Friday, June 5, 2009

WHY BIG RADIO HAS MAJOR LABELS BY THE BALLS

WHY BIG RADIO HAS MAJOR LABELS BY THE BALLS

As big, US-based broadcasters get closer to shutting down the Performance Rights Act, a number of insiders are questioning why the bill was even drafted in the first place. Labels have been clamoring for performance compensation from terrestrial broadcasters for decades, and their current economic distress motivated the most recent push. But the Performance Rights Act assumes that radio stations absolutely need major label content, a tricky bet in the current landscape.

The National Association of Broadcasters (NAB) looks to be outsmarting the recording industry on the Hill, but the 'plan B' might have been worse. "If [the Rights Act] went down, you'd see a lot of radio stations stop taking calls from major label promotional departments," one influential radio executive told Digital Music News. "They would end their cooperation that day."

Why? The reason is that playing major label content would suddenly incur extra costs, on top of existing publishing performance royalties. That is something distressed radio stations desperately need to avoid, especially as advertising revenues continue to plummet.

But where would these stations find format-friendly artists and songs? According to a top radio consultant, the answer is right in their own backyards. Stations could start seeking smaller artists and songs from their communities, while demanding wavers against recording (and even publishing) payouts.

That actually sounds plausible given the huge number of artists wanting radio airplay - and the huge impact that spins have on sales and careers. "You might see radio get really local, really fast," the consultant relayed, outlining a more homegrown A&R approach that skips big labels entirely.

Actually, that effort would be vastly simplified by the internet - and nearly every major radio station has a companion site. Instead of going to clubs, programmers could solicit uploads and listen to MP3s of aspiring bands.

Other scenarios might also play out, though in the absence of a changed royalty requirement, the discussion remains theoretical. But despite a probable loss on the Hill, labels might be better off with the status quo - one that still includes homogenized playlists and heavy spins for major label artists.

SOURCE