The news you're not supposed to know...

An Introduction to Austrian Economics: Understand Economics, Understand Everything
The Century of the Self: The Untold History of Controlling the Masses Through the Manipulation of Unconscious Desires
The Disappearing Male: From Virility to Sterility

The Obama Deception: The Mask Comes Off
Operation Gladio: The Hidden History of U.S. Sponsored False Flag Terrorism in EuropeThe New American Century: The Untold History of The Project for the New American Century
Article posted Aug 24 2012, 9:08 AM Category: Politics/Corruption Source: Techdirt Print

Rep. Nadler Proposes The RIAA Bailout Act Of 2012

by Mike Masnick

Ah, the whole fight over licensing and royalty rates for internet radio had been quiet for a little while, but has sprung back up thanks to Rep. Jerry Nadler proposing a music royalty bill that would effectively bump up the rates that cable and satellite radio stations have to pay to make them more aligned with the insanely high rates that internet streamers are supposed to pay (rates so high, and set by a group of judges who don't appear to know what the internet is half the time, that no real business can be built off of them). This is in contrast to a different, but similar, attempt by Rep. Jason Chaffetz to basically bring the internet rates back down to the same rates as those other providers.

Of course, this is all somewhat related to the RIAA's ongoing push for a Performance Rights Act, which would force radio stations to pay extra royalties for when they play music. Under existing law, radio stations only pay the composers/songwriters for songs played on the air, due to the recognition that radio airplay is basically a massive advertisement for the musicians and it's silly to have stations pay the copyright holders for advertising their works. In fact, it's doubly crazy when you realize that the history of radio is filled with pretty indisputable evidence that the major music labels find tremendous value in radio play: payola. Payola is all about the labels increasing the airplay, knowing that it leads to all sorts of revenue elsewhere. But the RIAA is so insanely greedy these days that it's been begging for this form of a "bailout" for quite some time -- seeking to get radio stations to pay them for playing the same music that the labels are paying the stations (indirectly, of course, thanks to all the payola settlements) to play!

These proposals don't directly address that issue, but are clearly based on this idea. In fact, Nadler is incredibly upfront that he views taxing internet radio is his way of making up the money that isn't being collected from terrestrial radio:
“The lack of a performance royalty for terrestrial radio airplay is a significant inequity and grossly unfair. We can’t start a race to the bottom when it comes to royalty rates and compensation for artists," Nadler said in a statement. "The Interim FIRST Act would provide artists with fair compensation for the valuable creations they share with all of us."
In other words, because we can't fund an RIAA bailout off the backs of terrestrial radios (thanks in part to the powerful lobbying of the NAB), we'll instead increase the existing (and already crippling) tax on the useful and innovative services that are trying to help drag the RIAA (kicking and screaming) into the future.

Pandora is, quite reasonably, worried about this turn of events, noting that this new tax would be "astonishingly unfair."

Nadler seems to think that Chaffetz's plan is unfair because it would mean lower royalties from the internet streamers, but that's a gross distortion for a few reasons. First off, it assumes a perfectly static market, which is wrong. Second, it seems to assume that the identical number of services and the identical number of listens will occur. That's not true. As it stands now, the rates are so damaging that Pandora -- the top player in the space -- has made it clear it may never be profitable. Yes, never. Nadler's bill would effectively make sure that no one else in that market would be profitable either. The end result? Many of these services don't exist or never get started. That would actually mean fewer services, fewer listeners and lower royalties.

It's almost as if he has no concept of price elasticity. Lower prices can create higher total income. Also, the idea that any particular Congressional Rep. should be (effectively) determining what the "fair" price is for anything is, well, horrifying.

If these royalties are going to exist, is it really so crazy to think that perhaps (just perhaps) keeping the rates low, to encourage these useful new services to come along and grow, might be a good thing? But, instead, the RIAA and its members are so greedy for the largest payout per music listen, that they're clearly willing to kill off useful legal streaming services like Pandora. In the long run, that's not good (at all) for the record labels and the RIAA, but they've never been particularly good at seeing beyond the price per listen.

Either way, can anyone explain just why the government is bailing out the RIAA in the first place?

Latest Politics/Corruption
- Tennessee Town Passes Policy Banning Negative Comments About The Town's Government
- On Marijuana, Congress Giveth and Congress Taketh Away
- IRS Finally Examines Backup Tapes, Recovers 30,000 'Missing' Lois Lerner Emails
- Obama in 2006: I Have Stolen Ideas From Jon Gruber Liberally
- Video: Romney Praises Gruber at 2006 RomneyCare Signing Ceremony
- Obamacare Architect: "Lack of Transparency" Was Key to Fooling 'Stupid Americans'
- George W. Bush: I Don't Regret Waging War Against Iraq
- During Cold War, CIA And FBI Hired Over 1,000 Nazis As Spies, Limited Investigations Of Those Nazis

No Comments Posted Add Comment

Add Comment


Verification *
Please Enter the Verification Code Seen Below

Please see our About Page, our Disclaimer, and our Comments Policy.

This site contains copyrighted material the use of which in some cases has not been specifically authorized by the copyright owner. Such material is made available for the purposes of news reporting, education, research, comment, and criticism, which constitutes a 'fair use' of such copyrighted material in accordance with Title 17 U.S.C. Section 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner. It is our policy to respond to notices of alleged infringement that comply with the DMCA and other applicable intellectual property laws. It is our policy to remove material from public view that we believe in good faith to be copyrighted material that has been illegally copied and distributed by any of our members or users.

About Us - Disclaimer - Privacy Policy

Advanced Search


Remember Me
Forgot Password?

A Peace Officer Defies the "Blue Tribe": The Exile of Officer Cariol Horne - 12/19For Punitive Populists, "Comply or Die" IS The "Law" - 12/19Cop Stops Fellow Cop From Choking a Handcuffed Man, She Was Then Beaten and Fired - 12/18Thieves Yell "Police" Before Invading Home, Shooting and Robbing Resident - 12/18Baby Clings to Life After Flash-Bang Grenade Lands in His Crib - 12/20Sony Hack Reinvigorates Support for Privacy-Busting CISPA-Style Legislation - 12/19Reno 911 - Cop Psychology [Comedy] - 12/19Psychotic Vegas Cop Filmed Beating Man For Filming In Viral Video Queitly Hired By Another Dept. - 12/17

Rialto, CA Police Made to Wear Cameras, Use of Force Drops by Over Two-ThirdsCop Who Karate Chopped NY Judge In Throat Gets Off Scot-FreeFlorida Cop Smashes Compliant Woman's Face Into Car -- "Maybe Now You Can Understand Simple Instructions"VIDEO: Lapel Cam Reveals A Day In The Life Of A U.S. Police Officer (Tasing, Beating, Breaking & Entering, Stomping On Heads... and Laughing About It)Caught On Tape: Officer Sucker Punches Inmate In Face, Files Report Claiming 'Self Defense'Insult Person On Twitter, Go To JailSWAT Team Brings TV Crew To Film Raid Against Threatening Internet Critic -- Raids Innocent Grandma InsteadCop Karate Chops NY Judge In The Throat