TO: Interested Parties
FROM: musicFIRST Coalition
DATE: August 3, 2021
RE: Questions for Broadcasters Ahead of Q2 Earnings Calls
The dominant U.S. broadcasters (iHeart, Cumulus, Audacy and TownSquare) will hold their quarterly earnings calls this week. These are particularly noteworthy because they will provide insight into how the broadcasters view their financial prospects relative to the pandemic and it’s their first financial report since legislation was introduced to require broadcasters to compensate artists and other music creators when their music is played on FM/AM radio.
Given that, the musicFIRST coalition — the voice for fairness and equity for music creators — believes radio executives should answer questions about the future of music.
- Are broadcasters bullish about their financial future?
If so, can these dominant corporations that generate billions of dollars every year continue to cry poor to Congress when asked to pay artists for the use of their music?
Companies like iHeartRadio generate billions of dollars in revenue every year and regularly crow to investors about their financial strength. But somehow It’s only when artists and music creators come calling for fair payment for their services that these broadcasting barons can’t seem to find two nickels to rub together.
But broadcasters have been quite clear — including in their Q1 earnings reports — that radio is already bouncing back strong. For example, iHeartRadio said at the time that they “remain confident” that their revenue will boomerang back to pre-pandemic levels this year — an outlook that was further supported by analysts who projected that advertising spending would “come roaring back over the next several months.”
- Why are music creators compensated for their work essentially everywhere else but on FM/AM radio?
Music creators are paid when their music is played on digital services such as SiriusXM, Spotify, and Pandora. In fact, music creators are paid when the FM/AM stations simulcast their programming on the Internet. Same songs, same stations, just a different delivery mechanism. That doesn’t make sense.
Americans agree. According to a recent survey, by a 2-1 margin Americans believe it’s unfair that artists are not paid when their music is played on FM/AM radio. The lack of understanding of the plight of music creators has certainly made it easier for the billion-dollar corporations that control radio stations to get away with this injustice. A full 60% of Americans report they were not aware that music creators were not paid when their music is played on FM/AM stations.
- Do iHeart and other dominant broadcasters intend to continue the cycle of acquisitions and layoffs at local radio stations?
After a decade of acquisitions, the top four broadcasters own nearly 2,000 radio stations around the country. As much as the National Association of Broadcasters likes to tout “local radio,” many stations are simply affiliates of conglomerates. Along the way, they have decimated local radio with layoffs.
iHeart, a billion-dollar corporation that owns 850 radio stations, has been systematically cutting DJ and other jobs across the country. In doing so, it’s increasingly relying on non-local programming dictated by its corporate office. Many of the latest round of layoffs occurred in 2020 during the most distressing period of the pandemic.
Music site savingcountrymusic.com put it best: “They’re replacing employees for algorithms, eliminating local and regional talent for more national programming, and generally eliminating the last element that makes radio interesting and important, and able to compete with streaming services and podcasts in the digital age: a local personality to connect to and to serve you music, sports, and news with a local perspective.”
As iHeart engineered what was termed a “bloodbath” of layoffs over the last year, its stock price soared – up 220% since June 2020. Let’s follow the math: local workers lost their jobs, music creators didn’t get paid for their work, but iHeart executives’ stock options soared. Entercom, which recently changed its name to Audacy, joined iHeart in conducting nationwide layoffs. In doing so, they fired local DJs in many markets.
About musicFIRST
musicFIRST works to ensure music creators get fair pay for their work on all platforms and wherever and however it is played. We rally the people and organizations who make and love music to end the broken status quo that allows AM/FM to use any song ever recorded without paying its performers a dime. And to stand up for fair pay on digital radio — and whatever comes next.
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