Politics & Policy

Off Tune: The Grammys’ Crony Capitalists

An anti-competition law would shower favors on the music industry — and on Democrats’ donors.

The power and influence of the music industry was on full display at the Staples Center in Los Angeles on January 26, when industry bigwigs gathered for the 56th annual Grammy Awards. The big news coming out of the industry powwow was not who won but the gimmicky mass wedding of 33 gay and straight couples, accompanied by a song that openly assaults traditional values.

The power of music in influencing public opinion cannot be disputed. Liberals love to reminisce about the power that the music of the 1960s had in changing America’s opinion of the Vietnam War. Conservatives should not forget that dissidents in the former Soviet Union and their satellite states recall the influence of Western culture — in particular rock ’n’ roll — in bringing down the Iron Curtain. History is replete with musicians and artists using their talents to spread political messages.

The problem is not so much that musicians want to affect culture or politics, but that crony capitalism pervades the industry as a whole. Rather than influence public opinion through words and tunes, music-industry lobbyists seek to change the law through political contributions, influence, money, and power. It’s not the great cultural issues of the day they seek to shape; rather, they lobby for the financial well-being of billion-dollar corporations that dominate the industry. It is foolish to underestimate their influence.

An army of lobbyists for the music industry has used state power to protect the industry from competition and innovation. In stretching the length of copyright terms, in trying to censor websites, and in myriad other efforts, the Recording Industry Association of America (RIAA) scours Washington for opportunities to use the state to benefit the industry.

For decades, there has been a covenant between the recording industry and radio. Recognizing the power of airplay, performers allow their songs to be played because it is the number-one driver of record sales, concert tickets, and merchandise. Now the RIAA is looking to have its cake and eat it, too: The recording industry wants the continued benefits of airplay, but with compensation on top of it.

The latest push is legislation that would force radio stations to pay the recording industry a “performance tax” when they play songs on the radio. Originally introduced by Representative Mel Watt (D., N.C.) and now championed by Representative Judy Chu (D., Calif.), the bill seeks to change generations of copyright law and tilt it in the record industry’s favor. In addition to requiring royalties payments, the bill grants the industry monopoly power to collude to set royalty rates and makes illegal any individual negotiations between labels and broadcasters.

It makes sense for Democrats to push a one-sided abuse of government power for their favorite political benefactors. One would think, however, that this interference in the marketplace would be anathema to Republicans. But no one should underestimate the power of the industry — some industry champions, typically conservatives in their rhetoric and voting habits, are promoting this egregious bill as well. Worse, they are attempting to sell it as a free-market proposal.

In full equivocation mode, two House Republicans, Marsha Blackburn (Tenn.) and Doug Collins (Ga.), recently wrote at Breitbart that they believed “the best way to determine the cost of goods is to leave it to the free marketplace.” Then, just a few short sentences later, they endorsed the government-granted monopoly contained in the Watt/Chu bill. Though the bill outlaws market forces, Blackburn and Collins claim it would “bring real parity between all music platforms.”

Blackburn, Collins, and, indeed, the industry itself well know that setting royalty rates between radio stations and record companies does not require legislation. Some labels are already privately negotiating deals to encompass multi-platform royalties and, yes, even include royalties for radio play. But embracing these types of deals requires the hard work and the give-and-take that markets need — something the industry as a whole apparently wants to avoid.

Anyone who spent 15 minutes watching the Grammys knows the politics of the industry. What’s less obvious to many are the crony machinations at work behind the scenes. Conservatives should see the industry’s efforts for what they are: big-government rent-seeking. And they should treat it accordingly.

— Jerry Rogers is president of Capitol Allies and founder of the Six Degrees Project, an independent, nonpartisan effort that promotes entrepreneurship, economic growth, and free-market ideals.


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