My Wacky Performance Royalty Idea To Save Radio And Records From Killing Each Other
Written Aug. 13, 2010 by Tom Webster in Content + Music Industry with 5 Comments
As the Radio industry continues its inexorable march towards the payment of a performance royalty, I've observed emotions running the gamut from acceptance, to denial, and (in many cases) outright fury. However, as the ways in which the record labels can make money from recorded music dwindle, and as original, local content for radio stations continues to be engulfed by furniture-burning, there may truly be no more symbiotic relationship than radio and records. Radio needs music to make money; the labels need radio in order to make money from their music. This, as my Ph.D. scientist wife might say, is an example of "obligate mutualism": a symbiotic relationship whereby the value exchange between two organisms isn't just beneficial, it's required for survival.
As I observe the negotiations, I can't help but wonder what all of this says about music as art. That's right: art, not commodity. Call me an idealist, but the well-crafted pop song still gives me a little thrill. So does the final verse of Radiohead's "Videotape," the ethereal acoustics of Grizzly Bear's "Southern Point," the cascading voices of School of Seven Bells' "Sempiternal/Amaranth," and Neil Finn's mastery of form on "Don't Dream It's Over." I love music, and seeing the commoditization of recorded music makes me wince, even as I recognize it as inevitable.
Here's one thing I think we can all agree on: music, like any art form, has an intrinsic value, and an extrinsic value. The intrinsic value is a constant, but the extrinsic value ebbs and flows over time. Look what time has done to the extrinsic value of two contemporaries: The Dave Clark Five, and The Beatles. Look what happened to the back catalog of Michael Jackson after his passing. Consider other forms of art - take paintings, for example. When an artist is brand new and struggling, a sale of their work (no matter how gifted) might fetch "X" at their first gallery opening. Upon their second, they might be able to command "2X." After a 10-year body of work they might be worth "20X", and so on. After the artist dies, of course, artwork of great intrinsic value suddenly can take on extraordinary extrinsic value, as the buying public begins to value scarcity over other considerations. The same, of course, is true of sculpture, novels, and pretty much any art form you can name.
So, if we accept my basic proposition (recorded music is an art form), then the genesis of my wacky idea becomes a little clearer. The current speculation is that radio will agree to a blanket 1% performance royalty, but a "flat rate" that equates "Playground Of My Mind" with "Pride (In The Name Of Love)" seems derived from some pretty torturous economics. Instead, my modest proposal: let's let the labels set sliding "tiers" of value for their artists. New, unproven artists that the label believes in could be offered free of performance rights, while the next Lady Gaga might command the equivalent of 2%. Maroon 5 might be in a higher tier, while Yeasayer sits in a lower tier. Tiers would be based upon the artists' clear, demonstrated value to the labels (easily demonstrated by sales) with the potential for "discount rates" to promote back catalog releases (you know, like the movie industry does?)
Critics of this approach might point out the following flaws, which I freely admit:
1. Budget-crazy radio stations might choose to only play lower-tier artists in order to save money.
True. Luckily, there is this thing called "The Invisible Hand." It states, roughly paraphrased, that if you "supply" your listeners with too much music they don't want, they will "demand" to listen to your competitors.
2. The labels might "overvalue" artists for emotional or other non-rational reasons.
That's the beauty of a symbiotic relationship. If the fungus chokes the moss, the lichen dies - and vice versa. See #1 above.
3. Unproven artists won't make any money.
I submit that the opposite is true. If a .5% tier convinces a radio station to play more new, unproven artists, then those artists will a) sell more (that's kinda how radio/records work, remember?) and thus b) ascend quickly to higher tiers.
4. Record keeping would be insane.
Dude, it's 2010. Your music database software spits out numbers. Buy a computer and write a script.
Okay, there are other flaws, I know. Why don't you tell me how lame this idea is in the comments? I'm ready for you. :)
Reader Comments
Your 2¢, in chronological order — add your comment below.
When recession hits, it'll hit hard if commercial radio stations can't generate enough revenue to afford U2/Stereophonics/Maroon5 etc...
They won't play more cheaper music. I suspect that, at these times, commercial radio would still play top tier acts - but less of them, they'll fill more airtime with their own content i.e. phone-ins, onair competitions, DJ banter etc...
Which is actually bad for lower-tier acts, right? It's bad for listeners who are starved of variety too. And bad for radio stations who will prolly losing listeners when this happens.
Great idea. The labels won't go for it because it means they have to admit not all music is equal. They're in that tough position that a parent finds himself being of choosing among their kids. They can't say one is smarter than the other. That would stigmatize the others. As any youngest kid will tell you, it won't matter to the baby acts. They all know they're babies. But it WILL matter to the upper tiers, and differentiating among them will lead to problems at contract time. Take a look at pro athletes.
The other issue is the feds have a rule that prevents money from playing a part in musical decisions on the radio. A station must say they're playing a song because of financial consideration. That hurts their credibility.
The biggest problem in all of this royalty mess is that spins will take on even more value than they had in the past. While a spin now just results in chart position, the royalty will equate spins with money. When that happens, all hell breaks loose. Labels will only sign artists that release radio-friendly songs. Artists will only record songs that are likely to garner airplay. All musical risks will go away. None of the artists are thinking about any of that now. All they see are potential dollar signs. Maybe they should talk to the songwriters about the way royalties affect their work.
Tom
I think this is one the best ideas I've heard yet. In this debate, obviously radio wants to sing the tune, "the labels / artists need us." In the case of a newer, unproven artist -- Owl City might be a good example -- this is true.
However, in the case of an artist like U2, or even better, let's say Bob Marley's back catalog, you can't rationally argue that those artists still need radio. The truth is, they don't. People are going to continue buying their music in one form or another, even if they are not played on the radio anymore.
And while one downside of your proposed system might be #1 above (budget squeezed radio stations only playing lower tier artists.) The upside of this is that radio stations would have an incentive to play more up-and-coming artists, thereby helping the labels more and for doing so, they pay little to nothing to the labels, because they are providing more promotional value to the label than the label is providing to them.
Tom,
Absolutely brilliant!
I can think of two other potential benefits:
1. Programmers will spend more time critically listening to bands that the record labels haven't put at the head of the curve. There are talented people out on the long tail, but we've been lazy about finding them - and beaten up by the record promotional machine when we stray away from the "priorities".
2. Because it would then really matter in a way that is measurable in dollars, programmers will be able to justify music research again. Playing the wrong music is not just vaguely wrong, but has a hard immediate cost to it. Research would be a tool for achieving the most audience satisfaction at the lowest possible cost.
See, Steve, there WAS a method to my madness :)
Thanks for reading.