Today, “more than 100 accomplished music creators” are in the nation’s capital for the annual “Grammys on the Hill.” But tomorrow, these stars will be taking part in a massive lobbying effort sponsored by the major record labels and largest music publishers. The halls of Congress will be abuzz with high-priced lobbyists and famous recording artists asking for government help to boost the bottom line for corporate music.
The MusicFirst Coalition, a front group for the three major record labels, which control about 80% of all music, teed up the lobbying effort in January with an open letter to Congress, asking for a new fee to be imposed upon local radio stations for the use of music.
This is not a new issue. Congress has repeatedly dismissed MusicFirst’s lobbying efforts on the premise that radio promotion is the key driver of corporate music’s revenue. In other words, most Members of Congress support free play for free promotion.
Radio airplay has long been viewed as the determining factor of a song’s success or failure. Get on the radio and you have a shot. Don’t get your song on the radio, and there is very little chance of commercial success. That is because local radio stations reach hundreds of millions of listeners each week. The promotional value of radio airplay is so valuable that many labels would pay for the ability to get a song on the air. Yet, we have laws on the books that prevent the labels paying radio stations to “guarantee a hit song.”
MusicFirst disagrees about the promotional value of local radio stations. The front group for the three major record labels argues “long-gone are the days when radio helped ‘discover’ performers.” That claim is debunked by market realities. The sponsors of MusicFirst spend tens of millions of dollars each year promoting their music from radio airplay. And, this year’s honoree at Grammys on the Hill, country mega-star Keith Urban, recently said of his fans listening to local radio, “that’s where they get a lot of my music.”
MusicFirst argues that even with the promotional value of radio, “in any other market-based arrangement they (local radio stations) would have to compensate the owner of that music at market rate.” What MusicFirst conveniently leaves out of its letter is that in any other market-based arrangement, corporate music would have to pay for the advertising of its product. Local radio stations provide corporate music with billions of dollars of free advertising.
And of course, the “market rate” they are asking for is not from an actual market, but rather a government rate setting body.
Despite MusicFirst’s stated goal that “market-based principles drive compensation for all artists,” it is clear they are really seeking a government-backed subsidy on the backs of local radio stations.
However, MusicFirst will not be performing solo. The major music publishers will also be joining the chorus on Capitol Hill.
The major publishers are seeking legislation called the Songwriter Equity Act that would inflate fees on any business that performs music — restaurants, retail shops, bars, etc. Despite record revenues year over year, the major publishers are asking Congress to subsidize their bottom lines on the backs of other businesses.
The shared lobbying goal of the largest music publishers and the major labels of getting other industries to bail out their businesses is not a coincidence. The three largest music publishers are owned by the very same corporate parents as the three major record labels.
Congress has a lot of important work on its plate. While Big Music is bringing a lot of celebrity-spotting to the Capitol, they will not be bringing a lot of credible policy proposals. Subsidizing corporate music should not be a priority of Congress.
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