There isn’t much that angers blue-collar workers than crony capitalism. From the giving of billions of tax dollars to politically connected hedge fund owners to prop up their “green energy” projects to the bailouts of Wall Street, cronyism is a stain on our political system. Yet insiders in Washington continue push schemes to assist their political benefactors and this time its the record industry.
The Recording Industry of America (RIAA) is pushing new legislation in Congress that would create a new “performance tax” on radio stations. The beneficiaries of the tax would be the Recording Industry of America. The misnamed “Free Market Royalty Act” has been introduced by Rep. Mel Watt (D-NC), a man who would be hard pressed to name a free market issue he has ever supported since his election to Congress.
For nearly a century, radio stations and record companies have had an agreement that performers whose music is played on the radio are not compensated because airplay is viewed as a promotional benefit to the artists. Even to this day, airplay is the chief factor is determining whether a song is a hit. More airplay means more sales. More sales mean greater grossing concert tours. Even the sales of ringtones, which are highly profitable for performers, are driven by whether their songs are played on the radio.
But now the record industry wants their cake to eat it too. They want radio stations to play their material but they want to be compensated when they do. Its a preposterous scheme to screw one industry to assist another. And let us not forget that it is recording industry artists who line up every four years to give political contributions to the Democrat Party and their candidate for president. They even lent their talents to the president in 2012 for fundraising concerts of the Obama campaign.
Now they want to cash in.
The bill would give the recording industry, through a non-profit entity they founded and control, the power to set the royalty rates that radio stations would have to pay. Talk about a screw job.
The real free market, not the Watt “Free Market Malarkey” bill, has already found a solution to this issue. Recently Clear Channel and Warner Music announced a private agreement to restructure Internet streaming royalty rates in exchange for compensating artists whose songs are played on the radio. The agreement shows there is no need for government to come in and try to assist one industry at the expense of another.
The Watt bill is the latest attempt at cronyism. Hopefully Republicans, and some Democrats, will be smart enough to “just say no.”