Light Up the Fat Cat Signal, Crony Capitalism is Back: The Internet Radio Unfairness Act

AFM President Ray Hair has a great op-ed in The Hill’s Congress Blog about the so-called “Internet Radio Fairness Act”–which shows how much Big Tech takes advantage of its lobbying clout to screw musicians.  That’s called “crony capitalism” meaning that the big boys keep getting bigger by using their government connections.  The “middle class musicians” keep getting screwed, blued and tattooed by the Big Tech companies whose lobbying budgets for last quarter exceed the combined lifetime family incomes of probably 90% of the “middle class musicians” whose work made Pandora rich.

Pandora’s founder Tim Westergren is fond of that “middle class musician” concept, which in the Age of Theft could not only be the new normal but might even be aspirational.  The Internet Unfairness Act will speed up the income transfer that is already driving more and more of us inexorably to the poverty line–the concept of “middle class musicians” makes a virtue of decline so that we can all be happy while Big Tech jams us hard with the Internet Unfairness Act.  As Ray Hair wrote:

It’s discouraging that Pandora, a digital radio company that has been so pro-artist in the past, now seems to be leading the charge to support this anti-musician legislation – as evidenced by founder Tim Westergren’s [public statements].

Westergren is absolutely correct that it’s unfair that Pandora pays artists while AM/FM radio doesn’t; but that disparity doesn’t mean that everyone should pay artists less. And Westergren’s claim that Pandora cannot afford to pay artists fairly doesn’t add up either. The company just completed a wildly profitable IPO [that paid artist’s nothing], has an explosive user base, maintains one of the world’s most-recognizable music brands, and remains the industry leader.

Moreover, paying royalties to musicians isn’t stopping new Internet companies from entering the market, as Westergren argues. The Internet radio market has grown 33 percent over the past five years. Westergren suggests that artists would actually earn more if Internet radio stations paid them less, because there would be more Internet radio stations. To me, it sounds more like a clever way for Pandora to make billions in profits by cheating artists out of their fair share of the internet radio revenue pie….

In fact, it sounds a lot like the arguments AM/FM radio continues to make in defense of the arcane loophole that allows them to earn tens of billions of dollars off hit songs without paying musicians a penny. ‘It’s free advertising for artists,’ they say, so they shouldn’t have to pay. [Sort of like “music is like water”.]  But when was the last time a corporate over-the-air radio station broke a new artist, or even played a song that wasn’t already shooting up the charts? AM/FM radio is only interested in milking established acts for every advertising dollar they’re worth, without passing a fraction of the revenue on to musicians.

Indeed, that’s exactly what musicians are asking for: a tiny fraction of advertising revenue. Even Internet radio stations like Pandora pay musicians a small fraction of a penny per performance. That’s the miniscule price to support the musicians that give life to the songs we love, and bring joy to the world. Paying musicians isn’t an inconvenience to radio’s business model – it’s an essential part of it.

All radio companies should pay for the privilege (and the profit) of using other peoples’ art, regardless of whether they’re broadcasting over the air or over the Internet. Musicians agree on that, and it’s also what occurs in virtually the entire developed world. But we  don’t think we  should be ripped off in the process.

What’s the matter, Ray?  Don’t you aspire to be middle class?

See also: Clutching Forks and Knives to Eat Their Bacon: Sirius Now Wants to Gut SoundExchange