Congress Passes SWSA

signer writes "Congress has passed the Small Webcaster Settlement Act (House of Representatives link). Webcasters have until December 15th to negotiate Percentage-of-Revenue royalty payments, and they have the option of changing their status to non-profit and gaining a delay until June 30, 2003 to pay owed royalties from previous years. RAIN (www.kurthanson.com) has details."

Comments

The Real Question is?

[1stflight]

IS this settlement good or bad for the webcasters? Personally I'm of the mind that radio by defination is free promotion, the webcasters should be charging for it.

Re:The Real Question is?

[pla]

No, not all that great.

For one thing, the RIAA's slice of the pie still comes from *gross* revenue, meaning that stations operating with only a tiny profit margin will get very very screwed.

Another poster already mentioned the $500 minimum, but that I see as less of a problem, only affecting the smallest of webcasters. The percentage of the gross take, on the other hand, doesn't go away regardless of scale.

I have to admit I don't quite get the part about non-profit webcasting (the text of the bill HEAVILY references its predecessor, making it read almost exactly like a diff file). It sounds like they just have more time to decide to fold, but don't actually get significantly better terms. But don't quote me on that one.

Re:The Real Question is?

[mumblestheclown]

"free promotion."

That's up for negotiations to decide, isn't it? One side POTENTIALLY benefits from "free promotion", the other from having some filler between advertisements (or some other benefit).

Making things interesting is that in the marketplace of music, webcasters can always go to alternative music sources if they can't come to what they think is an equitable agreement with their first choice rightsholders--be that agreement the rightsholders get paid, pay, or whatever.

in life, you get what you negotiate.

Re:The Real Question is?

[Anonymous Custard]

>>Personally I'm of the mind that radio by defination is free promotion, the webcasters should be charging for it.

>That's a great idea! I'm going to take one of the new BMW 7-series cars without the dealers permission, drive it around town everyday promoting it and then send BMW a bill for the favor I'm doing them by promoting their cars.

Some unknown person driving one car around is completely different than broadcasting a song to hundreds, or thousands of people who likely have the means to buy the album. Also, you've taken and consumed physical capital (the wear and tear on the car) whereas the radio station do not expend any of the music company's physical capital.

Go ahead, try to make a convincing argument of a recent musician who was mainstream super-successful WITHOUT the help of radio or internet broadcasts (besides Phish or Grateful Dead, who aren't mainstream anyway). Music companies know the power of promoting songs on the radio, and would gladly pay off DJ's to give their songs more airtime, but it's illegal to do so in such a direct manner. Top level 'you-scratch-my-back-I'll-scratch-yours' deals drive radio play these days.

Re:The Real Question is?

[FreeUser]

That's up for negotiations to decide, isn't it? One side POTENTIALLY benefits from "free promotion", the other from having some filler between advertisements (or some other benefit).

Well, that is the theory. But that assumes both sides come to the table more or less as equals.

In reality, the media cartels have a vertical monopoly on content from the artist's gitarre strings to the listener's earphone, whether that path passes through the radio or television spectrum as a traditional broadcast, or through the retail chain as a shiny 6" disc.

The relationship is more complex than this (the cartels are currently crying foul over radio payola ... not because of the payola, which gives them almost complete control over what we hear on the radio, but because of the prices they are currently having to pay. They are asking the government to step in and slap the otherside down, so they can maintain their control, but at bargain basement prices instead), but overall they enjoy a vertical monopoly they are loathe to give up.

mp3.com represented a threat to this, before the cartels coopted them into the regime. Web broadcasters represent a threat to this, as do p2p filesharing networks. Their concern isn't that their content is being played (indeed, they pay for exactly that privelege on traditional radio), their concern is that their content isn't the only thing being played and, worse, they have no way to control that.

Except, of course, to tell a webcaster to "play our play list or pay (exhorbitant) retail to broadcast our music", using their current market dominance to relegate those who say no to a tertiary status, and likely costing them the early listenership they need to stay in business.

Its not that they don't want webcasting, or that they expect to make a lot of money licensing webcasters. Its that they only want THEIR webcasters online, and no one with such a cartel/monopoly mindset will ever negotiate with a party such as the webcasters in good faith.

So, until copyright is reformed to no longer grant government entitlement monopolies, there will be no free market in which such negotiations can take place, indeed, no free market whatsoever, so one cannot reasonably expect acceptable results to arise from applying free market assumptions to what is essentially a planned and very precissely regulated market.

There's nothing wrong with this bill

[SexyKellyOsbourne]

Honestly, how would you feel if something you put hours, days, and even weeks of effort, heart, and soul was being played FOR-PROFIT by a pay radio station by someone without your permission?

Whether non-profit p2p and netradio is stealing or not can be debated -- but when someone takes an artist's hard work and plays it over the internet with the sole purpose of making money, it is blatant thievery of intellectual property and disrespect of copyright, which does have a right to exist to spur innovation in an economy that is, was, and shall be capitalist.

Re:There's nothing wrong with this bill

[JessLeah]

Because the simple fact of the matter is that most online music stations are NOT for-profit at all.

Most of them, from what I've seen at least, are run by either (A) non-profit radio stations or (B) individual music lovers using Shoutcast or Ogg or what-eva.

And if the RIAA promotes their common "it promotes piracy" party line in this case-- oh, really? How many people are going to pirate a cruddy 56/96/128Kbps stream?

Re:There's nothing wrong with this bill

[skajake]

How would i feel? Pretty darn good if i was the artist. Probably pretty good if i was the record label too. I mean, hey where else can you get free promotion? You think the artist will get a red cent of those webcast royalties?

Re:There's nothing wrong with this bill

[Anonymous Coward]

Even if we agree that the FOR-PROFIT argument holds water, what about the NON-PROFIT organizations? The bill doesn't say they're exempt. On the contrary, it says that in six months they have to pay for everything, retroactively. If you were an artist, would you appreciate your record company squashing the lifeblood out of your non-profit, loving, internet fans, who only want to share the love? As an artist, you aren't going to see a single cent of royalties paid under this bill anyway, so if you do have an objection, it would have to be out of small-minded rabid capitalism, and not out of concern over matters of effort, heart, and soul.

Good news for the "true" non-profits

[dw5000]

like college radio and the NPR music stations (e.g. WXPN).

Problem, though, is that it could hurt the small, independent, for-profit stations. I can see Sh*tchannel using the royalty issue as a way to round up the last of the independents into their corporate droneness.

Guess this means I can start looking into streaming my music on the Web again. Now, if they could only relax the FCC rules on what you can play and when. (Not talking about obscenity but about the stifling rules on playing an artist more than once in a time period. I mean, if payola is legal now [with Sh*tchannel demanding $$$ from the record companies], then maybe we should toss out the rest of those 50s-era radio rules too.)

Non profit status =

[Crusty Oldman]

Non profit status = special license = jurisdiction = control

I tried reading the bill

[teamhasnoi]

Way the hell too many 'subparagraph B(iii) except after 'Section C'. Apparently to make sense out of it you need to be all coked up like our President.

You'd thing after paying taxes to support a Congress to make 'laws' like this, they could spend a little to make it readable by the general public, which will have to hire laywers and subsequently be priced out of webcasting right there.

If this benefits the little guy, I'm all for it. Unfortunately, I can't tell. 'Course it's Friday and I haven't had my Dr. Pepper yet either.

There seem to be TWO possible outcomes.

[JessLeah]

1) Web radio dies, or goes "underground" and just becomes a lot less popular, and a lot more scary to be involved in. (due to the new-found illegality thanks to this bill)

2) Web radio stations start playing works by independent (non-RIAA-affiliated) artists en masse-- thereby avoiding having to pay the RIAA a red cent.

Actually, there's a third that is somewhere in between: 3) Web radio stations start playing only "mixed" versions of RIAA tunes, claiming that by producing a "modified, derivative work" it is legal. Then this gets hashed out in court, or worse in Congress...

As I see it, though, (1) is by far the most likely. Lots of the SlashDot types might be interested in indie music... but remember, lots of the listeners of these online stations are/were regular Joe-Blows. They want to hear Queen and Sting and Madonna and Eminem and Snoop Dawg, not (insert obscure indie band name here).

Le sigh... But if outcome #2 was the case... that would be very nice.. and might even spark a nationwide change in buying habits (i.e. people would start buying more indie music, leaving the RIAA bit by little bit... of course, this would only affect the mostly young and relatively Internet-literate (not necessarily computer-literate, but they're familiar with the Net and much of its underlying tech) folks who use Web streaming...)

Sade

[dolo666]

I'm not normally a Sade fan, and I remember holding some disdain for her music in years past (80's). But after hearing some of her recent stuff (downloaded via Gnucleus), I bought her album and went to her concert with my wife.

Exposure sells and it's the RIAA who are scared because maybe we don't want to buy the crap they are carpet bagging... maybe we will hold out for something better. They don't trust themselves.

One hit wonders shouldn't sell any records because the rest of their albums suck. While good musicians and artists who sweat blood to make amazing albums are still left behind. If the internet could do anything, I think it would even things out so real musicians would make the money they deserve and fluff bands get downloaded for the song that's good and passed over for concerts and cds.

Good music will always sell.

Re:Sade

[dolo666]

Why? Retribution. ... and that is exactly why they say you sell your soul to the Devil when you sign a record contract!

It's a tough business, and an unethical one. I think anyone with an ounce of courage or a dash of gumption would avoid record contracts like they were the plague. Even after you tour your guts out and dance until you can't dance anymore, and sign autographs until you're blue: you give up your life, your privacy, your whole time and any possible control you could have over your destiny as a human being, let alone an artist. This process strips the artist of any soul they might have and leaves them breathless and broke, wondering what happened.

Congress Passes SWSA

[drdanny_orig]

they have the option of changing their status to non-profit and gaining a delay

The presumably also have the option of going out of business and paying nothing, which is exactly what the RIAA wants to happen. That's the only possible explanation for the exorbitant rates being demanded. I've said it before, I'll say it again: fuck 'em, and fuck 'em again; then keep on fuckin' 'em. Boycott big-money music!

Re:Annual minimum royalty

[BrookHarty]

There is an annual minimum royalty of $500, which means that the smallest of small webcasters may not be able to afford it.

Put up paypal, 50 bux a month and your covered. Of course better switch to peercast so your bandwidth doesnt run up your expenses (which they can charge 7% if expenses are larger)

BTW, people over at Nectarine have been able to get enough donations to pay for bandwidth. They are even testing OGG streaming (less bandwidth than mp3s)

unhappy

[nege]

That silence you just heard was the sound of 20,000 smalltime webcasters going offline.

RIAA Sues Radio Stations For Giving Away FreeMusic

[Omega]

Too bad The Onion took down this article, I think it explains the hypocrisy pretty well. At least Google still has the cache: RIAA Sues Radio Stations For Giving Away Free Music