An Ol' Broad's Ramblings
Obama’s Progressive Regime Attacks Local Radio
A Proposed Tax That Could Kill Local Radio, As We Know It.
by J. D. Longstreet
“For more than 80 years, radio and the recording industry have enjoyed a mutually beneficial relationship: free play for free promotion. And it works. It’s a relationship that has sustained businesses on both sides.
In fact, radio’s free promotion of artists translates to as much as $2.4 billion annually in music sales for record labels and artists. And this doesn’t even include the enormous revenues they receive from concerts and merchandising.
But the labels–like many businesses–are struggling in this economy. They have failed to adapt to the digital age, and find their business model is broken. And now they want to impose a fee called a performance tax on local radio stations to subsidize their losses.
A performance tax would threaten the local radio stations that communities depend on. It would financially hamstring stations, stifle new artists and harm the listening public who rely on free local radio.” … National Association of Broadcasters (You may read the entire story HERE.)
As a retired broadcaster with 30 years of experience in the business, I can tell you a “performance tax” would not just cripple many small market stations it would effectively put them out of business.
Broken down, what is meant by a “Performance Tax” is this: Each time a radio station plays a recording on the air, that station will be required to pay a fee (TAX!) to the recording label. (Some estimates say the amount in dollars would be 2 to 7 billion dollars a year! It should be noted that some estimates have the amount of free promotion for the record labels and recording artists, as a result of the radio stations playing their music, valued at 2.4 billion dollars a year!)
You can see, instantly, that many small market stations would, of necessity, stop playing music, of any kind, on the air. Thousands of stations across America would, almost overnight, become talk radio stations — that is, if they chose to remain on the air. With the economy as it is, currently, in America, I think it is safe to say that many small market stations would simple “go dark”, go off the air, shut down, and send their licenses back to the FCC in Washington, DC. As it is, thousands of small market stations are holding on by the skin of their teeth. It won’t take much to persuade the owners to simple shut the station down and walk away.
Suppose Congress passes the Performance Tax. Where will all that money go, anyway? Well most of it will go “off-shore,” “overseas,” to a foreign country. It will not remain in America. Why? Well, there are four major record labels in America today. Three out of the four are foreign owned. The National Association of Broadcasters says: “The record labels would like for you to think this is all about compensating the artists, but in truth the record labels would get at least 50 percent of the proceeds from a tax on local radio.” (Read the entire story HERE. )
Here in America, there are some 235 million people who listen to radio every week. A performance tax would reduce, not just the amount of music you hear on you favorite radio station, it would reduce the number of stations. Among the hardest hit stations would be the minority-owned stations. Those station determined to remain on the air would, of a necessity, switch their formats from “music” to “talk.” They’d have to, or perish.
Now think about this: Local radio stations pump thousands of dollars a year, in public service, into their markets, even the small market stations. How do they do this? Simple. The National Association of Broadcasters reports: “Radio stations are major contributors to public service – generating $6 billion in public service annually, providing vital news and community information and free airtime to help local charities. If a tax were imposed, stations’ critical community service efforts could be reduced.”
There are well over 100,000 Americans employed in local radio stations in America. If the stations income is reduced they will be forced to reduce their work force. That means even more Americans out of work.
In the event you had not noticed, local radio is free to the listener. It was designed to be free to the listener. The rich and the poor BOTH receive cal radio at no cost. The broadcaster is required to perform a certain amount of public service to its coverage area and city of license free, as well. Records are kept and reports to the FCC are made, periodically, to ensure the broadcaster is fulfilling his duty to broadcast in the “public Interest.”
Your local broadcaster needs your help. There are currently two bills in congress that would slap, a performance tax on your favorite station — H.R.848, sponsored by Democratic Congressman John Conyers (MI-14) and S.379, sponsored by Democratic Sen. Patrick Leahy (VT).
There have been resolutions against the Performance Tax introduced in both the Senate and the House in an attempt to assist your local radio station fight back. Both are known as “The Local Radio Freedom Act.” In the Senate, Sens. Blanche Lincoln (AR) and John Barrasso (WY) introduced S. Con. Res. 14, and in the House, Reps. Gene Green (TX-29) and Mike Conaway (TX-11) introduced H. Con. Res. 49.
Your members of Congress need to hear from you! Congress needs to hear you tell them to vote no on a Performance Tax for radio stations and to support the Local Radio Freedom Act.