists are struggling without the financial backing of a full-time employer.
As with anything, it's a choice. Aspiring artists, actors and musicians have made a decision to pursue this "creative, entrepreneurial spirit" path for decades. You struggle to get your big break, earn low inconsistent income, have to live in studio apartments, eat cheapo food on the run, and own a beater car.
But they can pretty much dress and act how they want, do their "work" drunk or high with little repercussions, live a bohemian lifestyle, sleep in every day, create their own schedule and be relatively free of demanding bosses. It's all a trade-off of pros and cons.
Thing is, you can still find regular work during the day, and meddle with screenwriting software, attempt to write a book, or play in a band on evenings and weekends. It's how most of the small amateurs do it.
RE: Nancy Pelosi for Performance Tax - ETSUfan1 - 04-17-2010 11:29 AM
Artists ought to feel lucky that radio stations even play their songs. Now they want stations to pay them even more. Rediculous.
I work in radio. It won't put my station out of buisness, but smaller stations will have to do something.
RE: Nancy Pelosi for Performance Tax - RaiderATO - 04-17-2010 12:07 PM
(04-17-2010 11:29 AM)ETSUfan1 Wrote: Artists ought to feel lucky that radio stations even play their songs. Now they want stations to pay them even more. Rediculous.
I work in radio. It won't put my station out of buisness, but smaller stations will have to do something.
I wouldn't put this on the artists. The songwriters get paid (almost) directly right now from their songs being played. It doesn't filter through the label and their advances/recoupables.
These performance royalties (paid by bars, restaurants, music venues, etc.) go through these Performance Rights Organizations (PRO) then to the labels, then to the artists. However, with most "non-U2" type artists this money will go exclusively to pay off an advance (money given to an artist to record, live, etc. before any money is made off of them) and its a very small % of artists that ever see money from performance royalties. BUT they'll always get their full cut of songwriting royalties.
Radio was given free access to these songs by the labels as a "win-win". Radio advertises my songs, and makes money off their own advertisements. The RIAA has been scrambling for close to a decade now on how to make their current MO continue to make money, rather than changing with the times and technology.
Its pretty complicated to learn all this stuff, and Chageradio is throwing an extra kink in there when talking about internet radio (you get more government involvement, and this ratcheting royalty rate). I almost want to have a quiz before you can comment on music business threads because things work VERY differently than the layman thinks.
This isn't a tax, it's lobbying by the RIAA so they can more easily make back money spent on these artists. However, I believe it will lead to fewer independent stations, and fewer variety of music. Unless indie labels opt out of this (which if they can, I think they would because they've mostly shifted to the "new" way of business), you could see their airplay drop significantly, even after the recent headway they have made into pop music.
RE: Nancy Pelosi for Performance Tax - blah - 04-17-2010 02:09 PM
I am seeing stations in my area change format to eliminate this problem, going to talk style radio. I think it sucks....
RE: Nancy Pelosi for Performance Tax - smn1256 - 04-17-2010 08:37 PM
The government should stay the f'ck out of this. The playing of music over the radio should simply be some sort of agreement between the radio station, the record label, and the artist. In other words, let the market sort it out. What's next, taxing the music played at ball games and malls?
RE: Nancy Pelosi for Performance Tax - RaiderATO - 04-18-2010 03:54 PM
Quote:What's next, taxing the music played at ball games and malls?
This is already done. It is not a TAX. It is a royalty. They are paying to use the music. That's why elevator music is so crappy, because it's made, and sold to be used royalty free.
This royalty collection is the mission of ASCAP, SESAC and BMI. Walk into a bar/restaurant (BWW's comes to mind) and look at the door for their stickers. These places have purchased bulk/group licenses to play all music represented by ASCAP/BMI/SESAC etc.
There are even laws dictating how many speakers you can have, depending on the size of the room, and play the radio for no charge. One too many speakers, and you need to pay. (See why we need a quiz before posting in music business threads?)
RE: Nancy Pelosi for Performance Tax - smn1256 - 04-18-2010 09:16 PM
Raider, that's some good info, but the bottom line is that everyone is entering into voluntary business arrangements instead of being legislated into being told what to do.
RE: Nancy Pelosi for Performance Tax - chargeradio - 04-18-2010 09:24 PM
The fundamental question is, does the music industry received the proper amount of benefits from radio airplay under the current royalty arrangement, or should radio pay more in royalties?
Obviously if you're EMI you need the money (EMI recently reported a loss of 1.7 Billion GBP), but one argument that broadcasters are making is that three of the four biggest labels are based overseas-do we want the federal government effectively directing millions of dollars overseas every year?
RE: Nancy Pelosi for Performance Tax - RaiderATO - 04-18-2010 09:51 PM
(04-18-2010 09:16 PM)smn1256 Wrote: Raider, that's some good info, but the bottom line is that everyone is entering into voluntary business arrangements instead of being legislated into being told what to do.I agree with you. If I do a little reading, I can probably find out the "why" behind the government involvement.
Each label should be able to come to an amount (which could vary by song even, becoming a total pain in the ass). That way the radio station would play either the cheapest songs (indie songs/labels maybe?), or the songs that would get them the most listeners/ad dollars. It shouldn't be the govt's job.
(04-18-2010 09:24 PM)chargeradio Wrote: . . . three of the four biggest labels are based overseas-do we want the federal government effectively directing millions of dollars overseas every year?
I don't think this is a big enough issue. Visit Nashville, NYC, LA, Miami, Atlanta, and tell me that they don't run a good chunk (if not all) of each city, and they have fingers dipping into plenty of other cities.
The best argument is going to come from the public. If the public is worried about a streamlining of their music (the majority won't be) because of the added cost, then they should protest. But I have a feeling the RIAA has more clout over Congress than any public protest that could be generated for this cause.
RE: Nancy Pelosi for Performance Tax - Claw - 04-18-2010 10:40 PM
If you don't come up with some way of paying musicians, you aren't going to have anything worht playing on the radio.
RE: Nancy Pelosi for Performance Tax - RaiderATO - 04-18-2010 11:02 PM
(04-18-2010 10:40 PM)Claw Wrote: If you don't come up with some way of paying musicians, you aren't going to have anything worht playing on the radio.
Like I said earlier, very few artists will see this money directly. Indirectly it could help labels take more chances on artists, but knowing what I know, I doubt that will happen.
Musicians are paid. Not always handsomely, but they're paid. They can get hundreds of thousands of dollars up-front to record an album and if the album never makes money, they still don't have to pay it back. Labels front the cost of living and recording (among other things) to a band with the hope that they can recoup their investment from what the artist earns. Once the artist breaks even with the label, they start getting this performance money. They will directly receive songwriting royalties if they are the songwriter too. The label cannot touch this money.
Labels have survived without money from radio forever. Radio has been viewed as advertising for the songs. They even PAY to have their songs played, and its not illegal (as long as the station publicizes this payola). It was a mutually beneficial agreement between radio and labels, the question now is if it still is symbiotic.
RE: Nancy Pelosi for Performance Tax - Claw - 04-18-2010 11:31 PM
Raider, you don't get it.
This is about doing business without the labels. It's about a new paradigm.
RE: Nancy Pelosi for Performance Tax - georgia_tech_swagger - 04-18-2010 11:32 PM
(04-17-2010 08:42 AM)Owl 69/70/75 Wrote: If it moves, tax it.
If it keeps moving, regulate it.
If it stops moving, subsidize it.
Well damn. I don't have any more rep points to give you.
RE: Nancy Pelosi for Performance Tax - RaiderATO - 04-19-2010 12:15 AM
(04-18-2010 11:31 PM)Claw Wrote: Raider, you don't get it.
This is about doing business without the labels. It's about a new paradigm.
You're right, I don't get it.
So you're saying:
-Dude writes songs
-Dude hires his own musicians (if not already in a band)
-Dude records independently (in his basement, or in a lower tier studio), often sacrificing quality for cost.
-Dude handles his own promotion, advertising, etc.
-Dude books his own tour dates
-Dude handles merch. sales
-(Don't forget dude is performing and being creative too)
Summary: Dude is getting all the reward, but is also incurring all the risk and outlandish expenses that come with the profession, all while being an accountant, musician, poet, event planner, salesman, etc.
So, dude decides to hire someone to handle some of this. He also wants to record a higher quality record, so he applies for a loan to record with a REAL producer, recording engineer, mixing engineer, and mastering engineer. He now has interest to pay on the loan, along with his other responsibilities.
So, he hires a manager to handle some of the above material. He has to pay his manager too.
To me, it looks like a better deal for 98% of the artists out there to be associated with a label (which is pretty much what this guy has amassed between his loan, manager, engineers, promoters, agent, etc. etc. etc.).
If that's not what you're saying, then I'm sorry for whoever read this (and myself for writing it).
RE: Nancy Pelosi for Performance Tax - Paul M - 04-19-2010 06:17 AM
(04-18-2010 11:32 PM)georgia_tech_swagger Wrote:(04-17-2010 08:42 AM)Owl 69/70/75 Wrote: If it moves, tax it.
If it keeps moving, regulate it.
If it stops moving, subsidize it.
Well damn. I don't have any more rep points to give you.
Then give 'em to Ronald Reagan.
RE: Nancy Pelosi for Performance Tax - Claw - 04-19-2010 08:23 AM
(04-19-2010 12:15 AM)Raider_ATO Wrote:(04-18-2010 11:31 PM)Claw Wrote: Raider, you don't get it.
This is about doing business without the labels. It's about a new paradigm.
You're right, I don't get it.
So you're saying:
-Dude writes songs
-Dude hires his own musicians (if not already in a band)
-Dude records independently (in his basement, or in a lower tier studio), often sacrificing quality for cost.
-Dude handles his own promotion, advertising, etc.
-Dude books his own tour dates
-Dude handles merch. sales
-(Don't forget dude is performing and being creative too)
Summary: Dude is getting all the reward, but is also incurring all the risk and outlandish expenses that come with the profession, all while being an accountant, musician, poet, event planner, salesman, etc.
So, dude decides to hire someone to handle some of this. He also wants to record a higher quality record, so he applies for a loan to record with a REAL producer, recording engineer, mixing engineer, and mastering engineer. He now has interest to pay on the loan, along with his other responsibilities.
So, he hires a manager to handle some of the above material. He has to pay his manager too.
To me, it looks like a better deal for 98% of the artists out there to be associated with a label (which is pretty much what this guy has amassed between his loan, manager, engineers, promoters, agent, etc. etc. etc.).
If that's not what you're saying, then I'm sorry for whoever read this (and myself for writing it).
I hear you, but in today's reality, the dude has to do all of that stuff before a label will look at him anyway. By that time, he may decide he doesn't need the label.