Lawmakers Introduce Pandora-backed Music Royalty Legislation
In the past few
years, people’s preference in how they consume music has reached a new level of
listening sophistication that is unique to each user. With the iPod and
handheld music device craze, radio saw a sharp decline in listeners that is now
limited to in-car listening to and from work or school. The notion of being
able to select your own songs within
an album instead of purchasing an entire album, and then carrying that music with you
in your pocket instead of a car or stationary radio forever changed the music
industry. However, the iPod is no longer enough to satisfy music lovers, where
recently people seem to be migrating towards the personal radio characteristics
of Pandora or Rhapsody. These subscription-based services allow unlimited
streaming at minimal costs of monthly payments. A deal that supersedes the
costs of buying songs on iTunes, these Internet radio stations are catering to
the classic style listening style of music being on a radio while also
modernizing the taste buds of the technological generation.
Even more so,
personal radio listening is changing from only online streaming to now offline
streaming availability of content through services like Nokia Music. Yet, the
personalized Internet radio is at a disadvantage to the classic radio due to
high tax legislations on personalized radio station companies. Recently,
lobbyist want to bring Internet radio under the same Copyright Act as regular
radio stations. The reason being is that personalized, Internet radio stations
face a 55% tax rate, while regular radio is between 7 -16% (Martinez). This drastic gap
in taxes for Internet radio is preventing the growth of the music industry’s
revenue and that “this bill puts Internet radio on an even plane with its
competitors, and allows the music marketplace to evolve and to expand” (Martinez).
However some musicians are against reforming this legislation because it will
mean less royalty payments for them, as well as less performance rights for terrestrial
radio (Martinez).
Personally, I
understand the notion why personalized Internet radio wants to be on the same
playing field as the classic radio stations, but Internet radio is far more
different fundamentally. Internet radio allows unlimited streaming of content over and over
with a small fee and a few banner advertisements. Users can ignore these ads
and simply listen to their music, or they can even subscribe to remove the ads
on their interface. Radio, however, has commercials, hosts, interviews, and so
much more that make it entertainment. With Internet radio you bypass all
aspects of radio and it is simply just listening to music and also being able
to select your own music instead of a
disc jockey broadcasting a playlist for you. Yet, I do see the large differential in taxation between the two styles of radio and that although I do not feel that Internet
radio is the same as classic radio, I do think the taxation on Internet radio
should be lowered to allow for music industry expansion, but to not that same
tax percentages as regular radio.
- Martinez, Jennifer. "Lawmakers Introduce Pandora-backed Music Royalty Legislation."The Hill. N.p., 21 Sept. 2012. Web. 21 Sept. 2012. <www.thehill.com>.
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