Reality Check on the Performance Tax Issue

Like the rest of the radio industry, I cheered the recent news that the movement in Congress to impose a performance fee on music airplay is almost dead.  A majority of the House and a growing number of Senators have signed the Local Radio Freedom Act, a resolution that denounces any performance fee, tax or other royalty charge on music airplay. 

However, over the last few weeks, I have read with great interest (and at times real confusion) the reports and blogs about the controversy generated by House Resolution 848 - the so-called Performance Rights Act – the measure that would impose performance fees.  The result is an incredible amount of misinformation regarding black radio and black music performers. 

To begin with, some radio execs - who should be more responsible - are making accusations that are inflammatory.  At the epicenter of these charges is a mess created by Cathy Hughes, CEO of Radio One.  

While she certainly has the right to express her views about HR 848, Ms. Hughes was completely out of line in what she said on the Baisden Show about Congressman John Conyers (D-Michigan) and the negative inferences she made about his ability to discuss or legislate this bill. 

I have worked with Representative Conyers on several issues in the past and have found him to be very intelligent.  His House committee has offered an opportunity to air both sides of the performance tax issue in a fair and rational manner. 

Ms. Hughes has also tried to lead the public to believe that this bill targets black radio only and that its passage would put urban stations out of business and financially swamp Radio One. 

Once and for all, let's make sure everyone realizes that this is not a black radio issue.  It’s an issue that impacts the economy of all music radio stations, no matter what format.

However, executives like Ms. Hughes are using HR 848 as one more excuse as to why their black radio stations can’t succeed in this extremely competitive radio environment.  The point is that under-performing radio stations have to stop looking for alibis for their failings and accept the responsibility that maybe they are to blame for their bad business decisions and not some dark evil exclusionary racial issue. 

There are many wildly successful black radio stations in America.  And there are also a lot of not so successful black stations.  The failing stations need to stop looking for excuses, honestly examine how they are operating and fix their problems.  Maybe they could model themselves after the successful stations and enjoy similar success.  Or maybe give customers what they want and they will beat a path to your door. 

Secondly, supporters of HR 848 contend that performers – especially minority artists – are being slighted because they are not fairly compensated for their work when radio stations play their songs for free. 

This argument is hard to swallow.  It’s absurd that performers would blame radio stations for their lack of financial success.  Good business dictates that the best rise to the top and others struggle until they figure out the game.  The best usually get paid the most.  Admittedly, some artists reject the idea of mass appeal.  For that, I salute them and their principles.  But sometimes principals can come at a price. 

I am fortunate to have had the chance to meet and get to know many artists.  It appears to me that most of them are very well paid and in most cases deserve it. 

We’ve all watched MTV’s Cribs and seen the artists with multi-million dollar estates and garages full of exotic cars.  These people are not suffering and are proudly living the "mega star" lifestyle.  Did radio help them in any way?   Perhaps their success was partially due to massive CD sales triggered by the hits that radio plays.  Maybe it’s partially the result of concerts promoted by local radio, which in turn bring them additional revenue in the sales of t-shirts, hats and other memorabilia.  And it was all made possible by the massive exposure their songs received on radio.  A coincidence? I think not.  

Besides, in today's music industry, black artists are some of the most highly compensated entertainers on earth. Why they would want to change a system that rewards the best is beyond me. 

Let’s clarify something else - HR 848 is not going to result in backup singers and studio musicians making more money.  The people in these professions are all paid early on in the process by the artist or the record label.  If you are a back up singer or a musician and you haven't been fairly paid, then you have a beef with someone, but it is not radio. 

The long-standing synergy between the radio business and the record industry has worked well for decades.  While not everyone likes the system, it seems to have worked very well for those people who have the talent and skills to rise to the top – whether they are radio executives or music performers.  For those whose skills are not as impressive, they find a place in the system at a level commensurate with their work.  This is the way of the world.  Deal with it.

Harry Lyles, Lyles Media Group hlyles@urbanradio.com