Why Music Licensing Bodies Are Killing The Very Industry They Seek To Protect

In the last couple of years music licensing bodies, such as the PRS and PPL here in the UK, have been getting their heads together to work out how to extend their reach onto the web, and how they can regulate webcaster shows and internet only stations.

This year this has been achieved but the direction set by the bodies is, at best, misguided, and at worst a controlled from elsewhere attempt to delay the small, nimble but quickly growing stations like RRO, small independent record labels and indeed unsigned bands and artists from growing whilst the big boys, slow to adapt to the brave new frontiers, get their act together.

On the face of it, all they have done, they will argue, is bring the terms and conditions for internet only stations in line with the bricks and mortar radio stations. But the truth is, those exact DAB/AM/FM policies have already destroyed true local radio stations by making it too costly, too onerous for them to continue. Take a look at most of those local stations still broadcasting- at who now actually owns those stations. Local is not local anymore. So diversity across broadcasting has become uniform, has become consolidated into the hands of conglomorates who include stations, labels and publishers. And so everyone is sounding like everyone else. And such uniformity is not a good thing for any industry to accept, as originality breeds more originality and more growth and more interest, and without growth, then any entity or group of entities will slowly decline and die out.

Furthermore, the licensing bodies have failed to understand that a net station is not, and does not want to be, like the big boys. We provide a range of quirky features that our listeners enjoy, engage with and come to listen to simply because we do not sound like the formalaic big boys, they like the fact that we are not the same format, that we do something different.

Or did.

Basically, to be a legal station in the UK we now have to drop those quirky features. Trinity for example on my rock show, was a feature where listeners could pick any 3 songs with a theme or link, and have them played. That theme/link could be all the songs are about Gods, or are their favourite 3 songs ever, or 3 songs by their favourite band or from their favourite album. The latter two are now no longer allowed.

But as annoying and as frustrating as these changes are for us, there are far wider ramifications.

The new banding for a webcaster licence looks, on the face of it, a good deal. Indeed, the entry level licence from both bodies is affordable for most of the bedroom broadcasters. But look more closely, and you'll see it's very easy to move into band 2. Just around 10 additional listeners per day will do it (that's just 10 for the year, not 10 on Monday joined by another 10 making 20 new listeners on Tuesday etc). But Band 2 is twice the cost of band 1. Band 3 is also easily reached with just a few additional listeners but that is twice the cost of Band 2.

But what we small, fledgling stations actually need is to be able to grow organically. That is, add new listeners slowly over the year, so we can start to sell merchandise and add advertising revenue to pay the cost of the licences. And we need to do that without worrying that a small increase in listeners could actually double our costs. In other words, any increase in numbers needed to grow our potential revenue through advertising and merchandise needs to be huge and all in one go, so that licensing increases can be negated by having a critical mass of listeners. Given that we don't have the money to do the massive advertising campaign needed to achieve such sudden growth, we simply cannot make enough money on the small number increases we can achieve to make it worth while . In effect we need to go from Band 1 to the top band in terms of listeners in one quick step to stand any chance of covering the increased licence costs.

I think I just heard the big media companies snigger at that, because of course here's the reality. Radio advertising is a shrinking pot. Big publishers, who now own local, national and international brands, don't want to see their share of that pot decrease, so what better way to stop it by pricing out those who can't afford to chase the advertising revenues in the first place.

And the licensing bodies have just delivered exactly that.

So, that's already TWO actions that have delivered benefits to the big boys at the expense of small independent stations trying to do the right thing. No wonder those big boys are feeling smug right now.

However, as bad as this is, the additional ramifications for the wider industry are even more dire. And it will come back to bite them in the ass too.

Basically, one thing that we can do that the larger stations can't do, is give airplay to new bands and unsigned artists on an almost daily basis. Sure, we play all the classics and all the big bands, but we also, like many other independent stations, play local bands, new bands, bands from other countries, unsigned demos- in effect bands and artists get played and noticed. What we do is only small, but it gives them hope, it gives them sales and bookings, it gives them feedback and it gives them confidence to keep growing.

But what will they have when we all have to fold because of the costs? Will the big boys allow them the same access to the airwaves? I think not.

So the industry as a whole loses out on new blood, new sounds, new creativity. Artists lose faith, they go back to the 9 to 5 and we all lose out on someone who could be the next Pink Floyd or the next Ronnie James Dio. The sad truth is that rock especially cannot live on Deep Purple and Led Zeppelin forever, and as good as Stone Broken are, they cannot sustain the entire industry. Not even one station for that matter.

In other words, without new acts coming through, labels lose new signings delivering new revenues. Stations lose new songs to play. Independent labels lose acts to sign. Publishers lose new acts to write about. And everyone runs around in slowly but ever decreasing circles. The big boys will still be the big boys, but the ocean will have dried up and become a pond.

There's one more really damaging aspect to this as well. Pirate stations are a blight on the industry. Not only do they not pay the fees, most of them source the music illegally too. The changes in license banding (and additional breakout costs that further increase the costs) give those pirates a ready made excuse to justify their continued damaging activities. "I couldn't pay that much anyway so why bother now?"

Worse however, it may also push others who are currently legal to decide to wing it and not pay the licences as well. Sadly, some, like us, who will never accept piracy, may close our doors because we can't afford to continue. In other words, pirate stations will increase as legal, independent, licence paying stations disappear.

No new bands. No independent stations. No growth. Every one loses out simply because the big boys want to protect their advertising revenue and make up for other loses on subsidary publishing payments. And in the end, the big boys too will lose, because music will have no intrinsic value and without value, money moves elsewhere.

How did this happen? Surely licensing bodies were created to protect artists and musicians? To help independent labels and stations work together and bring new acts through for larger labels and stations to then sign up?

Yes they were. Originally. But the focus has changed. Now they protect publishers and labels. It isn't about the song writer anymore, but the publisher. It isn't about that independent artist looking for crumbs from airplays, it's about labels protecting their investment. To that end, they have all combined to massively influence lawmakers in the EU and America (some would say bribe) and introduce draconian regulations. Want to play White Wedding on your Youtube wedding video? Pay the publisher first. And then they worked together to enforce borders on the internet, supposedly to protect publishing rights, but once again putting control of the music industry in the hands of the conglomorates who work across physical borders.

Sadly, I don't think the licensing bodies have realised just how far they have deviated from their original intentions. But they have.

And unless they change their direction, the licensing bodies will oversee the end of the very industry they were set up to protect.

---

Note: The sentiments expressed in this blog are the personal views of the writer and not RRO.