For those who aren’t familiar with the Performance Rights Act, it is a bill that was introduced in February that would require radio stations to pay performance royalties in addition to fees they already pay to songwriters. The RIAA, along with a few big names such as Billy Corgan (pictured), is pushing this bill under the pretense that it benefits the artists and that the industry needs it to survive.

The problem is that their claims simply are not true. The Performance Rights Act would have potentially disastrous consequences across the music business, and I’ve put together a quick list that explains why.

1. The Performance Rights Act would cripple local radio

The PRA is basically a new tax on radio stations that would be paid directly to the recording industry. This fee is already being paid by Internet, satellite and cable radio stations, and has caused the untimely demise of more than one service providor since it went into effect in 2002. What makes congress think that local radio stations will be able to avoid the same fate?

Jesse Walker of ReasonOnline also pointed out recently that the fees themselves aren’t the only costs that this bill would impose on radio stations:

“The record labels are completely out of touch as to how college radio stations operate,” Warren Kozireski, president of College Broadcasters Inc., recently complained on his organization’s website. “The extensive record keeping requirements that will be required by the Copyright Royalty Board alone will add hundreds, if not thousands of dollars to the true cost of a performance fee.” It’s relatively easy to do that book-keeping if you have a narrow playlist and rarely deviate from it, as is the case with most large commercial radio stations. But if you have a library of thousands of albums and 45s, many of which were never reissued on CD, and if you allow your DJs to choose which ones they play—or even to bring in still more music from their personal collections of rare soul or jazz or bluegrass or electronica obscurities—then tracking the data suddenly becomes a full-time job.

2. The PRA hurts independent artists

I’ve heard some supporters of this bill touting that the independent artists have the most to gain. This is because the money would go to performers and copyright owners, which in the case of independent artists are the same thing. Therefore, the PRA would provide a  potentially significant revenue stream for the artist. Right?

In a perfect world, maybe. But in this world playlists at major stations are chosen by advertising dollars, not DJs. Adding an additional fee for every song played will only make stations even more unwilling to take risks on unproven acts. Independent acts have a hard enough time getting on major stations – they don’t need another hurtle.

3. Payola

Payola, for those who don’t know, is an illegal but very common industry practice where agents of the record labels bribe radio stations to broadcast their music. As Mike Masnick of Techdirt puts it:

The most damning argument against the recording industry’s demand for money here is the fact that, for decades, the industry has (illegally) had the money go in the other direction. The system of payola has shown, quite clearly, how much the recording industry values airtime, in that it’s willing to pay radio stations to play its music.

So, can anyone explain why it’s illegal for record labels to pay radio stations to play music, but it’s okay for Congress to force radio stations to pay the record labels for playing their music? It defies common sense.

In other words, the RIAA values the promotional benefits of radio airtime so much that it’s willing to break the law and pay out large amounts of cash to get it, yet it now wants the radio stations to start paying them for the privelidge of providing  this benefit. Make sense? Didn’t think so.

4. The bill is based on misinformation

According to a recent press release by the musicFIRST Coalition - a lobby group created to push for the PRA  – Radio should pay performance royalties because it is the only platform that currently does not. They accuse brodcasters of believing that “AM and FM music radio stations should continue to get special treatment, that AM and FM music radio stations do not have to play by the rules, and that AM and FM music radio stations should enjoy a competitive advantage over other music platforms.”

The problem is that they are ignoring the fact that they were the ones who created this disparity. When the other platforms such as online streaming were required to pay performance royalties it had everything to do with controlling the reproduction of digital music – a problem not shared by terrestrial radio. As Jesse Walker points out, the industry’s argument “hinged on the idea that digital broadcasting is different from conventional broadcasting. Forteen years later, as it attempts to impose a performance fee on AM and FM broadcasters as well, the industry now wants to claim the channels are equivalent after all.”

5. The PRA doesn’t benefit musicians as much as the RIAA claims

I already talked about the ways that independent musicians would be hurt by the PRA, but what about bigger acts? The problem here is that the royalties would be paid to performers and copyright owners, which in most cases are the major record labels.

After the label takes its cut, there remains the issue of whether or not the rest of the fee will ever reach the artist. To quote Walker:

The Web radio experience is instructive. The institution that distributes performance fees to artists is SoundExchange, an organization that spun off from the Recording Industry Association of America in 2003. In 2007, the Houston Press noted that the group was apparently unable to locate about 25 percent of the performers on whose behalf it was allegedly acting. After perusing the list of lost musicians, the Press‘s John Nova Lomax reported that “in less than five minutes of Googling, I found the official Web sites and/or MySpace pages of Fito Olivares, Goudie, Mark May, the Hollisters and Los Skarnales. What’s more, highly visible people like Cam’ron (fresh off a highly-publicized appearance on 60 Minutes), Fat Joe and Danzig are on the ‘lost’ list too.”‘

Conclusion

I want artists to have the ability to make a good living creating music, but this is not the bill to make that happen. The Performance Rights Act amounts to little more than a last ditch manuever by a flailing industry. What do you think? Does the bill make sense, or will it cause more harm than good?