Slashdot Mirror
RIAA Says Webcasting Royalties Are Too Low
Karl writes "The RIAA announced today their intention to appeal the royalty rates for internet radio decided on by the Librarian of Congress. Today was the very last day to file for an appeal." The webcasters put out of business by the royalties include SomaFM, Monkeyradio, KPIG, and many others. At least a few Congressional representatives support revising CARP to give small webcasters a chance to survive.
Of course. The RIAA doesn't want to become obsolete. With everyone gone, they will still keep making money. They make deals with radio stations. They play what they want you to hear, They play what is cheap for them. They own your songs.
Of course, there are ways around everything.
Streamer
Slashdot: Streamer
This will be the future of Internet radio.
http://www.riaa.com/contact.cfm
Here's a contact form to make your views known to the RIAA.
A little planning goes a long way...
I was searching for info about CD prices, as a local newspaper said they were on the verge of dropping significantly. I came across the RIAA explanation why a CD cost so much. In typical Slashdot manner, I haven't actually read any RIAA stuff before.
Read it and weep. That should convince you what double-faced bullshit the RIAA is spurring about. A few extracts:
Then come marketing and promotion costs -- perhaps the most expensive part of the music business today.
So they tell us that a major part of the cost comes from advertising to us, which has no value for us? Great... (Okay, this is a bit beside the point.)
For example, when you hear a song played on the radio -- that didn't just happen! Labels make investments in artists by paying for both the production and the promotion of the album, and promotion is very expensive. New technology such as the Internet offers new ways for artists to reach music fans, but it still requires that some entity, whether it is a traditional label or another kind of company, market and promote that artist so that fans are aware of new releases.
Are they saying they pay the radio stations to play and promote their music? A bit of a contradiction I'd say...
Between 1983 and 1996, the average price of a CD fell by more than 40%. Over this same period of time, consumer prices (measured by the Consumer Price Index, or CPI) rose nearly 60%. If CD prices had risen at the same rate as consumer prices over this period, the average retail price of a CD in 1996 would have been $33.86 instead of $12.75.
The CD was invented in 1980. They're comparing the production price of a three-year-old technology to its price 13 years later? Oh, give me a break...
I doubt, therefore I may be.
Radio royalties are just another way of ripping off artists.
Here's why.
1) Record company signs artist. Loans artist money to record the album. Artist records album and gives it to the label to promote.
3) Label pays "independent promoter" $100,000-$500,000 to have the song placed on the radio. Strangely enough, it works, and the song is added to radio station playlists.
4) Every time the song is played on the radio, the radio station pays a couple of pennies to the label.
5) The label takes their 90% cut from those couple of pennies, and applies the remainder half-cent -- the "artists's share" of the radio royalty -- towards paying off the "independent promotion" payola bill.
-----
Broadcast royalties are a sham -- a smokescreen. The record labels know full well that there's no money to be made on radio royalties. The real money comes in when people start to buy the vastly overpriced albums. For the record labels, radio play is nothing more than advertising for their cash-cow albums, and they have no problem with paying heavily to get that "advertising" on the air, be it payola or "independent promotion." The record companies want to pay radio stations to get their songs on the air, and they do it any way they can, because it's the only way that they will ever start selling albums. This is the reality of how money flows between record labels and radio stations. It sharply contrasts with the official fiction that radio broadcasts are a source of revenue for artists and labels.
If broadcast royalties actually reflected the market, then radio would have reversed royalties -- The record labels would pay the radio stations every time their songs are added to their playlists, or played on the air. Everyone understands that radio stations are in the business of putting commercials in people's ears, and we understand when they are paid for doing that. The disconnect comes when people deliberately try not to understand that radio stations are also in the business of putting music in people's ears, and the record labels line up with cash in hand to get their advertising on the air.
Somehow payment for exposure is OK when the product is soap, but not OK when the product is Backstreet Boys albums. Why? Both are advertising!
The answer seems to reside in this elaborate fiction of the airwaves as a "public trust." People want to think that the radio stations are providing a valuable service -- by playing music on the air -- and the statutory royalties reenforce that fiction. In reality, radio stations spend 95% of their time playing two different types of commercials -- commercials for advertisers, and commercials for record albums. Except that the record industry has the law rigged to conceal the fact that radio station music is also advertising as well, by requiring tiny, tiny royalties to be paid to artists, and concealing the real huge cash payments that are the real driving economic force between record labels and radio stations.
-----
Back to the royalties. Who the hell can afford to pay those royalties? What's the real agenda here?
There is one group of companies that can afford to pay the statutory royalties, no matter how expensive they are per user. Those companies are the RIAA companies themselves, because they will essentially be paying themselves. I suspect that the real reason that the RIAA is pushing for sky-high royalty rates is to ensure that no one except for the RIAA corporations themselves can possibly afford the rates.
Then they will be free to "take over" internet radio, have used the royalty rates to drive the rest of the competition off of the net.
Or so goes the theory.
no-fee internet broadcasting licenses are the catch.
It will be interesting to see if "no-fee" internet broadcasting contracts become a trend. I think that royalty-free internet radio could become enormous for a couple of simple reasons:
1) It is something that a hobbyist can do
2) Therefore, if it can be made easy and legally safe to do, thousands of people will do it
3) Those royalty-free stations will only be playing songs from non-RIAA labels. Thus, the entire medium will be indy-saturated, the playing of major label songs on internet radio being, essentially, forbidden by law.
Eventually, those indy labels are going to start making money, because people are going to start hearing the music, and eventually buying the albums. The turning point will come when an independent album starts to rise up the charts -- even though it has ZERO broadcast radio play -- soley on the strength of internet radio exposure.
At that point, you'll see record companies start to quietly offer successful internet radio stations money to place their songs on their stations, except that this time there will be no "public trust" fiction to interfere with the natural market forces.
At the point when it actually becomes possible to make money on internet radio, watch for an explosion of new internet radio stations.