The day that radio was killed

Technology didn’t kill radio.

Satellite radio didn’t kill terrestrial radio.

But as of today radio stands a very good chance of becoming an ever increasing wasteland to the point that we will see a massive shift away from radio stations playing music. If you think that talk radio is big now you ain’t seen nothing yet.

This is going to happen all because the very basis of how music radio works has shifted. Instead of record companies using radio stations as a way to promote new artists and new releases from established musicians the passing (with a heap of lobbying entertainment backed groups like the RIAA and musicFirst Coalition) of the Performance Rights Act radio stations will now have to pay to play that same music.

The argument put forth by the lobbyists is that this is a revenue stream that the artists are not seeing and therefor not getting paid for their work. Radio has been getting a free ride forever – getting rich off of the backs of musicians by not having to pay royalties for the music they play.

It’s a nice argument and would make sense if the musicians were actually going to see any of that royalty money. As it is they already don’t see a large chunk of what is suppose to be their money that is collected supposedly on their behalf by SoundExchange. The excuse used of course by the organization is that they can’t find the artists in order to give them the money.

So what happens with all that money?

Well the SoundEchange gets to keep it which ends up making this suppose to be non-profit very wealthy – to the tune of over $100 million as of 2007.

Now this is the group that is going to be able to collect some pretty hefty royalty money from radio stations all on the basis that it is for the musicians. The problem is that by changing the economic landscape by which radio works they are removing the incentive for any stations, other than the big conglomerates, to play new music from anyone other than the really big established musicians or bands.

Radio play has always been considered to be the biggest promotional play a musician could hope for. Even though the power of the hit lists may have lessened in our Internet world they still hold considerable power. It was advertising at it best (or worst during the payola years). That power is now gone.

As Michael Masnick at Techdirt notes

Besides, all this will do is harm up-and-coming musicians. Because radio stations will now need to pay more for playing music, they’ll play less music, and if they’re playing less music, they’ll focus just on the big name acts. Smaller up-and-coming artists should be furious with the RIAA for giving radio stations less incentive to play their works. Remember, this is the opposite of payola. While payola got new records on the air, this will make sure fewer get on the air. But it will sure put a bunch more money in the pockets of the major record labels.

This new tax revenue stream for the entertainment industry through its watchdog groups might not truly kill off radio but is sure is going to lengthen its time on life-support.