The Radio Tax: My Response

Since I'm short on ideas for a second blog post for the week, and I didn't want my first post to turn into an overwhelming wall of text, I'm going to cheat a little and use my second post to respond to the proposed "Performance Rights Act."

In my opinion, the Performance Rights Act seems as much like a bailout for the major record labels as it does an honest attempt to compensate artists. As I wrote last week, the major labels are struggling immensely, and this seems like another attempt to pass the expense off to someone else rather than try to fix their failed business model.

Additionally, I'm not so sure the artists really need to be further compensated. According to opponents of the act, the free promotion provided by "terrestrial" radio stations results in an estimated $2.4 billion dollars of additional record sales for artists and labels. This doesn't account for any additional money made off concerts and merchandise, which is undoubtedly substantial.

While I don't listen to the radio that much to begin with, this act will only serve to decrease the already mediocre quality of radio. Even the smallest stations, including college radio stations, would be forced to pay some minimal royalties. It seems likely that this will force some stations out of business, reducing the variety of music available on the radio, and eliminating jobs in local markets.

It's tiring to watch the major labels continue to act as if they are victims of the digital age, when in reality they are nothing more than failures who never quite managed to adapt. If this bill passes, the effect will be similar to that of the government bailouts on certain other industries. The major labels will be rewarded for their inefficiencies and shortcomings, all while being allowed to continue feeding consumers a sub-par, watered-down product.

So, I'll repeat what I said last week: It might not be the worst thing in the world if one or two of these major labels were to fall. Personally, I would much rather see the demise of an EMI or Warner Music Group than see the burden of their poor management be shared small, local radio stations.

Read more: http://www.noperformancetax.com/