http://www.a2im.org/newsDetail.aspx?newsID=169 :
A Modest Proposal For Government Intervention
TOMMY SILVERMAN
Now that the government has bailed out the banking system, it should take action to rescue the four major labels and the independent companies represented by Merlin. The U.S. recording industry, worth $14 billion in retail value when George W. Bush took office, has fallen to $9 billion today.
Could it be a coincidence that the music industry boom ended in 2000, just before the 8-year slide in the American economy? Music has been one of America’s most important exports, as our inventions; jazz, blues, rock & roll and hip-hop are all enjoyed worldwide. Rock & Roll did more to bring about the fall of the Soviet Union than the CIA. A strong music business is a matter of national security.
The precedent for government intervention is well established. This year alone, Congress has authorized $25 billion in loan guarantees for Fannie Mae and Freddie Mac, a $700 billion asset relief package for banks and a $25 billion bailout for Detroit automakers. If they’re helping Motor City, shouldn’t they do something for Motown?
Anyone who has been to Midem or any international trade conference is aware that virtually every other country supports its music business. Our neighbors to the north get subsidies for Canadian recordings and videos, as well as content rules for airplay on radio and television. The U.S. government spends nothing to support the American music scene Zero dollars to support the vital American music scene throughout the world.
As a result foreign artists like Feist and Amy Winehouse have been winning Grammy Awards right here in the U.S. Could we face a future where the only American Grammy winners will be in the Polka category?
Of the four major labels, only the Warner Music Group is an American company; the others are owned by the Japanese, British or French. Just as the government prevented a Dubai company from safeguarding American ports, it should take steps to stop rock & roll from slipping away to foreign control. At the very least, they should fund the purchase of the Elvis Presley catalog back from the Japanese.
Like the auto industry, the music business needs loan guarantees to retool to adapt to new technology. The government should fund a five-year, $25 billion loan package industry to pay for artist development and marketing and retooling for and adaptation to new technologies during the transition period. As a condition, it would limit salaries and bonuses and temporarily eliminate golden parachutes for top executives.
The labels could also benefit from FCC rules requiring all radio stations to play at least 50% American content, at least 50% developing artists and at least 30% independent acts. The budget of Voice of America should be increased, from $160 million to $300 million a year, and Scott Shannon and Barry Mayo should be appointed to run the organization. Their mission would be to increase audience from 94 million to 2 billion while using American music to influence foreign culture.
Between 2000 and last year, the number of new releases rose from 35,515 to 79,695, according to Nielsen SoundScan. This increase in production has created an album glut, which the government could reduce by paying labels not to release albums, as it has done for agricultural commodities. It should also establish a fund to buy back 20% of all U.S. artist CD returns, which it could then distribute to developing nations to further spread American influence.
What remains perfectly clear is that the recording industry is ripe for a government bailout, long overdue for the support that almost all other countries recording industries get. The industry is worthy of that investment as benefits accrue not only to the companies but also through trickle down to publishers, radio, venues, artist managers, booking agents, merch companies, CD and component manufacturing facilities, recording studios and their employees. Through a strong American music business and strong American music, we bolster consumer confidence which, at its core, drives the financial markets and America’s standard of living.
The U.S. spends around $695 billion a year on defense so it would be a bargain to support the American music industry and stabilize National and global security. Now, more than ever, America needs the recording industry’s creative musical genius to infect the world with the sound and soul of America. ••••
Tommy Silverman is founder/owner of Tommy Boy Records (tommyboy.com).
