iHeartRadio Is On the Wrong Side of History When It Comes to Royalties (Guest Column)

iHeartRadio Is On the Wrong Side of History When It Comes to Royalties (Guest Column)

The business of music has transformed in the last two decades, driven by technology that shattered barriers to entry and creators’ determination to control their destiny. At the 66th Grammy Awards earlier this year, more than half of the nominees were independent. And it’s more than just business: the indie movement has enabled diverse voices that could not be heard previously to occupy their rightful place in the industry. This makes music, and our society, more egalitarian and better.

Whether blues, punk, hip-hop or country, America’s most recognizable music genres started out in the indie sector, and today the association I lead has more than 750 members across 35 states, and most of them are small businesses with less than 50 employees. As the music industry has changed, so have they.

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Yet, some of the most important players in the music ecosystem cling to a bygone era that was dictated by the motto, “Might Makes Right.”

Exhibit A is iHeartRadio. The corporate behemoth controls 860-plus stations across the country that play over 50 million songs a year. Those songs helped iHeart’s multiplatform group — covering broadcast radio and national sales — generate more than $2.4 billion in 2023 alone, according to its latest earnings report.

But iHeart is stuck in 1990. It doesn’t bother discovering new artists. Instead, it overplays the hits and milks classic songs that were released decades ago. Despite the growing movement to achieve economic justice, iHeart denies artists and labels payment for their work.

Take a moment to reflect on that. iHeart makes $12 billion a year playing music but refuses to pay the hard working and talented people who perform and produce the songs that are the reason consumers tune-in in the first place. In its desperate attempt to cling to the past, iHeart and lobbyist group the National Association of Broadcasters (NAB) have spent nearly $100 million since 2020 lobbying Congress and spreading campaign contributions around to maintain the unfair status quo. 

iHeart is powerful. But it’s on the wrong side of history. And it’s about to face what it hates most: a public forum where broadcasters must defend their craven practices. On Wednesday (June 26), the House Judiciary Committee will hold a hearing on the refusal of broadcasters to pay music creators for their work. 

Richard James Burgess speaks onstage during the GRAMMY Influencer Activation at GRAMMY House during the 66th GRAMMY Awards on Feb. 1, 2024 in Los Angeles.

Of course, iHeartMedia CEO Bob Pittman won’t testify. He leaves the dirty work to the NAB. But that doesn’t matter. When the issue of compensation for AM/FM airplay is held in a public forum, broadcasters lose. That is why their lobbyists work so hard to prevent congressional hearings. But courageous members of Congress such as Reps. Darrell Issa (R-Calif.) and Jerry Nadler (D-NY) are making sure there is a public debate. And they have a solution to ending the injustice: the American Music Fairness Act, which would grant an AM/FM performance royalty. This bill would bring AM/FM radio into the 21st Century, and finally grant American recording artists the same rights enjoyed by their counterparts in almost every other country on the planet.

In the last two decades, how we discover and listen to music has dramatically changed, and not just the move from vinyl records to streaming. We can now ask a device in our house, such as Alexa, to play music, and it does. Spotify and SiriusXM are now buttons next to AM/FM on the dashboard of our cars. Polling from 2020 found that of the people who regard staying up to date on new music as important to them, only 11% turn to AM/FM radio to do so. Even in my generation, that number is only 27%. OK, Boomers!

We need to update the laws to catch up to these changes. It makes no sense if, when driving, music creators heard on SiriusX are being compensated, but not if you hear them on an AM/FM station. If you listen to radio programming through the iHeartMedia app on your phone, through a smart speaker, or even in your car, iHeart has to pay creators too. That’s why they have their hand out to Congress asking for a mandate to keep AM radios in cars.

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The American Music Fairness Act brings justice and balance to the industry. Music creators get paid for their work. AM/FM stations have to pay just like the streaming services. And, because the legislation protects truly local radio stations, most stations in the country would pay just $10 to $500 a year to play music. 

I know independent music creators, who I represent as president and CEO of the American Association of Independent Music, could definitely use the income from those royalties. My members love partnering with true locally controlled community radio stations, but the behemoths usually don’t take their calls. There are hundreds of thousands of artists and other creators who hustle and struggle to make a living by giving us the music we love.

This approach is fair, it’s equitable, and it’s just. And iHeart hates it.

Broadcasters try to create as much fear, uncertainty, and doubt to avoid doing what’s right. They claim a $500 annual fee to play music would decimate stations’ ability to broadcast emergency communications – then they hike the annual dues it charges its members. They cling to the asinine rationale that the alleged promotional value of radio play justifies their immoral scheme. Worse, broadcasters claim they shouldn’t have to pay for the songs they play while demanding Congress get more money for them when their content is used by YouTube and other platforms.

Broadcasters do all of this with a straight face. But time is running out. When the arc of justice comes around, iHeart and the National Association of Broadcasters will learn they are on the wrong side of history.

Dr. Richard James Burgess is an acclaimed musician, singer, songwriter, record producer, composer, author, manager, marketer and inventor, who presently serves as the president and CEO of the American Association of Independent Music (A2IM).