performance

Editor's note: RAIN will return Thursday, July 5. Happy 4th of July!

Actually, it's Forbes contributor John Villasenor who this week makes the case that not only should radio pay artists (and labels) for the music they play -- but that by maintaining an unlevel royalty playing field between broadcast, satellite, and Net radio, Congress is impeding innovation.

Broadcasters are exempt from paying royalties for sound recordings, it's argued, because their play drives record sales. And new forms of radio pay royalties because the content attracts audience and drives those businesses. But, of course, as Villasenor writes, "if airtime on traditional AM and FM stations drives sales, so, too, can exposure through cable, satellite, and Internet radio. And... playing artists who people want to hear, broadcasters of all stripes attract more listeners, and can therefore charge higher fees to their advertisers or subscribers."

Villasenor calls on Congress to end terrestrial radio's performance exemption, but, "and in some respects more importantly in the long run given the inevitable transition to digital," he wants rates to be "harmonized" across platforms. He concludes, "The government should not be stacking the deck against the newest, most compelling technologies. Saddling Internet radio with high royalty rates while giving terrestrial AM and FM stations a free pass impedes the growth of a promising new way to distribute content. And, it sends a message to would-be-entrepreneurs with ideas about how to revolutionize an industry that the playing field is far from level."

Read Forbes here (and more here).

Last week we covered (here) Business Insider's report that on-demand music Spotify had become major music labels' second-largest source of revenue, behind the iTunes Music Store. Following up, Billboard.biz says (paraphrasing here): "Nuh-uh."

While "Spotify may be the second-largest digital account for major labels," (not paraphrasing), "Walmart can generate more music sales in one country than Spotify can generate around the world." Billboard.biz estimates Walmart had about $525 million in 2011 music revenue. Spotify total revenue was reportedly about $250 million, and probably less than $175 million went back to record companies.

Looking solely at the U.S. market, Spotify (or all on-demand streaming, for that matter) isn't even close to second-place. For instance, SoundExchange paid labels $292 million from the performance royalties it collected from satellite and Internet radio. "Subscription services as a whole returned only $132.7 million in 2011. Subscription services were also less valuable to labels than synchronization royalties ($196.5 million) and mobile platforms ($277.4 million)," the news source wrote.

Read Billboard.biz for more here.