President Bush Visits Nashville, Discusses Budget (Doesn’t know that artists and labels earn no royalties from terrestrial radio broadcasts, unlike songwriters and publishers.)
Q Mr. President, music is one of our largest exports the country has.
Currently, every country in the world — except China, Iran, North
Korea, Rwanda and the United States — pay a statutory royalty to the
performing artists for radio and television air play. Would your
administration consider changing our laws to align it with the rest
of the world?
THE PRESIDENT: Help. (Laughter.) Maybe you’ve never had a President
say this — I have, like, no earthly idea what you’re talking about.
(Laughter and applause.) Sounds like we’re keeping interesting
company, you know? (Laughter.)
Look, I’ll give you the old classic: contact my office, will you?
(Laughter.) I really don’t — I’m totally out of my lane. I like
listening to country music, if that helps. (Laughter.)
Maybe creating a performance royalty may not be a bad idea if radio listeners do buy less music than non-radio listeners. The NY Times reports, Radio Listeners Seem to Buy Less Music: “Very roughly, an hour’s worth of radio listening per person per day, over the course of a year, corresponded with a 0.75 drop in the number of albums purchased per capita in a given city.”
Here’s the full paper on SSRN: Stan Liebowitz, The Elusive Symbiosis: The Impact of Radio on the Record Industry (March 2004)
“The reason for the weaker copyright protection on sound recordings relative to movies appears to be that radio broadcasters have argued, and it is generally accepted, that radio play benefits record sales and thus there is less need for radio broadcasters to purchase the rights to broadcast the sound recording. This impact of radio play on record sales is commonly referred to as a ‘symbiotic’ relationship between these two industries and is often mentioned by radio broadcasters as a reason for keeping rates low, at hearings to set copyright payments. Yet there appears to be no systematic examination of this relationship. In this paper I present evidence indicating that radio play does not appear to benefit overall record sales.”