Thursday, March 12, 2009

WCLV's Performance Tax Fight

WCLV Foundation classical WCLV/104.9 president Robert Conrad has certainly been outspoken on other topics before...so it's no surprise to see him making noise on an issue that could cause serious problems for music radio stations.

In case you haven't heard, the music performance industry is lobbying Congress for radio stations to be charged performance royalties when they play songs...in addition to the music publishing fees stations already pay to BMI, ASCAP and other such organizations. And that doesn't even count the fees WCLV and all other stations pay to stream music on the Internet.

Conrad exhorts his listeners to make their voice heard against what he calls an "unfair and potentially debilitating performance tax", in a letter posted to the classical station's website:

It would transfer massive amounts of money from WCLV and other stations to large record companies, most of which are foreign owned.

Moreover, the financial impact of the Performance Tax could be devastating—especially at a time when the advertising that supports WCLV and its classical music programming is at an all-time low due to the recession.

WCLV is presumably in better shape than most commercial stations, due to the big 2001 deal that funded the WCLV Foundation, designed to keep classical music on the radio in Cleveland.

In the "Great Cleveland Frequency Swap of 2001", the station downgraded its signal from 95.5/Cleveland (now Salem CCM "The Fish") to 104.9/Lorain, but got a decent amount of money for the move. (And by the way, AllAccess incorrectly identifies Salem as WCLV's owner.)

But the small station presumably can't live off that money forever, and still depends on advertising revenue...which, as noted, has basically dropped through the floor for all commercial stations, and for pretty much every other media outlet.

Conrad supplies a letter for listeners to weigh in with lawmakers about the "Performance Rights Act", which is being proposed in Congress as House Resolution 848...urging those lawmakers to instead support the alternative "Local Radio Freedom Act" (H. Con. Res. 49)....

3 comments:

YEKIMI said...

And who will the record companies blame when this puts their sales in the totally in the tank? I can see most station sswitching to non-music formats to avoid this mess. If I heard or hear a song on the radio and I liked it I ran out to buy the album or CD or [lately] downloaded it. With this move, record/music companies are commiting economic suicide because if I can't hear it before hand I'm certainly NOT going to buy it. So go ahead Warners/EMI/Atlantic/etc. slit your own throats with this "performance royalty tax", drive yourselves out of business, I don't think many consumers will miss you when you're gone. The only way I could see the radio companies fighting this would be to demand a cut of the tax if or when they could prove that their playing a song caused the public to run out and purchase a CD or dowenloaded it, because at that point they could take a "What's in it for me? Why should I play YOUR artist's music when I get NOTHING in return financially?" attitude with the record companies.

Energy said...

They've been doing this to internet radio for years. It was only a matter of time.

gpriddy said...

The recording artists and labels think they see a new revenue stream here.

Yekimi is right; we'll see a reduction (maybe not a complete loss) in the number of stations that can afford to play music over the air. That will mean a reduction in the amount of free promotion for records, which will lead to a further decline in record sales.

They are pounding the last nail in their own coffins. You want to save the record industry? Make better music: http://roflrazzi.com/2009/03/16/celebrity-pictures-paul-mccartney-talented-vinyl/

P.S. The argument goes that stations charge for airing advertisements, but get their content (music) for free. Following that logic, at the very least there should be an exception in this bill for non-commercial stations.