“I Gotta Feeling” – The False Dilemma of the Performance Rights Act

Unlike most controversial issues facing the American government (and by extension, the American public) today – like, for instance, health care, or the war in Iraq, or the precise inflection and flavor of racial profiling, or the precise means by which the King of Pop happened to meet his death – the current debate over the payment of performance royalties by radio stations to recording artists is one almost entirely free of nuance. There are two clearly delineated sides, with very clearly articulated agendas: the recording artists themselves, represented by the likes of Nancy Sinatra in a recent New York Times piece, who argue that actual vocalists and musicians, and not just songwriters (and, it should go without saying, publishers) should receive royalties when a song is played over the radio, arrayed against the radio stations themselves, who have argued perhaps more pervasively, if less convincingly, against doing so by broadcasting their opposition across their own airwaves. Both sides, not coincidentally, make use of the term “free” when advancing their positions (Sinatra’s column is titled “Radio Free America,” and the chief opposition websites is dubbed the Free Radio Alliance, with a petition circulated by way of a website called FreedomSpeaks). Between these two  positions lies almost no equivocation; none of the discussions of relative trade-offs concurrent with the health care debate, and none of the gray areas governing any potential change in military strategy in Iraq and Afghanistan. If health care is analogous to Vietnam, then the “radio freedom” movement is somewhere more along the lines of Star Wars: two obviously delineated sides, with plenty of ammunition, and with everybody decked out in matching uniforms to boot.

And yet perhaps the issue isn’t quite as black and white as either side would have you believe (certainly neither can claim a monopoly on the word “free,” can they?). I’m certainly no great cheerleader for the radio conglomerates, at least not since the heyday of Clear Channel Entertainment, and I’d likewise argue that their wounded, desperately hip television and radio ads tend to come off as mildly disingenuous, but it’s likewise possible that they have something of a point; they just happen to be making it poorly. Point by point, Nancy Sinatra’s article is grounded on two primary arguments. Foremost, of course, is the heartstrings approach, reminding us that singers and musicians “create something when they perform,” and thus should be compensated at least as much as songwriters when “their creations are played on the radio.” On this front, however, Nancy Sinatra is perhaps not the best person to be advancing the cause. As she points out, her father, Ol’ Blue Eyes, fought tirelessly to secure royalty rights for musicians… largely because he himself didn’t write a majority of his own songs. And yet we still all know Frank Sinatra’s name, don’t we? It’s still Frank Sinatra whose 1993 Duets album would sell some 3 million copies. It’s still Frank Sinatra whose greatest hits album, at $18.99 retail price, is well within the top 200 music albums sold on Amazon.com. (And, not to sound bitter, but it’s also still Sinatra who owned his own record label, Reprise Records, which he turned around and sold to Warner Bros. just three years later.) And yet drastically fewer people would be familiar with the name Abel Meeropol (also known as Lewis Allen), or even singer-songwriter Paul Anka, who wrote “My Way.”

Yes, obviously Frank Sinatra and Tony Bennett and Britney Spears are the reason why each and every one of their appropriated hits have reached posterity, yet its these same performers who reap the lion’s share of benefits from ticket and record sales. It’s likewise these artists for whom radio play translates to publicity, which likewise translates to enhanced ticket and record sales. Nancy Sinatra anticipates this latter argument, holding that “[m]ost of the music played on AM and FM radio is at least two years old,” but why should that matter? Yes, my local rock station pretty much sticks to classic rock standards, but wouldn’t granting these artists additional subsidies simply ensure that the rich get richer? Nancy Sinatra actually does her side of the argument a grave disservice by pointing out this very statistic. Those bands that do break into mainstream radio are inevitably those bands with the potential for selling out larger concert venues in their own right, and thus do have the most to gain through any added publicity. Bruce Springsteen still tours. The Rolling Stones still tour, despite having produced no original material in years. When Frank Sinatra retired from performing, he was 80. If most radio music is outside of the immediate Top 40, then those who would benefit from additional royalties shares are the already entrenched, old guard musical establishment. Every time I hear “Born to Run,” I’m a little bit closer to wanting to see the Boss perform in person (okay, maybe not), and yet granting Bruce and company additional royalties will in no way ameliorate the fact that my local alternative band can’t even secure airtime in the first place. Nancy Sinatra’s refusal to acknowledge that radio play goes hand-in-hand with  success makes it seem as though she’s standing up for the little guys, but the stagnification of commercial radio is completely unrelated to the compensation doled out to those who’ve already “made it.”

The second component of Sinatra’s argument is perhaps more reasonable, holding that terrestrial radio stations are currently the only broadcast platform exempt from paying artist royalties in the first place. Satellite and online radio stations all pay to host artists’ content, and as Sinatra points out, even “AM and FM radio stations that stream their signal online pay performance royalties.” Yet saying that standards are inconsistently applied doesn’t necessarily mean that the standards make sense in the first place. Lots of things are poorly or irregularly regulated (like, I don’t know, the banking industry). But more to the point, this also, strictly speaking, isn’t true. The royalties payments associated with hosting Sirius/XM satellite radio are paid by consumers themselves as part of their subscription fees. Satellite radio providers make royalties payments because they themselves are extracting fees from their constituent listeners. And yet radio remains free to listeners, is entirely supported by advertising revenue, and remains the functional definition of a “public good.” Sinatra’s reference to online radio, the only comparably free broadcast medium, is itself a relatively poor one, since its collective operating capacity has been virtually crippled by the Copyright Royalty Board’s original 2007 ruling mandating artist royalties payments. This is where the “free” in Free Radio Alliance comes into play. Despite the fact that many radio stations are owned by big, scary media conglomerations, like newspapers, these big, scary conglomerations aren’t actually that profitable, hence Clear Channel’s 2005 decision to jettison Clear Channel Entertainment, thereby creating the now much-maligned Live Nation. Clear Channel itself, cited by Sinatra as “the nation’s largest radio station operator,” posted a 21% decrease in revenues from the previous fiscal year (PDF). Because radio stations are a relatively linear enterprise, the only conceivable way to offset the added costs of new royalties payments would be to dramatically increase advertising rates (a not all-too promising option, since Clear Channel owes its current woes to increased “competition for advertising dollars”), or else to encrypt their signals and to charge listeners for access to content. This would potentially leave more people unhappy than just Axl Rose and friends.

That’s not to say that radio broadcasters are blameless for their present predicament, but if as indicated, this issue is perhaps more nuanced than originally suggested, what then are the possible solutions? There’s a reason that the shift in royalties structures is being pushed not just by artists themselves, but by their respective record companies as embodied by the RIAA (Nancy Sinatra, for what it’s worth, falls more into this latter camp than the former; she independently owns all of the rights to her own music). As this week’s New Yorker (and their notorious fact-checking department) holds, “album sales are almost half what they were in 2000” (full article available by registration). Finding a new revenue stream becomes a way to offset these losses. Yet in the same way that perhaps terrestrial radio shouldn’t have remained entirely dependent on advertising revenues, perhaps the largest flaw in the RIAA’s own structure lies in the very way in which it attempts to distribute music.

Way back in 1965, The Who first found international success by releasing a host of singles, from “I Can’t Explain” to “Anyway, Anyhow, Anywhere.” Even when the hit single “My Generation” premiered on a full studio album in 1966, The Who continued to release their new music in single format (with “Substitute,” “I’m a Boy,” and “Happy Jack”). A few years earlier, The Beatles had launched the “British invasion” doing much the same thing, recording a handful of hits and packaging them together as smaller collections. Part of the reason that later successes like Tommy (1968) or Sgt. Pepper’s Lonely Hearts Club Band (1967) are so iconic is that they mark a deliberate break with this earlier model. Tommy, a rock opera, launched as a concept, with each song progressing in a logical sequence in accordance with a certain plot. What we now think of as “a concept album” was, at first, the primary means for distinguishing an album itself.

Today, although the “concept” component has largely fallen away, albums remain the dominant means of distributing new music; because production and distribution costs for any CD, regardless of length, are more or less static (as opposed to full vinyls versus 45s), singles simply aren’t as profitable to produce, especially given that they can’t be sold for nearly as much. This is why most recording artists tend to produce what is known as “filler,” generally inferior tracks that are unlikely to ever be performed live or over the radio, and yet are included on an album anyways, all in service of padding the album’s length. All the same, the real money still lies in covertly producing singles, or at least in producing hits: these are the songs that get radio play, that draw fans to concerts, and that get commemorated with their own videos on MTV. Clearly the RIAA understands this, given their recently implemented variable pricing deal with Apple’s iTunes store, whereby the standout hits from a given album are priced at $1.29 rather than the previously standard $0.99. If record sales have fallen off precipitously, it’s because fans realize that there’s no reason to pay $13.99 retail for a physical disc containing the Black Eyed Peas’ now ubiquitous “I Gotta Feeling” when they could just as easily pay $1.29 to secure the song digitally; $12.70 is a lot to pay for 14 additional songs you might not have heard of, and might not even like to begin with, although if “Ring-a-Ling” becomes the next number one hit, I’d be tempted to retract that statement.

The iTunes variable pricing plan has only been in effect since April, yet if a 15% increase in revenues per song sees any net increase in sales revenue, then the lesson for the RIAA, for recording artists, and for Nancy Sinatra is clear. Rather than trying to hold onto residuals from songs more than two year’s old (thanks, Nancy), perhaps artists should stick to what they already do so well: producing a handful of hits and releasing only those for public consumption. Will decreasing the number of songs released in a given year somehow stifle the artistic impulse? One might imagine that it would simply increase the quality of artistic output, but why not ask Ryan Adams, who realizing that normal production schedules couldn’t keep pace with his rather prolific output, instead opted to stream 11 wholly original albums from his website. Or just look at the lyrics for “Ring-a-Ling,” and then you tell me.

Continued in Part II

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