Radio Faces Another Defeat In Royalties Battle, Which Could Be A Look Into Its Future

Radio has long held the upper hand over songwriters an artists when it comes to royalty payments, but it looks as though the tides could be turning, if recent verdict from the department of justice is any indicator.

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Guest post by Bobby Owsinski of Music 3.0

Royalty payouts have been tilted in radio’s favor over artists and songwriters for a long time, but the tide may be starting to turn. Recently the US Department of Justice sided with Irving Azoff’s Global Music Rights (GMR) in its lawsuit against the Radio Music Licensing Committee (RMLC) filed in Federal Court in 2016 for antitrust violations.

GMR currently represents over 43,000 songs and 83 songwriters, including Pharrell Williams, Drake, Bruce Springsteen, Bruno Mars, the Eagles, and many others, so it’s a real force in the industry.

The idea here is that GMR wanted to be able to set its own rates for radio performance royalties, rather than being bound by what ASCAP and BMI receive, as set by the RMLC. The recent ruling probably means that radio stations are going to have to pay a higher royalty to GMR songwriters in the future.

But that’s only the tip of the iceberg. The big radio station groups are straining under big chunks of corporate debt, so any increase in royalty payouts just adds to that burden.

And it doesn’t stop there. The United States is one of the very few countries on earth that doesn’t pay artists for radio airplay (only songwriters get paid), and momentum is picking up for that to finally be rectified. That would mean that radio stations will have to pay perhaps twice as much or more of what they’re paying in royalties now.

While this would be a boon for artists everywhere, it will probably mean the end of the large station groups as ownership of great many stations would no longer be feasible. That’s actually a good thing, as hopefully it will mean a return to local station ownership. The local communities would be better served, as would the music scenes. It could mean a return to the old days of a local station being able to actually jump start a hit with airplay.

Radio has suffered from centralized control of playlists for too long, and the music industry, artists and listeners have been the worse for it. Hopefully the GMR ruling is just the first of the many bricks that will fall from radio’s corporate wall.