The Recording Industry Association of America filed a $7.1 billion lawsuit against the nation’s radio stations Monday, accusing them of freely distributing copyrighted music.
“It’s criminal,” RIAA president Hilary Rosen said. “Anyone at any time can simply turn on a radio and hear a copyrighted song. Making matters worse, these radio stations often play the best, catchiest song off the album over and over until people get sick of it. Where is the incentive for people to go out and buy the album?”
According to Rosen, the radio stations acquire copies of RIAA artists’ CDs and then broadcast them using a special transmitter, making it possible for anyone with a compatible radio-wave receiver to listen to the songs.
Funny parody, isn’t it? That seems to be the general reaction to it, but as I said, my brain is wired a bit differently. I look at it and think, why is it so absurd? Exactly why should radio stations be able to make money by playing free content?
The record companies are the perfect villains these days, but… for the sake of simplifying the argument, let’s say that all the royalty issues got settled, and the record cartel got broken up. Furthermore, let us assume that there were twenty record companies that shared 50% of the market, with little Indies sharing the other 50%. Finally, for this argument let us pretend that artists got 50% of the net receipts that record companies got.
Could you then explain why radio stations shouldn’t pay to broadcast content? Let’s look at the closest analog to this situation — television. Why shouldn’t NBC broadcast Friends, ER and Scrubs for free? After all, every time that they show an episode of Friends it is a free advertisement for the Friends DVD Boxset¹. Every Buffy episode is selling Buffy DVD’s. Sure, there is so much more money in the broadcast rights and the syndication rights. So what?
Why do you think that the radio megamedia companies make so much money? ² The investments in physical plant have already been made, the upkeep isn’t that expensive, and the content is free ³ (or sometimes they even get paid to play it). The only difference between radio and television profit schemes is due to how they evolved. There were LP’s before music on the radio got big. On the television side, show were playing for many years before the advent of video recorders.
So why is the Onion article so funny? I can see that it is. Sort of. I guess it depends on your frame of reference…
¹ A noprize to the first person to correctly explain the difference between a Boxset and a Boxed Set (yes, they are two different things).
² No, I’m not talking about Internet radio. While I do believe that the record companies have a right to charge radio stations for content, I’m not happy about their actions vs. Internet radio stations. In my opinion they should have worked with fledgling Internet radio stations to help them build up the market, and guarantee a future revenue flow instead of charging the kind of rates that shut them down. But shotgun to the feet is often the default stance of the RIAA companies to new technology.
³ OK, not free. they do have to pay royalties to the songwriter(s), but they don’t pay any performance royalties, which is what the RIAA is looking for.