The truth about the “Performance Tax”

Lately there has been a lot of buzz in the radio business regarding the “Performance Tax” legislation being tossed around Washington and on Capitol Hill. This “Performance Tax”, known as The Performance Rights Act, would change law so that AM and FM radio stations would pay performers to play their songs, as is true of satellite, cable and Internet music services. All four music platforms pay songwriters for use of their work.

The Honorable Rep. John Conyers, (D- Michigan) who represents a portion of Detroit, Dearborn, as well as Highland Park and Hamtramck, authored this piece of legislation.
Cries have been heard that this legislation would kill “free radio”, and that it would adversely affect minority-owned radio stations. The other side of the issue cries that they have been cheated for years out of performance rights for their songs being aired on.

In Rep. Conyers district there are a lot of retired performers from the heyday of Motown Records and he is showing a reactive stance toward these folks in his district. But there are many truths that seem to be glossed over here in this issue.

First off, these performers will not receive 100% of this “Performance Tax” collected from radio stations, but only 25%. 50% of the monies collected from this “Performance Tax” will go to the record companies. And this is where I think this whole issue stinks to high heaven.

For many years, record companies have been pushing their product on radio stations to play for free, helping to generate billions of dollars for the record labels on the backs of these performers, as with the case of those retired Motown artists that basically were shafted out of money for years. And radio has played them for FREE…not charging the record companies for air time like they do advertisers and specialty programs.

In this proposed legislation I see no guarantee that any of this “Performance Tax” to be collected would ever find its way into the hands of the actual performers. How I see it, this bill will send money to the record companies, with the biggest ones being foreign owned, thus sending this money overseas for the record companies to decide how much to give the performers.

The record industry has been operating under a failing business model for many years, just like the government says General Motors has been, forcing bankruptcy filings. Record labels regularly send multiple copies of the same song on CD to one radio station, which costs money to replicate these CDs, package and mail them out. They hire people to continually call radio station program directors and pester them to play their song. And they do this for over 4,000 stations in the US. And now they have the gall to charge radio stations for playing artists that they beg us to play.

In testimony on the hill, John Conyers has said “Your will pay us.” Who does Mr. Conyers mean by us? Is this a veiled front for his becoming a lobbyist for the record companies? Mr. Conyers’ ethics as a legislator has been called into question before. In letters sent separately to the House Ethics Committee, the FBI, and the US Attorney's office by two former aides of Conyers in 2006, allegations were made that Conyers used his staff to work on several local and state campaigns and forced them to baby-sit and chauffeur his children. Conyers "accepted responsibility" for possibly violating House rules in this matter.

Conyers wife Monica, Detroit City Council president pro-tem, also has had some ethics problems as well. In January 2009, Detroit's General Retirement System notified Monica Conyers that she owed $5,600 to the City, which included travel advances not spent on business class airfare to London. The pension board also claimed she hadn't submitted receipts for trips to Grand Cayman and Philadelphia. In April 2009, one day after denying the relation, Monica Conyers admitted she helped her brother, Reggie Esters, a convicted felon, obtain a city job that was originally to last four months, but was extended to two years, ending only when Esters' absenteeism became an issue. Esters is reported to have submitted a false resume.

It’s easy in these hard economic times to get riled up when someone has been wronged economically. But radio is not the enemy here. Radio has faithfully promoted performance artists for free on stations over the years, their performances sent to stations on “promotional copy” records and CDs. Last time I checked, the cost of promoting recording artists is the responsibility of the entity wishing to promote them, i.e.: the record companies, not the recipient of the promotional items.

Record companies have had their hands in the pockets of performance artists more and more…record and CD sales, merchandising, and even a percentage of the take at live concerts. I think it’s time that the record industry give back to the performers instead of collecting even more money from radio to line their pockets even more, giving a mere pittance of what they obtain to the artists.

John Conyers and his ignorance to the actual “bad guy” in this whole situation is just another thing from my home town of Detroit that I am embarrassed of. Thank goodness for the Red Wings!