PUBLISHED: 8:47 PM 22 Nov 2017

Artists Demand Bigger Cut, Radio Execs Claim “Rate Envy”

Irving Azoffs, founder of Global Music Rights, claims that the musicians he represents are not being properly compensated for their music by the radio stations.

Irving Azoffs, the founder of Global Music Rights, claims that the musicians he represents are not being properly compensated for their music by the radio stations.

Some of the biggest names on the radio are lobbying the radio stations, demanding a boost to royalties paid for playing their songs. These musicians further say that without such a concession, they are going to disallow the playing of their songs on the radio, making your daily drive a much more boring affair that will go on without some of your favorite songs. In response, radio stations say that the musicians are suffering from “rate envy” due to the rates they receive from Pandora and similar streaming services.

Jon Bon Jovi, Bruce Springsteen, Steve Miller, and nearly eighty other musicians and superstars have come together, joining supermanager Irving Azoff’s attempt to force these radio stations to boost the payout to the singers, songwriters, and musicians when their music is heard on the radio. According to Azoff, the payments to stars haven’t changed in decades, and unless something is done, the starts will withdraw their permission for playing this music.

Jon Bon Jovi is one of the most profitable bands in existence, but they still demand that their compensation from radios be increased five-fold.

According to Jon Bon Jovi, “This isn’t about the guy in my position, but about my buddies who are very good songwriters who try to make a living just songwriting.”  The irony of this situation should not be lost, as it was Jon Bon Jovi’s harassment of a disc jockey in Long Island, NY, which eventually led to his ‘big break’when the DJ gave in and finally played a demo reel for Bon Jovi’s music.

Bon Jovi, a big name whose songs can be heard on the radio almost every day, made 40 million dollars with his last tour, and like with most bands, derives the majority of their income from not only ticket sales, but sales of collectible merch such as tour t-shirts, posters, and other memorabilia. However, Bon Jovi, as a band, desires even more money from radio stations, who currently pay them less than they make from streaming services like YouTube, Pandora, and similar services.

Azoff, who has represented Bon Jovi and other big-name acts like Christina Aguilera and the Eagles, along with Randy Grimmett, founded an organization called Global Music Rights. Global Music Rights is now demanding that radio stations pay more than a 20 percent share of the ad revenue to big-name artists like Bon Jovi and Springsteen, or else they won’t be able to use their music on the radio anymore.

Irving Azoff, head of Global Music Rights, is seeking additional money for famous artists from radio stations that are struggling to operate as-is. He has worked in ‘the biz’ for quite some time, including as a manager for Bon Jovi.

In response to this attempt at what seems like little more than highway robbery for bands that are already wealthy thanks to touring, corporate sponsorships, and merchandise sales, radio stations sued Global Music Rights. Not to be outdone, Global Music Rights responded with a counter-suit.

The initial lawsuit accuses Global Music Rights of acting non-competitively, according to documents filed by the Radio Music Listening Committee. RMLC Executive Director William Velez suggest that it is rate envy that is fueling the demand for greater royalties, suggesting that Global Music Rights thinks they can get the same percentage from the 10,000 radio stations RMLC represents as they can from Pandora. Velez says that he “would be comfortable with maintaining the status quo”, but that stations will not, and could not, pay more than 20 percent of their advertising revenue to artists for the use of their music.

Bruce ‘The Boss’ Springsteen with his signature Telecaster guitar. Springsteen built a reputation on being a ‘working class’ man despite limited experience working and is now demanding at least a 20 percent increase in payments from radio stations run by actual working-class people.

In response, Azoff’s filling calls the RMLC “a radio music listening cartel – that’s what their behavior depicts,” he says, continuing on to say “When it smells like a cartel and acts like a cartel, in my language, that’s a cartel.”

While Pandora and YouTube offer large percentage, radio has maintained at around a 4 percent payment rate for music used on the air.  Most bands, however, have not attempted to rock that boat or to change the deal, and for one very important reason: radio still rules supreme, despite streaming services gaining slightly in popularity.

As recently as the early 2000s, there were still recording artists and record labels that were paying radio stations to play their music, hoping to get discovered by a wider audience. To this day, there are still bands, especially smaller bands, that will play shows for radio stations for free, in order to get better known by the music-consuming public as a whole.

Though it is hard to foresee the outcome, the possible outcomes are not the greatest.  The radio industry is not an extremely profitable industry, and loss of 20 percent or more of their ad revenue could cause very real problems financially.  On the other hand, not being able to hear popular music on the radio could also have a negative impact on the radio stations.  Most important will be to see the outcome of the lawsuits.