New Royalty Rates Could Kill Internet Radio

FlatCatInASlatVat writes "Kurt Hanson's Radio Internet Newsletter has an analysis of the new royalty rates for Internet Radio announced by the US Copyright Office. The decision is likely to put most internet radio stations out of business by making the cost of broadcasting much higher than revenues. From the article: 'The Copyright Royalty Board is rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange (a digital music fee collection body created by the RIAA)...[The] math suggests that the royalty rate decision — for the performance alone, not even including composers' royalties! — is in the in the ballpark of 100% or more of total revenues.'"

Comments

surprised??? never...

[advocate_one]

they want to kill the little guys off and just have the field to themselves.

Re:surprised??? never...

[Goldberg's Pants]

The problem is that most people aren't going to know about this. What I'd propose is that ALL internet radio stations that will suffer by this stage a day or two of action, synchronized. The busiest hours are probably 9am-5pm EST, so go black for one day, with a message explaining why.

The only reason the RIAA keeps getting away with this shit is because nobody is willing to stand up to them. If the radio stations banded together for one day of action to draw attention to the issue, maybe something will change, but it's gotta be done very soon, as I believe they only have two weeks to appeal.

The only stations I listen to are independent and have no RIAA music, but I really don't want to see the option go away. If it does, what are we left with? Your local Clear Channel owned station, and other "genre of the week" stations that satisfy nobody.

Re:surprised??? never...

[Dred_furst]

theres another solution, switch servers to one that isn't based in an RIAA controlled country.

Re:surprised??? never...

[digitig]

The first problem with the current setup is that it's put under industry administration (whose interests are vastly divergent with both most musicians and the public, witness the current example), when in fact it's a tax and should be under government administration. That way it'd be subject to the same constraints as other taxation forms; is it reasonably equitably collected, do we get our money's worth from the spending (ie, does it finance as many artists and creators as possible for the money we're willing to spend?), is this a reasonable level of expenditure? What's more, we could actually measure the number of new works and how they change depending on the level of spending so we could finally get real data rather than imaginary numbers made up to support organized con men. So we would only have access to music that the government approves of? Bad luck all the acts who are critical of the government, from Pete Seeger through Steve Earle to The Dixie Chicks, and bad luck any genres that are percieved as "evil", from blues and rock 'n' roll ("the Devil's music") to Gangsta Rap ("promotes violence"). Do you really want your senator choosing what you can listen to? Then you must have more trust in your government in the USA than I have in mine here in the UK. Having these choices in the hands of industry may be bad, but passing it to government looks to me to be even worse.

Re:surprised??? never...

[PopeRatzo]

theres another solution, switch servers to one that isn't based in an RIAA controlled country.

Dred,
you have hit on the ultimate solution to all idiotic intellectual property laws. In some years, it will have been a good thing that the Internet caused the end of IP as we know it. Stories like this one, showing how little the "gatekeepers" of recorded music really understand about how people use their product, are starting to pop up at such an alarming rate that the crash must be near.

Re:surprised??? never...

[KKlaus]

No offense, but this is a terrible idea. Who has the authority to decide what is "valuable"? Britney spears was very popular. Does that make her more valuable? Andy Mckee is a fabulous musician, but relatively obscure. Is he then less valuable, or more because what he does is more difficult and complex?

Whatever you think is the answer is irrelevant, because the point is that a huge number of people will disagree with you. Whatever answer is legislated, a lot of people are going to be upset when, in their opinion, they're spending money incentivising the wrong thing. And what if I don't listen to music? Am I exempt, or is funding the pleasures of others a reasonable thing to be required of me?

I don't know why having some sort of committee deciding what artists should be paid seems appealing, and that is what it would ultimately come down to. The free market _can_ work here, it just doesn't because we have stupid copyright laws, and a cartel that no one seems willing to take on. That doesn't make a nonsensical socialist program the answer.

Fine by me

[JackMeyhoff]

Why? It is like all issues of abuse, Patents abuse, music / video media abuse, software patents etc Let them do it, then what happens? Nobody uses their product. Then what? They start to backtrack. Let the system just eat and destroy itself from withing then come the meltdown a new dawn of change comes. Let them get their way and see how long it lasts, all it takes is people to stand up and say enough. Do you really need the shit they produce? No you dont NEED it.

Shouldn't the title be....

[Anonymous Coward]

"New Royalty Rates Could Kill (Legal) Internet Radio"?

When will they learn....?

[Anonymous Coward]

There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped or turned back, for their private benefit.
-Robert Heinlein "Lifeline"

OK...That's solved by not playing RIAA music.

[the_REAL_sam]

Right?

Streaming audio isn't a crime.

What's really wrong with this

[dbcad7]

Unlike conventional radio stations, more listeners costs the station more money. Imagine what would happen if local radio and TV stations were charged extra based upon the numbers of viewers and listners.. I doubt that would fly.

My email to the RIAA

[EPDowd]

RIAA, I am very puzzled. I used to find out about new recordings that I might want to buy, by hearing them on the radio. For quite some time now it seems that Radio stations, AM and FM, all seem to play the same tiny group of music, over and over. I never hear the music I buy, and play at home, played on the radio. When people started using the Internet to make small "Internet only" stations there were enough of them so that I once again had a way to find out about new stuff. How would I ever buy it if I did not know that it existed? This morning I read: "Kurt Hanson's Radio Internet Newsletter has an analysis of the new royalty rates for Internet Radio announced by the US Copyright Office. The decision is likely to put most Internet radio stations out of business by making the cost of broadcasting much higher than revenues. From the article: 'The Copyright Royalty Board is rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange (a digital music fee collection body created by the RIAA)...[The] math suggests that the royalty rate decision -- for the performance alone, not even including composers' royalties! -- is in the in the ballpark of 100% or more of total revenues." I am puzzled. It seems to me that you are killing the best, largest, and only way for me, and others, to find out about new music from the artists that you say you are representing. For the life of me I cannot figure out why you are doing this. I can't buy it if I don't know it exists. I like Bluegrass, Swing Band, 1950's oldies, Traditional Country, Traditional Western, Western Swing, some Jazz, and several other types of music. I hear a very small portion of this, once in a great while on the radio. But so rarely that it is not worth sitting through the usual tiny, bland, group of stuff that is normally played. Most of it is just not played anywhere except on the Internet. Please let me know how you think I am going to find out about the music you want me to buy.

Re:Well,

[eclectro]

If it were your music, and you made a living from it, you'd want your share, wouldn't you?

With copyrights lasting 50 years after an author's death (in the US) it makes no difference to those who are in the grave. And for those who are still alive, they have no incentive to create new works, which was the original intent of copyright law.

Re:Why not donate instead?

[Oligonicella]

The answer to that should be self-evident. People are cheapskates. They will sit and whine about the expense of things, but then will refuse to donate money to individuals who actually try to make a living by the cheapskates' suggestions. Just shows the "I want it all free" crowd are hypocrites and don't really want anything more than "free".

You get what you pay for.

By the way "Utopian Socialist", I have an outdoor structure I need built. Come on over and build it and I will give you some writing in exchange.

Re:Well,

[cpt kangarooski]

No, there are incentives aside from making money. For example, look at /. -- all of us here are posting creative works, in the form of our posts and responses in these threads, but none of us are making money from it. The incentive of socializing is enough for us. Other natural incentives include fame, art for art's sake, non-copyright-based economic incentives (e.g. commissions, the fine arts market, being first-to-market, etc.), scholarship, etc.

And in any event, the purpose of copyright law is to serve the public interest, where the public interest is tripartite, and consists of 1) wanting more original works created and published; 2) wanting more derivative works created and published, and; 3) wanting no or minimal (in scope and length) copyright laws.

Which brings us to the life+70 term (which is what it actually is in the US, at least for some works). For the vast, vast majority of creative works, they'll never make money at all. For the tiny minority of works that will ever make money at all, the vast, vast majority of them will make virtually all of the money they'll ever make within a year or two of release in a given medium. For example, let's take movies: When a movie comes out the opening weekend is absolutely critical. It'll make a lot of money that weekend, less the following week, even less the week after that. After a few weeks, it'll be gone from first-run theaters. After a couple of months, it'll be gone from pretty much all theaters. Whatever money it made from the box office during that period is basically all it will ever get in the theatrical medium. Then it comes out on pay-per-view. I have no idea who actually uses ppv, but apparently someone does, and again, when it first comes out, that's when it makes most of the money it will make from ppv. As the weeks drag on, it pulls in less and less. Eventually it drops off of ppv. Then come the sales to movie rental shops and the public, in the form of DVDs. The first week that the DVD is out is when most of the people who have been wanting to buy a copy of the movie will get it; people who have wanted to rent it (rather than use ppv) will get it then too, resulting in most of the rental store orders to have been placed early. But again, as the weeks drag on, sales drop off. A little bit more money can be squeezed from licensing the movie to the cable movie channels, and after that, to regular tv channels. And you can go through the same cycle in the foreign markets. But then, that's basically it. You have gotten 99.44% of all the money you will ever make from this movie. Most of that (box office, ppv, dvd sales) took place in the first three months or so. (Newspapers and some tv shows have the shortest periods, while books probably have the longest, but even for books, it's a couple of years)

So the issue is, if all that the remaining years are worth is the paltry 0.56% remaining money to be wrung out of it, which is true for the vast, vast majority of movies that ever make any money at all, since so very few ever have the lasting popularity to keep making a significant amount of money over the long run, is it important that the copyright lasts so much longer?

If Alice will paint Bob's house when Bob offers to pay her a million dollars, then that certainly has an incentivizing effect, but it is rather costly. If Alice will paint Bob's house when Bob offers to pay a thousand dollars, then that has incentivized her just as much, but in a much more cost-effective manner!

Well, for creative works, we need to provide the least amount of incentive we can in order to get the most works we can -- basically we're looking for how to get the most bang for our buck. If a five year copyright would get nearly as many movies made as a 95 year copyright (the term length most commonly applicable in the US for movies), then surely the five year term is a better bargain. Adding more incentives -- by lengthening the term -- might get a handful of extra films made, but are they worth the cost to the public of having to endure such long copyrights? Probably not. So don't just look at the incentivizing effect, look also at whether or not it is worth it, and just how much of an effect there actually is.