Promotional effects and the determination of royalty rates for music

Thomas Beard, George Ford and Michael Stern

Journal of Media Economics, 2018, vol. 31, issue 1-2, 27-35

Abstract: When a terrestrial radio station plays a song during its over-the-air broadcast, the artists and their record labels receive no compensation for the sound recording right. Yet radio’s digital competitors – including streaming services and satellite radio – do pay performance royalties to performers and their labels for the sound recording. Terrestrial radio’s cost-advantage is not the result of marketplace deals or competitive forces, but from a statutory preference granted to radio broadcasters. Legislation aimed at leveling the playing field has been strongly resisted by broadcasters based on the claim that radio provides a promotional effect, or free advertising, for record labels and performers. In this article, we demonstrate that any promotional effect is fully internalized in a marketplace bargain between the music and radio industries. As such, a promotional effect provides no basis for federal law to mandate the free use of music by the radio broadcast industry.

Date: 2018
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/08997764.2020.1754227 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:jmedec:v:31:y:2018:i:1-2:p:27-35

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/HMEC20

DOI: 10.1080/08997764.2020.1754227

Access Statistics for this article

Journal of Media Economics is currently edited by Nodir Adilov

More articles in Journal of Media Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().