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Wednesday - 2/4/2009
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Prediction: Performance Fees Moving to Radio


Touch your monitor while reading these words. Having been informed by Peter Smyth, we can now become empowered with knowledge and wisdom as the following "news" is uncovered. The energy source is a corner office in Braintree, Massachusetts, where enlightenment shines like a klieg light on former presidents, but dimly.

Our new words of cause: "The Performance Tax has once again reared its ugly head...." Peter Smyth has called it to our attention, which must mean the radio industry is in trouble.

"EA in this case means a person who's wanted to be a disc jockey or radio program director finally getting to run their own station." Mr. Smyth: I'm not sure where you have been looking since 2001, but there's been one heck of a fight for performance fees between the copyright royalty world and internet radio stations - which include your Greater Media stations that webcast.

I took part in many functions designed to draw attention to unfair copyright royalty payments - payments so out-of-whack with reality that they still threaten to close thousands of internet radio stations. Objections were voiced in Washington and online through a variety of venues, yet it's rather funny that no member of the broadcast community was present at any of them. (Most recently, at the last Digital Media Association meeting in New York City.)

There were meetings, rallies, and walks down the halls of Congress. We tried to convince House members that internet radio was getting screwed. We also made sure that broadcasters realized they were next on the target list if this copyright rate got passed.

On May 24, 2007, these words appeared at Audio Graphics: "SoundExchange already announced its intentions of pursuing broadcast radio for the same performance fees." Subsequent warnings were issued on June 14 and July 10, 2007.

If there was a time when broadcasters should have prepared for the performance fee fight, perhaps that time was back when the internet radio industry got its rear end handed to it by SoundExchange, via Copyright Board rulings. But you were quiet back then, Mr. Smyth, and so were other radio industry group CEOs.

Keep in mind that the decision for dispersing current royalty payments was made by the Copyright Royalty Board using the credible logic that it was not its position to "save business from going out of business." The Copyright Royalty Board decision was based purely upon what it determined to be a fair market rate that musicians and performers should be paid for their work.

In other words: Royalty rates aren't based on what they will do to the radio industry. Broadcasters are about to pay the same performance fees that internet radio stations were handed a few years ago. And now, eighteen months after the first warnings arose, radio leaders are finally reacting-to instead of acting-on their future.

A few words of advice on getting people to contact their representatives in Washington (to display outrage at a performance tax being leveled on radio): Don't expect much from that effort because the folks in Washington have heard this before - when webcasters tried it on a number of different occasions. You don't remember that, Mr. Smyth, because as hard as the internet radio community tried to get the broadcast industry involved, broadcasters ignored the fact that the next generation of radio was getting led to the royalty fee butcher block in Congress.

I'm guessing that all you can do now is pray, which is why I suggest putting your hand on the monitor. If praying doesn't work, maybe you'll be lucky and get an electric shock that'll jolt you into realizing you're about five years too late to be effective with the "Local Radio Freedom Act."

Currently American broadcasters are the only ones not paying performance fees. They sat back while performance fees were getting a foothold in the United States (another true demonstration of leadership within radio's ranks). Now, however, the radio industry had better brace for new fees, along with a long legal battle.

You'll have to burn the lights brightly in that corner office of yours for many years to come now. I know from watching this since it began. Once the RIAA sets its crosshairs on you it won't give up until you're gone, or pleading uncle.















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