Recording Industry Seeks a Bailout

The Washington Times notes that the lobbyists for the recording industry -- the same recording industry that raised millions of dollars of President Obama's re-election -- are up on Capitol Hill demanding the imposition of a new tax that would go directly into the pockets of their CEOs and companies.

In fact, the bill is worse than the Washington Times describes.  Introduced by liberal Rep. Mel Watt, H.R. 3219 would create a royalty tax on AM/FM radio stations.  The tax rate would be imposed by a non-profit called the "Sound Exchange."  The Sound Exchange is a creation of, you guessed it, the Recording Industry of America (RIAA).

For over 80 years, radio stations have given artists free airplay.  Every musician who ever cut a song has prayed for their songs to be played on AM/FM radio because of their reach to the public.  Even today, despite iPod and other forms of delivery, airplay touches over 240 million listeners.  Free promotion means record sales and concert sales.  

But now the greedy recording industry wants Congress to force the radio stations to pay the recording industry when they play a song.  They want the promotional value of airplay and they want the radio station to pay them for the privilege.

Thankfully some members of Congress are finally getting a spine and standing up to the recording industry.  Rep. Mike Conaway (R-TX) has introduced the “Local Radio Freedom Act,” a resolution that opposes a new performance tax on local radio stations. A companion bill, S. Con. Res. 6, was introduced in the Senate by Sens. John Barrasso (WY). This legislation is supported by more than 170 bipartisan members of the House and 12 senators. That is still not enough to stop the Watts bill but it is a start of a strong firewall.

The Watt's bill is a non-starter for people who support a free market and oppose government price fixing monopolies.  We will be watching to see how many Republicans are willing to throw aside principle for a few thousand dollars in campaign contributions. 

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