The evolving shift in the employer/talent business model

| December 2, 2011

By Matthew B. Harrison
Senior Partner
Harrison Strategies 

SPRINGFIELD, Mass. –– We are in the early stages of a significant shift in the way radio station owners/operators will be managing and paying for content creation.  It is becoming increasingly important for radio talent to take stock of their current business relationship with their employers and consider these changes when mapping out future plans.

The shift coming to radio will be similar to what happened in the motion picture industry when the “studio system” in which actors were employed staff members of film factories such as MGM evolved into a model in which they became independent players contracted by production companies on a per-project basis.

The root of this change grows out of the separation of the “radio station” into two very different businesses which, for many decades, were considered one and the same –– radio station as a licensed property and radio station as a production company. The growth of the role played by the internet in the distribution of terrestrial radio station programming is exposing and speeding up the distinction between these two concepts.

Under the fading system, being a radio talent almost always equates to being an employee of a radio station.  In exchange for providing their on-air verbal service, a talent receives a salary, benefits and occasionally additional compensation based upon marketing opportunities.

Things began changing in the era of syndication.  Some hosts worked for “outside” production companies instead of for the stations directly.  Others took the gamble and became whole or partial owners of their own distribution vehicles.

In this next phase of evolution, with the less expensive cost of entry (such as broadcasting on the internet), talent themselves are increasingly becoming their own production companies.  Thus begins a necessary shift in one’s thinking from talent being an employee to thinking of talent as an independent contractor.

In a traditional employment agreement the employer retains the intellectual property rights.  It’s why one is being paid a “salary” –– the employer has the right to financially exploit the intellectual property manufactured by the employee.  In an independent contractor relationship, intellectual property ownership needs to be specifically designated otherwise so it remains with the talent.  A paragraph can make the difference when determining who controls distribution and revenue on the web.  I realize it’s not a primary concern for most now as the amount of money being made from internet distribution is less than the amount of money being made by salary and or profit sharing opportunities.  However, this will change; probably sooner than we could imagine.

Employment relationships will still exist but they may not be with traditional media distribution companies.  The need for quality programming increases as our society desires constant connectivity to media.  It goes beyond advances in technology such as creating content for the multi-thousand channel radio currently available as an in-dash accessory.  It also includes venues adding media programming that previously didn’t have any.  The Los Angeles Times reported on October 17 that McDonalds will be starting its own in-store network including programming such as local school sports, movie previews and human interest stories in high definition. The potential of non-traditional radio platforms serving as venues for talk media content is limitless!

In this evolving media landscape talent needs to think beyond the traditional paradigm of being an employee to a radio station because it might not be that long from now that a radio station will be one of the last places one would look to get a radio job.

Matthew B. Harrison, an entertainment and media attorney, is a senior partner with Harrison Strategies, LLC based in Springfield, Massachusetts. He can be phoned at 413-565-5413 or e-mailed at matthew@matthewharrison.com

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Category: Legal