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Hollywood Eschews Competition, Seeks Monopoly

America was feted this week to yet another entertainment industry exercise of self congratulations. The Academy Awards, like most other awards shows involves a group of industry insiders voting to give awards to each other for everything from good song to good script. Yet, award winners can’t compete for the awards. In fact, anyone caught in any act that could be construed as “campaigning” (or possibly disagreeing with the liberal orthodoxy) is rapidly dispatched.

This aversion to competition runs throughout the big content industry, especially in the recording industry. The Recording Industry Artists of America (RIAA) has a long history of using government to shield themselves from new technologies. Now, the RIAA apparently wants to shield record labels from competing with each other.

As far back as Bing Crosby and Frank Sinatra, the recording industry has passionately sought to institute a performance tax for songs played on the radio. The concept of performance royalties is gaining steam amidst declining revenues in the digital age. Some of the proceeds would go to the artists and some would go back to the pockets of the recording industry insiders.  Certain record labels have already cut deals with radio stations that offer reduced royalties for steaming music in exchange for royalties for airplay.  These type of deals are the result of market place negotiations — a classic give and take. If allowed to continue, these types of deals would force record labels to compete with each other and keep pricing in line with market rates.

Characteristically, the industry is turning to government for help. They are not only  seeking to mandate royalties with federal law, they are seeking to avoid any market pressures created by competition. The legislation, ironically known as the “Free Market Royalty Act” would not only require artists be paid royalties for airplay, but it would grant record labels the monopoly power to collude and set one standard rate. Once this rate is set, individual negotiations would be outlawed.

The centralized monopoly price setting allows the industry to jack up rates and offer radio stations a take it or leave it deal. Yet, the industry talking points insist that this scheme is somehow free market principles at work.

Of course, they also fought for, and nearly won, the power to shutdown websites without due process, based simply on the accusation of copyright infringement. This too was somehow free market policies at work from the industry’s perspective.

Perhaps this makes sense in a industry filled with adulation for the likes of Hugo Chavez and Fidel Castro. The whole RIAA agenda is “free market” just like Venezuela and Cuba are democracies.

Here in the real world, this policy would be a travesty. It would be another in a long line of crony giveaways to an industry that has long exceeded its constitutional boundaries. The power that would be granted to the recording industry to control radio stations would irreparably change radio stations and their listeners. No industry should be conferred by government with  power over another industry let alone one that openly supports communist dictators and tyrants.

 

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