Wednesday, December 19, 2007

The Good, The Bad

Two significant issues were brought to the forefront yesterday, the first regarding the FCC's plan to allow greater media consolidation and the second regarding a bill that would finally require terrestrial radio pay a performance royalty for sound recordings.

FCC Passes New Rule

I have yet to read the new FCC rule but word on the street is that Chairman Martin's plan passed. His proposal is discussed in more detail in previous posts but it will allow a single company to own both a newspaper and TV station in a top-20 market, so long as there are 8 other media holdings remaining after the merger and that the station is not one of the top-4 stations in the market.

I sincerely hope that lawmakers stop the enforcement of the new rule and I suspect that they will. It is a ridiculous rule as it uses fluid benchmarks to make long-term decisions. What if a company wants to consolidate TV and print in the #20 market and that market slips to #21? What happens if the TV station purchased is #5 but, due to the significant ad budget of the parent corporation, the station moves to #4? Will the FCC force an immediate breakup as soon as the conglomerate no longer meets the market requirements?

That is hardly likely. Instead, the FCC will probably grant waivers, just as it has granted waivers to Tribune and others when they sought to consolidate, rules be damned. The FCC will no doubt argue that it would be "unfair" to force divestiture of the media outlet if market conditions change and the owner no longer meets the requirements.

Perhaps the FCC has addressed this question and I am not yet aware of it (as I say, I have not seen the rule yet) but if not, media conglomerates will be able to drive Mack trucks through this loophole.

Congress Proposes Terrestrial Radio Sound Recording Performance Royalty

Finally!!! The only ones who can complain about the Performance Rights Act are Cumulus, Clear Channel, and other major radio outlets. I found it shockingly peculiar that Congress saw the justification for creating a sound recording performance royalty for online radio but did not see the necessity of doing the same for terrestrial radio.

The argument from the stations has always been, We promote the records so people will buy them. The labels response is, of course, But you're making money by playing our music! For me, that's what it should always come down to. While the fundamental purpose of copyright is NOT financial but is to support creative expressions, I certainly think that if someone is profiting from copyrighted works, they should compensate the creator. Radio, instead, snubs its nose at recording artists and says it's doing them a favor - they should be happy that radio is even playing their music! (Yeah, OK.)

Lawmakers have finally stepped up - this is the first time in history (at least that I'm aware of) that a law has even been considered to give a performance royalty. It's about time that the U.S. joins the rest of the civilized world and honors the performance right of recording artists, regardless of the means used to deliver that performance.