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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.
The RIAA are quickly making their way to the top of the hate list for any free thinking individual. Does anyone know whether their appeal opens up the possibility for other groups to argue that the rates are too high??
I have such difficulty imagining what the high-ups at RIAA are thinking. Crushing diversity and turning broadcasters against them isn't going to help even them one single bit.
The only option right now is for brave broadcasters to practise civil disobedience and find ways to continue broadcasting. Support your favourite internet radio station!
A little planning goes a long way...
Those SOB's at the RIAA still haven't gotten it... if they just keep quiet, then actions like the following will not be neccesary...
/.ing of the RIAA website or alternatly click here
Click Here to help the
There is no mod option "-1: Disagree" for a reason. "Overrated" is not an acceptable substitute. Post something instead.
The obvious solution, IMHO, is that there should be fees... that are based on percent profit. Why should the RIAA profit from someone who isn't profitting in the first place? This would essentially be free advertising, that the RIAA would not have to pay for.
Besides, who pays for radio anyway? So unless someone actually does pay, and the internet radio guys have ads... they get zero profit, and so the RIAA gets zero profit.
But still gets free advertising for whatever is being played. So what exactly was the problem?
And if they think that people will record songs from them and what not... well, its more difficult than it sounds. Recording a live stream is very annoying... similar to recording a radio stream. First, you have no idea when a specific song will play. And even if you continually recorded the stream to get to the song... or for more than once song, you still gotta edit it down to the individual songs. This is more trouble than its worth, when Kazaa or the like would do just fine.
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...
The RIAA has nearly ended webcasting, which was a form of promotion that cost them nothing, and now want a royalty scheme that would end it entirely. Enough! Boycott the recording industy. Don't buy CDs.
The Uncoveror: It's the real news.
If you're helping to support a small independent music store, which might otherwise not be able to afford to stay in business, all the better.
If you had a job that you loved to death, but it meant that there was only one boss in the world that would hire you, would you stand up to him?
Would you speak out against him in public? Very likely you would not. Because this boss can get you shut out of your job for good. Sure you can go on doing what you love, but you won't reach nearly as many listeners. Add to that the fact that your boss is now actively pursuing shutting down every distribution method that you would use to do your job without him.
This is why very few artists have spoken out against the RIAA. "Want to continue recording music for the public? Shut the hell up and live with us, because congress sure won't stick up for you." is what the RIAA is basically saying to every artist out there. Except that they don't need to say it, it is in every artist's mind already.
I dunno where slashdotters get ideas like this.
The law is not code to find bugs in. The law is not stupid. The law has judges that are (mostly) hired and trained to use their judgement to stop stupid things like this. Your idea demonstrates such an unfathomable naivety about the way Western law works that I think you just might be a troll.
Most of the time when you see people skirting the law, they're using explicitely defined loopholes and tugging them bigger. Sometimes even those people get slammed by judges for pushing things too far. That's the whole point of having judges, is because we aren't good enough to write law (code) that thinks of every case.
Sheesh.
-Rob
-Rob Ewaschuk
"Only the continuous and steady application of the methods for suppressing a doctrine, etc., makes it possible for a plan to succeed."
-- Adolf Hitler
Beware: In C++, your friends can see your privates!
Seriously, most people don't even know what internet radio is. If the RIAA says that internet radio is piracy most of the public will just nod their heads and say "Go get 'em!".
Chris Kuivenhoven is a thief, beware
I'll preface this biased statement by saying that I own a record store :o)
Economics 101 of the record store music biz:
1. There are new 'developing artist' price points. A lot of pretty big name artists first came out at this pricepoint (Limp Bizkit's first album did, Godsmack's first, Avril Lavigne)... We (record stores) end up selling them for about 5.99 - 6.99 and they cost us about 5.75 to 6.50.
2. The superstar pricepoints cost us big bucks. The new springsteen album, for instance, costs just a tiny bit shy of 12 bucks. So we all sold it for 9.99 on the first day and, I'm not kidding, we lost about 2 bucks per CD sold.
3. Every store pays about the same for CDs from the manufacturers.
4. Stores make more of the their money now off of cooperative advertising. The cheesy mall stores that you see charge the record companies big bucks to have their posters up or their albums on sale.
5. Record stores have been fighting the labels for lower prices for years. However with the consolidations in the music biz, the labels have their bosses (i.e. the shareholders) pushing for higher and higher returns, so the labels can't afford to reduce the price of albums lest they be sacked.
6. Catalog sales of music are up a little or at least steady. However hit sales are way, way down. The industry believes it to be because of burning.
7. The industry loses tons of money on most artists, but makes it up and then some on the big artists. However since the sales of big artists have been down, the economic detriment to the labels is obvious.
8. Almost all record stores would not make a profit without lifestyle merchandise (i.e. piercings, belts, lava lamps, etc.) and used CDs.
9. A typical record stores' profit margin on new CDs is LESS THAN 15%. No, I'm not kidding. And yes, I very much know what I'm talking about. That's less margin than gas stations and grocery stores.
10. The typical profit margin on used CDs and lifestyle merchandise is over 50%. You can see why we move to selling more and more of that stuff.
11. Consumer attitude towards pricing is that CDs are way, way to pricey and that record stores/labels could afford to sell them way cheaper. Obviously our industry has totally failed here to create value for our customers. You hear nowhere near the bellyaching about software where you buy a Microsoft Office CD that costs them 82 cents to make and they sell for $300! Or about videogames that sell for fifty bucks. It's because consumers feel they've been getting additional value from software and games, but not from music. Is the pop star of today really any better than the pop star of years gone by? Albums now are longer and better produced, but is the music really any better? A lot of our customers don't feel so, so the price of CDs to them still seems to be too high.
What would I do as a reasonable music consumer (as opposed to someone who just thinks music should be free and artists will still record if we steal their works)?
For new CDs, I'd buy those developing artist CDs and only those. That way the record companies will learn that if you charge 6 bucks for something tons of people will buy, but if you charge 15 bucks, very few will buy. If I wanted a big artist that is expensive, I'd wait for it used - The great thing about capitalism is that the almighty consumer will have his/her say and that if you show your elasticity of demand (i.e. you will pay one lower price but not a higher) pricing will change.
There's not much point in paying to setup an internet radio station which broadcasts exactly the same as the broadcast stations: there's a lot of work involved (and I think a lot of people listening to mass-market media aren't really inclined to do that kind of thing).
So you tend to find a much wider variety of music on 'net radio, which gives people choice of music from different countries, and genres not traditionally represented by RIAA members. Not really conducive to having member's music heard all the time.
I think another part of it is that it's quite a bit harder to push music to a large number of online stations, all run by different people, than it is to promote to the normal broadcast stations, which are often represented by a few parent companies, and I'd guess probably common playlists.
Compare with some of the reasons people came up with as to why they thought the RIAA went so hard after AudioGalaxy. (AG really went out of their way to filter mp3s of artists who didn't want their wusic shared, not just RIAA members but everyone, so I don't think the copyright-violation claims by the RIAA entirely ring true there).
...if you're a webcaster, if you don't play a single bit of music, under the new "agreement", you still owe the RIAA $500. If you play nothing but independent labels not affiliated with the RIAA or foreign labels (also not covered)? Still owe them $500.
They get more money from webcasters who play their property, but they also get money from webcasters who don't. How does that make sense?
Easy does it!
This comment has been submitted already, 276865 hours , 59 minutes ago. No need to try again.
I work for a small radio station here in the US. We had a few listeners in Germany that liked us. They'd e-mail us all the time and request stuff, it was pretty cool.
Then the mighty hand of the RIAA took away our webcasting. We couldn't afford their rediculous fees and the audio server is now someone's workstation.
Here's what I don't get. By playing the music we play, we encourage those listeners to go out and buy CDs. Apparently the RIAA doesn't understand that. Somehow, allowing people to hear a SAMPLE of music the RIAA produces, encouraging people to buy a full album, is considered piracy to them. Do they realize how much of their sales are based off of listeners who heard it on the radio first? Eventually the RIAA will probably sue radio stations out of existence for this "piracy" that they've only tolerated thus far.
I particularly liked This post yesterday. Substitute in your favorite *AA. I think this is the future of RIAA owned music as well.
There is no reasonable defense against an idiot with an agenda
:wq
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.
6. Catalog sales of music are up a little or at least steady. However hit sales are way, way down. The industry believes it to be because of burning.
I believe it to be because anyone who actually likes the "hits" merely has to wait 30 minutes before it comes back up in any top 40 radio station's rotation.
S
11. Consumer attitude towards pricing is that CDs are way, way to pricey and that record stores/labels could afford to sell them way cheaper. Obviously our industry has totally failed here to create value for our customers. You hear nowhere near the bellyaching about software where you buy a Microsoft Office CD that costs them 82 cents to make and they sell for $300! Or about videogames that sell for fifty bucks.
I'd have to say that last part is not quite true. Office and Windows are probably among the most highly pirated pieces of software in the industry, and price point has a lot to do with that. A great deal of the popularity of the open source movement in business has more to do with cost than with the availability of the source code. Similarly, most gamers feel that the prices of PC games are too high (this may or may not be true of console games as well, I find that many gamers feel that console games are a better value in some cases because bugs are less prevalent with the limited platform than with PC games). The PC games industry has an added problem in that the early adopters (who pay the most for those games) also are the most likely to suffer from the bugs in that game and have to spend the most time working through those bugs. Software like Office, on the other hand, is something few people buy more than once every few years (Office 97 is still the most common version, though Office 2000 is growing), and usually purchase with a computer (at a lower price point, when they're already spending quite a bit of money).
As an additional point, the consumers of music CDs tend to represent a much broader range of incomes, whereas the majority of Office licenses go to corporations, and the gamers that buy the most PC games are the same people that are spending $400 on a video card that will be replaced in the product line in 6 months (meaning that they'll buy another video card in 6-12 months at nearly the same price point).
What my personal exposure to the PC gamers has shown (through doing tech support and running an online gaming league) is that gamers are starting to pay more attention to the price/performance ratio of their hardware, and are more willing to spend the $50+ for a new game from a reliable developer that has a good history (or perceived good history) of releasing games that are fairly well finished and will provide a great deal of entertainment for their money (ie replay value, online experience, and the depth of the single play-through). Gamers are streaming towards AMD CPUs for their price/performance, and nVidia's GeForce MX line, even though they know they can get something better if they pay more money, they get the best value, knowing fully well that the system requirements of games are well below what they're buying anyway.
It's because consumers feel they've been getting additional value from software and games, but not from music. Is the pop star of today really any better than the pop star of years gone by? Albums now are longer and better produced, but is the music really any better? A lot of our customers don't feel so, so the price of CDs to them still seems to be too high.
Actually, although many people do feel that the value of newer albums isn't as much as older albums were previously, I think the biggest factor is that the music industry said that CD prices would drop, and they have instead risen. When I first started buying CDs they were about $5 more than the cassettes I was buying before that, even though they were already cheaper to produce than cassettes. Since my budget for music didn't grow, I was buying about 2/3rds as much music as I had been buying before, simply because I was spending $15 per CD rather than $10 per cassette. Now that my budget for that has grown, the CD prices have risen as well, and a new CD can run anywhere from $17 to $20 for even non-top-40 bands, unless I take the time to go looking for them at smaller stores with smaller selections to get them for the $14 or $15 I was paying 10 years ago. So, the record industry raised prices, lowered manufacturing costs (CDs cost about 1/2-1/3 the cost of a cassette to produce), lowered the royalties for many of their artists for CDs (experimental format charge), and lied to the consumers, saying the prices would drop when the CD became the prevalent format, and then never dropping the prices. Records cost more today, too, but that's understandable because of a much more limited supply and demand, so they're produced in much smaller numbers (a new record tends to run about $20-30, depending on the length of the album (how many records it takes up), the number pressed, and anything else unusual about it, such as unusual colours for the records themselves).
It's certainly not unusual for me to drop $100-200 every time I walk into a record store, but when I'm walking away with fewer albums each time, or have to spend more time in the store looking for something to spend that money on, I'm less likely to do it as often. I've also spent a great deal more money buying music online in the last 4 years than buying it in stores, because stores simply can't afford to stock a lot of the stuff I like to listen to (or, if it's Wal-Mart, Sam Goody, and the like, they will refuse to stock or sell many of the albums I buy, or only sell censored versions of those albums). After all, how many record stores want to stock a CD that they might only sell 1 copy of each year it's on their shelves? It's especially helpful that many of the record labels (or sub-labels in some cases) that carry a few of the bands I listen to sell direct from their website at prices that are near or lower than what you've quoted the major labels are selling albums to record stores for, and are very up-front about whether or not the version you're buying is censored (something that's sometimes not as obvious in a store).
-PainKilleR-[CE]
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.
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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.
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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.