Thread by @future_of_music

THREAD: one factor leading to low payouts on streaming services is that the market is distorted by competitive services that pay artists nothing at all. At the top of that list is FM radio. This impacts every artist, even those that would never get radio airplay.

Artists love noncommercial, public, college, community stations that serve their communities with diverse music and news programming, but they may never give commercial radio much thought. It's easy to understand why.

Since the 1996 telecommunications act, we've seen rampant ownership consolidation in radio broadcasting, and with that, more and more cookie-cutter playlists, homogenous formats, less diversity, and less local music.

When you fire all the local DJs and replace them with out of town robots, this is basically what you can expect to happen. So it's understandable that artists wouldn't worry much about a medium that's unlikely to ever play their music.

There are still some local commercial stations out there doing their best, but it's hard to compete against big companies with centralized programming and ad sales operations. Trump's FCC even eliminated the rule requiring a studio in the city where the station broadcasts!

The FCC majority made this and other moves at the request of the National Association of Broadcasters, whose team of lawyers and lobbyists is constantly pushing for de-regulation.

Another focus of NAB's lobbyists for decades has been the performance right on AM/FM radio. Almost everywhere else, musicians are paid when their record is played on the radio, but in the US, radio stations aren't required to pay performers a cent.

Radio does pay the songwriters/publishers, but not the recording artist or sound recording copyright owner. You might think this only impacts big stars who get FM radio airplay (Justin Bieber's doing fine!) but it actually impacts every recording musician. Here's why:

1) The people missing out on royalties aren't just stars. It's also session musicians and backing vocalists, people whose names listeners never learn, and who don't get any promotional value from radio. No one buys a t-shirt from the guy that played trombone on a Bruno Mars song.

2) because of international law, as long as the US doesn't pay international artists for plays of their music on US FM radio, other countries don't have to pay US artists when their music is played abroad. And radio is more diverse in other countries...

A US jazz artist might not get much airplay in the US, but they might get much more on French radio. A US folk artist may be popular in Belgium. But because US law is screwy, those artists are missing out on international royalties.

3) perhaps most importantly, different music services compete against each other. Prices and rates offered by one service impact prices and rates on other services. When FM radio pays nothing it puts an artificial downward pressure on the market for recorded music everywhere.

Competing services like satellite radio or digital streamers can point to radio and say "at least we pay something more than zero!" and thus get away with offering all artists worse terms and lower rates than they would otherwise.

How do NAB's lobbyists get away with this? How have they preserved this inequity for decades, making billions selling advertising while not paying recording artists a cent?

1) Part of it is that NAB lobbyists scare small broadcasters into believing that paying royalties would put them out of business, sometimes misleading their own local station members on how much royalties they'd have to pay under legislation that would fix the issue.

They organize big lobby days where they fly out local station reps to speak with Congress. But for a lot of local stations, they spend more on the plane tickets and hotels than the station would actually have to pay in royalties!

This is a lot of money! Of the 5,545 lobbying organizations tracked by Open Secrets in 2019, the National Association of Broadcasters ranked #20 in lobbying spending! opensecrets.org/orgs/summary?i…

2) They also have the structural benefit of having stations in every district, where musicians tend to be more concentrated in certain geographical areas. (This is one reason why musicians who don't live in NY/LA/Nashville should build relationships with your representatives!)

3) They capitalize on popular misconceptions about what it means to be a working musician--they're wealthy, it's not real work!-- and act like the legislation would only help big stars in mansions. They contrast this with the plight of radio industry workers.

Radio industry workers *are* facing real pressure, but that's largely a function of ownership consolidation & dereg within the radio industry, predatory behavior by private equity, and monopoly issues in the broader ad-tech marketplace. It's not because of music royalties.

4) They beat up on record labels, and falsely claim all the money will go to the big bad labels, and wont make it to the artists. Look, we've been as critical of bad behavior by labels as anyone over the years, but this claim is just not true.

This line gets trotted out all the time (@RonWyden and @EFF made similar false claims about the pre-72 provisions in the Music Modernization Act). It's breathtakingly cynical, using past exploitation of artists to perpetuate exploitation of artists by others today.

The goal is that $ will be collected and distributed by @SoundExchange, as with digital radio. Half of those royalties go to performers. The other half goes to the sound recording owner (sometimes a label, sometimes the artist herself).

5) Finally, NAB lobbyists claim radio's promotional value justifies the lack of compensation. But everything an artist does in 2020 is promotional for everything else she does! Promotional value can be considered in negotiations, but it doesn't mean it should be free.

Back when we had live touring 😢the tour promoted the album and the album promoted the tour. Both incurred costs, and both generated income streams. Band T-shirts are promotional, but they aren't mandated to be free by the government!

So what should we do about it?
1) Whenever streaming royalties are discussed, we can take the opportunity to talk about FM radio royalties too, and help folks understand that NAB's lobbyists are part of the reason Spotify checks aren't bigger.

2) We can continue to push for legislative fixes to close the FM performance right loophole. We can insist on direct payment to artists through SoundExchange, equitable and transparent splits, and affordability for small & noncomm stations.

3) We can halt any further consolidation and deregulation of radio at the FCC. With new leadership, the FCC can set a new agenda that refocuses on its mandates around diversity, localism, and fair competition.

4) We can support private equity reform to curb some the extractive business practices which have endangered local radio. And we can support antitrust interventions (like the current suits against Google & Facebook) that would help restore competition in ad-tech.

5) We can be mindful of the ways that these problems especially impact black and brown folks, from musicians whose labor is exploited by overwhelmingly white radio executives, to local communities who've lost minority-owned media outlets in the march to consolidation.

6) Finally, we can remember to support truly local radio. If there's an independent local station you love, consider advertisting/underwriting. Noncommercial stations could use your year-end pledge drive contributions.

Radio still has incredible potential, as a live, local, and connective medium that no algorithm can replace. We're gonna keep fighting for that in 2021 and beyond.