Believe it or not, the National Association of Broadcasters and the Recording Industry Association of America have announced that they want new digital  devices like cellphones, iPods and music players to be legally required to incorporate FM radio receivers.  This appears to be a twisted bargain to get the radio broadcasters to agree to pay performance royalties for radio airplay to the record companies, in exchange for propping up their business models via legislation.  How bizarre.

As reported in Arstechnica, “Congress should mandate that FM radio receivers be built into cell phones, PDAs, and other portable electronics.

Radio broadcasters and music labels are at each other’s throats over the question of whether radio ought to pay performance rights to labels or artists when it plays their music on the air (currently, only songwriters get paid, not artists or labels). A bill percolating in Congress, the Performance Rights Act, would rationalize performance rights in the US; satellite radio and webcasters currently pay full performance fees to labels or artists, but radio does not, thanks to a longstanding exemption in copyright law.The bill has already passed out of committee in both the House and Senate, but it is vigorously opposed by the broadcasters; they argue that radio provides valuable promotion to artists and shouldn’t have to pay. Congress tried to force two of the main lobbying groups, the National Association of Broadcasters and musicFIRST (RIAA is a member), to hash out a solution last November. None was forthcoming, but talks have continued since then and are now close to completion.The two sides hope to strike a grand bargain: radio would agree to pay around $100 million a year (less than it feared), but in return it would get access to a larger market through the mandated FM radio chips in portable devices.”As regards the chip, this is a key issue for the radio industry,” musicFIRST told Ars today. “musicFIRST, too, likes FM chips in cell phones, PDAs, etc. It gives consumers access to more music choices.”

As the contours of this deal came into sight last week, the consumer electronics companies saw the prospect of a new government mandate, and one that was transparently about propping up a particular (and aging) business model.

“The performance royalty legislation voted out of the Senate Judiciary Committee does not include this onerous and backward-looking radio requirement,” said the CEA’s Shapiro, and he wants to keep it that way.

The deal has not been finalized, we’re told. When it is, the two sides still need to convince Congress to go along, but they’re hopeful something can be wrapped up late this year or early in 2011.

The Consumer Electronics Association, whose members build the devices that would be affected by such a directive, is incandescent with rage. “The backroom scheme of the [National Association of Broadcasters] and RIAA to have Congress mandate broadcast radios in portable devices, including mobile phones, is the height of absurdity,” thundered CEA president Gary Shapiro. Such a move is “not in our national interest.”

“Rather than adapt to the digital marketplace, NAB and RIAA act like buggy-whip industries that refuse to innovate and seek to impose penalties on those that do.”

But the music and radio industries say it’s a consumer-focused proposition, one that would provide “more music choices.”

Please.

Hypebot has lampooned this absurdity with it’s own list of “Top 10 Government Mandates Needed to Save Us.”

  1. All Videogames Come Bundled With Top 40 Albums: The RIAA would like you to believe the number one threat to the profitability of the record and music industries is file-sharing, but I think there’s another industry that deserves a little attention. Call of Duty: Modern Warfare 2 sold ten million copies in the US alone. That money could’ve been spent on albums. Let’s lobby and make it so every videogame sold is bundled with Rihanna & Lady Gaga’s latest album. Hey gamers, it’s only fair.
  2. iTunes & Amazon Can Only Sell Physical Albums: Think about it, digital singles are cannibalizing the sales of full and physical albums. If we could only get a bill passed that forces iTunes to sell only physical albums. Fans should be forced to enjoy music the way that artists intended it to be consumed and this whole idea of them having their personalized music experience needs to go away. I’m sick of fans thinking they can just cherry-pick the songs they want and never hear the other ten songs on the album. This bill needs to get passed now.
  3. MTV Must Play Music Videos During Mandated Hours: I am sick of all this reality TV junk and I bet you are too. Ever since they stopped playing our videos sales have fallen through the floor. Once we get The Hills off the air and Ke$ha’s new video back in solid rotation, fans will have no choice but to get back to watching our expensive productions. I bet we can even get Carson Daly back. Without him, no one wants to buy music anymore. To make sure our music is playing during prime hours the record industry must have jurisdiction over their programming.
  4. Music Downloaders Must Be Downgraded To Dial-Up: Screw this three strikes business, let’s just throw those evil pirates back to the stone-age and throttle every suspected pirate, as determined by our monitoring systems that we got installed on all 5 billion of net enabled devices, back to dial-up internet speeds. If they think they can steal our content then they can also wait 10 minutes for the email and Facebook to load. Who’s file-sharing my music now Mr. 28k connection? BAM!
  5. Big Towns Must Have Record Stores: Wide-spread file-sharing has decimated the profits of our record stores and forced them to close their doors. All those pirates on dial-up are going to need to buy music somewhere. I say we make it so there’s a government mandate that forces record stores to be placed across the street from Starbucks Coffee Shops in every town that has a population of over 250,000.  In the event that there is already another Starbucks across the street from the other Starbucks, our record store will be placed to the left of the shop in question.
  6. Guitar Hero, One Real Guitar For Each Fake Controller: Seriously, who do these punk college students and videogame developers think they are? Interacting with music using plastic pieces of junk; these kids need to get a life and learn how to play real music, with real instruments. I’m convinced that the only way we can ensure profitability of GuitarCenter and make sure that these varmints don’t destroy our cultural history with their little white flippers and colored buttons is if we make it so every fake Guitar Hero controller comes with a real guitar too.
  7. The Music Blog Network & Pay Wall:  All music blogs must be forced to join a subscriber network and be put behind a pay wall. If users want to read to their amateur content and get DRM encrypted, virus laden MP3 files, then, they must pay money to have access to that content. It’s only fair. They work hard to write about music and they are entitled to money if you want to read their blog.  Also, with every single subscription to the music blog network users must also opt into a year’s worth of either Rolling Stone or Spin; it’s time they learn what real music journalism is and stop getting advice from talentless strangers, failed musicians, and their college dorm buddy who thinks he’s a hipster, but really isn’t.
  8. Resale Is Prohibited, No More Used CDs: Fans should not, I repeat, fans should not be able to buy music for half price at some local store run by a hippie. We need to put a stop to this and make it so the resale of albums is prohibited. To ensure that fans are receiving the optimum experience that we intended them to have we need mandate them to buy new CDs every time. For years, fans have been buying music from these places that smell like pot and incense sticks. They buy an album and they go home and all it does is skip because of how scratched it is.  No more used CDs. Period. New music sounds better anyways.
  9. Ticket Sales Combined With Albums Sales: Fans already pay 20 different fees when they purchase a ticket to see live music so why not add a surcharge on their that they understand. The album fee. For every single show that a fan attends they will now be mandated to buy the album too. The artists work really hard on their records and live music should not be considered a substitute for professionally produced music.
  10. Home Recording & Music Production Is Outlawed: Those amateurs and indie musicians thought they were clever when they started producing music in their homes and not getting it mastered at a recording studio. With all those fly-by-night music schools that graduate sound engineers by the hundred we need to guarantee that those students, who paid good money, have jobs when they get out of college. This will also have the effect of making artists dependant of the major label system to fund the recording of their music and drastically increase the quality of all music in general. All that stuff on YouTube sounds terrible, let’s fix that.

We Welcome Your Comments

Comments

15 replies
  1. Dan says:

    Lampoon or not, I agree with number #3, or they can change the name to RTV since music never enters into any of the crap on that waste of bandwidth

  2. Balarko Banerjee says:

    Very nice article Sir

    BTW do you think that the record companies will shut down or will it completely change its policies and start afresh????

  3. Toby Elwin says:

    Another spot on post Dave, thanks.

    Until the music industry and lobbyists start to diversifying their thought they are headed to the dust bin.

    It mystifies me that an industry so desperate for change continues to retread and shuffle the same people that piloted their industry towards this mess amongst themselves.

    Sort of brings to mind the deck chairs that were rearranged on the Titanic while the band tuned up.

    If you want new thought you have to cultivate new thinkers and that means the hard reality that everything that was known needs to change.

  4. Noah says:

    Hi David,

    Nice article. Found your blog via Twitter via @bobmoz.

    What baffles me, from a purely economics standpoint, is why the government should regulate any of this at all. What good does it do outside of serving special interest?

    It seems even if this statement were true, “musicFIRST, too, likes FM chips in cell phones, PDAs, etc. It gives consumers access to more music choices.””, market forces would create the FM receivers in phones at the lowest cost to consumers.

    Good blog, David.

    -Noah
    @nogoyo

  5. Alex says:

    I do not think that they should have to be made to pay the $100 million dollar price tag. The N.B.A. is simply trying to phase out the existence digital media. With all the damage that “ipods” have to their listening audience, this is their attempt to try and get them back. Alos by trying to increase the prices on digital media and trying to get rid of places that you can get it. They are slowly trying to edge out the dent the digital media playing devices have done to their audience. Because less of an audience means less money to them. This bill is the first step, they are first trying to get everyone use to the FM receivers by putting them on all digital media players, and then make their attack on the digital media industry as a whole.

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Trackbacks & Pingbacks

  1. […] Gasping for Breath as the Ship Goes Down – the final days of the recorded music business […]

  2. […] if we put a radio in everything, it’ll all work out right? I’m gonna go put a radio in my tv […]

  3. […] Gasping for Breath as the Ship Goes Down – the final days of the recorded music business via Berkleemusic Blogs by Dave Kusek on 8/25/10 Believe it or not, the National Association of Broadcasters and the Recording Industry Association of America have announced that they want new digital  devices like cellphones, iPods and music players to be legally required to incorporate FM radio receivers.  This… […]

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