Who Killed the Radio Star? How Music Blanket Licensing Distorts the Production of Creative Content in Radio

Photo by Eric Nopanen

According to popular and scholarly belief, video killed the radio star. The golden age of radio, culminating in the 1930s and 1940s, was gone with the rise of television in the 1950s and 1960s.

In their new article, titled ‘Who Killed the Radio Star? How Music Blanket Licensing Distorts the Production of Creative Content in Radio’ and published in the American University Law Review, Dr. Eden Sarid, Lecturer in Law at the University of Essex and Prof. Ariel Katz, Associate Professor at the Faculty of Law, University of Toronto, advance the argument that television’s role in the “death” of the radio star has been more limited than commonly believed.

A major culprit, the authors argue, is the common licensing practice of musical content for broadcasting, or more precisely, the blanket license issued by copyright collective management organizations (CMOs). CMOs offer all-you-can-eat blanket licenses that allow broadcasters to use as many songs from the CMO’s repertoire as they like for a fixed fee.

Thus, by setting a zero marginal price for broadcasting additional songs from the CMO’s repertoire, CMOs’ blanket licensing drives commercial radio stations to dedicate a larger portion of their programming to the broadcasting of recorded songs and to reduce the time and resources spent on producing or procuring other content.

The article then reveals that the analysis of blanket licenses should not be limited to their static effects (i.e., the trade-off between lower transaction costs and supra-competitive pricing), but it should also include the dynamic effect of blanket licensing on the type and quality of content production.

This dynamic effect also poses a challenge for copyright law and policy: while collective licensing may be beneficial to one class of copyright holders, it may hinder the production of other content and harm creators of such content, by depriving them of important opportunities for market and cultural participation.

Moreover, the article provides a novel explanation for the well-documented phenomenon of the “death” of the radio star and re-evaluates some of the existing explanations.

Finally, the authors discuss some alternative models for music licensing that can mitigate the distortion created by blanket licenses.

A copy of the article can be accessed on the University’s research repository.

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