The way terrestrial radio stations pay for the music they play could soon be changing based on statements made yesterday by the US Register of Copyrights, Maria Pallante, as reported by Digital Music News. In remarks at the World Creators Summit yesterday, Pallante boldly stated that the US needed to “provide a full public performance right for sound recordings,” meaning extend the fee system already imposed on digital music services to radio stations who make bank selling advertising without directly compensating the artists it uses to entice listeners to their place on the dial.
How did this sudden change in public discourse come about? It seems that Pandora’s greasy-looking co-founder Tim Westergren got Congress involved in his negotiations with the music industry to try and reduce Pandora’s payment obligations in the the royalty scheme it had previously agreed to. His argument that it wasn’t fair that his company had to pay so much when terrestrial radio didn’t have to pay anything resulted in Jimmy Jam stepping in to note that this was indeed a shame, and that terrestrial radio really should be paying artists for their work. While this wasn’t Westergren’s intended take-away, it seems to have been enough to penetrate the wall of lobbying that Clear Channel and its ilk use to prevent change in the system from occurring.
If this new approach actually occurs and is enforced, it could change the way that traditional commercial radio stations operate. They’ll always be motivated by the profit that advertising revenues provide, but could this create a culture where labels keep the royalties they’re owed low in order to entice stations to play their artists? Exposure is really the driving factor behind the presence of people at shows, so a smart label could exchange the opportunity of higher royalty income for the prospect of gaining a wider audience. Though, this shift in mindset would need to move past conjecture, and while the government is good at making bold declarations these days, the follow-through is far less certain.