Just as the newspaper industry is facing a collapse of their business model so to is the music industry. While it is the falling advertising spending on traditional print media that is severely hurting newspapers it is also the digital world that is biting into the profits of the music industry and their trade groups. As things like CDs begin to go the way of vinyl and cassette tapes the music industry is desperately struggling to find new ways to increase their profits.
Royalty payments have in the past been what the music businesses considers to be a secondary revenue stream. That is beginning to change not just in the US but right around the world as the music trade groups responsible for collecting royalties step up their blood sucking game. In the US we are seeing the introduction by Senator Conyers Jr. of a new bill in congress that would see a change in how royalties are paid in the United States.
Currently radio stations only make royalty payments to the songwriters, this law would change it so that radio stations would have to pay royalties to record companies and artists.
“The thing that draws people to radio is the music, and performers don’t get any of that” revenue, said Michael Huppe, general counsel at SoundExchange, an organization that collects royalties for record companies and artists when music is performed on U.S. Internet and satellite radio services, which are required to pay such fees.
Of course Huppe doesn’t acknowledge the incredible amount of free advertising that artists, and record companies, get because of all the free airplay they get. This move though is similar to one that is moving throughout the world as more music trade groups in different countries are pushing for more and higher royalty payments from an increasingly number of different types of businesses.
An example of this is a recent push by the Phonographic Performance Co. of Australia which has gone after nightclubs to increase their current royalty payments of 7 cents per person, per night, up to 84 cents this year and $1.05 in a few years.
“We looked at this and thought, 7 cents just doesn’t seem right, when people are paying 10 to 15 dollars to get in and at least 5 dollars for a drink,” said Stephen Peach, chief executive of Phonographic Performance Co. of Australia, which collects the fees. “Without music, there wouldn’t be a nightclub.”
As with Huppe in the US Stephan Peach seems to ignore the fact that all that music being played in nightclubs is free advertising for their represented artists and their masters record companies. In order to further increase their money collected Peach is recommending that similar organizations around the world follow their example and begin going after: fitness centers, restaurants, and television broadcasters.
I wonder if these idiots will ever figure out that all they are doing is killing the golden goose by this type of blood sucking behavior.