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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.'"
they want to kill the little guys off and just have the field to themselves.
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
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.
http://www.rense.com/general79/wdx1.htm
"New Royalty Rates Could Kill (Legal) Internet Radio"?
then Internet killed the video star. Then Greed killed the Internet radio star and pissed on all of their graves.
The grass is always greener on the other side of the light cone.
Pandora knows what I am listening to every second of the day that I am listening to music. They have , literally, a perfect listener profile of me, created by myself!
If they cannot find a way to monitize the living daylights out of that, then they need to hire some better mathematicians...
Need help treating your acne? Come here!
Huh. Big opportunity here for independent artists looking to get heard. Wonder if this'll backfire like...well, just about every other money-grabbing scheme from the RIAA and co.
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"
The RIAA has a responsibility to bring more money for the music artists. Unfortunately they misread "going above and beyond to help the people you represent" as "going above and beyond anything... hey Bob who is it we say we're representing again? Yes, we are only here to help 'music artists'."
:woot:"
"Hey Bob, you hear my youngest started playing the recorder in Kindergarten today? I filled out another WTF1337 form today and we should start seeing the revenues next month.
Turning coffee into code.
Right?
Streaming audio isn't a crime.
"Forgive us our trespasses, as we forgive those who trespass against us." -Jesus Christ The Lord's Prayer
Why dont more and more people use the Donate method of payment just like open source projects?
Because very few people actually donate money to open source projects?
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.
waiting for ad.doubleclick.net
Note that at this rate of repeated extensions (>1 year/yr), there will never be any new out-of-copyright music except for works released to the public domain by their creators' consent.
Revive the Constitution.
When faced with the RIAA monopoly, many people propose a boycott that is unrealistic: People won't stop buying CDs, downloading from iTunes, or the like.
What needs to happen is for Internet radio stations to turn to independent labels. Consumers will buy the music they hear. If Internet radio stations commit to changing the majority of their playlist to artists on non-RIAA labels then the majority of profits will be diverted from the RIAA - they don't get per play royalties and they don't get royalties on purchases. It's a double-whammy. If you look at something like eMusic today, which doesn't carry the RIAA labels, you will quickly find that a little digging turns up more great music than you might actually expect. And it's not just Internet stations that should make the change - everyone can benefit from getting out of this monopoly stranglehold. The RIAA might eventually have to propose competitive terms to survive, artists will be better compensated, and labels which are smaller today will be able to grow faster not only because they will see a greater percentage of royalties, but because the best artists will be less drawn to the RIAA labels in the first place.
Perhaps, though, the RIAA is already starting to feel some bite, and this is why their proposed fees are so high. If you're paying 100% of your revenues to the RIAA, you aren't paying anything to the indie's.
So, in some cases they'll pay a station to play their music, other times they want to be paid to for the priviledge/right(if given) of playing their music. If you go by the logic of payola : exposure=more popularity tranlates to more sales. However, in this case, they want their exposure diminished for what exactly?
'US Copyright Office' -> Move your servers to a place that is outside of US jurisdictional where the copyright laws are not controlled by large media companies. Last time I checked US law does not effect the rest of the world.
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.
73 49 111 01001001
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.
Take the cheese to sickbay, the doctor should see it as soon as possible - B'Elanna Torres, "Learning Curve"
and apply these fees to terrestrial radio also. This would then effectively kill ALL radio. A radio station that claims 10,000 listeners at any given time would owe 1.5 million per year. And retroactively collected should put about 80% of stations out of business. Terrestrial radio would be in big trouble because they have to claim more listeners to get the advertising dollar, but being popular would work against them. So, people, let's be fair and give them what they want and tell them to be careful what you wish for, wishes sometimes do come true!!
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.
If you look at something like eMusic today, which doesn't carry the RIAA labels...
Dude, you're clueless. emusic is laden with RIAA labels. Being an "indie" does NOT mean "not RIAA affiliated." I even signed up for their "25 free" promo to check out just how many RIAA labels there are on emusic - there's thousands listed on emusic, and you can bet thousands of those are RIAA affiliates. They carry cocteau twins and breeders (for example) who are on 4ad. And who owns 4ad? Beggars Banquet - and BB is an RIAA affiliate.
Emusic likes to play up the "indie" part - but dont think for a minute that doesn't mean any purchases made there aren't going to help fund the RIAA, cuz it does.
If Internet radio stations commit to changing the majority of their playlist to artists on non-RIAA labels then the majority of profits will be diverted from the RIAA
It's a great idea. And guess what? There are already plenty of places that do this - I can go to Magnatune, for example, and listen all day for nothing. All the stuff they play is their own label.
Doesn't mean squat, because "most folks" want to hear the shit they've heard ten thousand times and aren't interested in expanding their horizons. There's nothing stopping anyone today from starting up a non-label stream and this law can't stop those unaffiliated artists from allowing such broadcasters to play their works. Doesn't matter, because "internet radio" means "radio" and most people don't hear Jackalopes and Wicked Boy on the radio, they hear Micheal Jackson and P Diddy - and that's what they want to listen to online.
This might well force internet radio to take up more and more independent artists
that would otherwise get turned down by the dispensing recording industry,
never see the light of day - and be a great way for indies to get on the air
to a large audience without having to compete with the established artists for
time.
As soon as they see their "mind-share" eroded by people outside their
http://en.wikipedia.org/wiki/Payola payola system the recoding industry will turn around
and offer payola or even demand to be put on and lobby for laws to get "equal time".
The nice thing about this, is that could help kill off the RIAA. What needs to happen now, is that the established streamers need to set up alternative streams where they use NON-RIAA controlled music. To encourage it, their RIAA controlled stream could slowly lengthen the time between songs AND advertise the other stream in the RIAA controlled stream. Finally, to encourage the music development outside of RIAA, they need to start paying money to the artists. If they could get together as a group and agree on a rate (ideally close to the old RIAA rate), then as a group pay them. Perhaps magnatune will consider taking it on. Once the musicians realize that they can make a great deal more money by not signing with labels (RIAA), new ones will have nothing to do with them. In addition, we will probably see new labels who have nothing to do with RIAA. The final nail in this, that the group needs to go to the same place where radio stations pay out at (it is not direct to RIAA) and get paid their lower rate. It will encourage regular radio to look at the riaa musicians music.
I prefer the "u" in honour as it seems to be missing these days.
Disclaimer: The company I work for is owned by Clear Channel. These comments are my own views and do not reflect the views of my employers.
Have you considered who will be paying the most? This year, every Clear Channel station in the top 100 markets will be simulcast streaming. That's on the order of 1,300 stations, +/- 100 or so. Since I've already done the math, I'll clue you in.
Using an average of one song per four minutes, each station will be playing 131,400 songs per year. That's $144.54 per station per listener. TFA quotes 500 listeners as average; that works out to:
100 listeners: $14,454 --- 500 listeners: $72,270 --- 1,000 listeners: $144,540
At 1,300 stations or so, that means this ruling will cost Clear Channel:
100/station: $18.8m --- 500/station: $94m --- 1,000/station: $188m
I can tell you firsthand they are not making that kind of revenue on their streaming side. Clear Channel stands to lose on the order of $100m this year. Ad revenue might help offset it next year, but we're still looking in the range of $100m or so for 2008 as well. CC most definately did not sign up to lose $150-300m in the next two years; it's really not a good time.
On a side note: If you want to hear something new on a Clear Channel station, call in or email the PD (production director). Tell him or her you want to hear it. Ask them to check CCADS ('seecads'). If it's not available, tell them to request it from Bobby Leach. Offer to lend them your cd, if it's safe for radio play. Call in or email your favorite jock; tell them to bug their PD about getting the track. Get your friends to request it. If you know people in other major cities, ask them to do the same. If you're not asking the impossible, they will listen and your favorite track will get played. As a bonus, if it gets into the system, anyone can request it in any city and they won't have as much hassle.
-1 raving lunatic; +6 subGenius... Things even out...
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.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
I almost don't listen to music and I never listen to music on radio, but I do listen to the local talk shows that we have in Toronto (Ontario, Canada.) The CFRB1010 (cfrb.com) and AM640
(640toronto.com) are the two stations that carry really great talk show hosts. Anyone can call onto the stations and express their point of view about the subject at hand.
Most of the time the subjects are local to Toronto or Ontario or Canada, but sometimes we have world wide subjects as well and it is not all politics, it can be anything, from RIAA and DRM to health care to municipal/provincial/federal politicians to climate issues, class sizes, you name it, we have had it discussed on radio.
These are AM radio stations of-course (that's why I will never have an iPod or something like it, because it has no AM radio.)
So for me good radio is about discussions of local/global issues with ability to express a personal point of view. Oh, and we have about equal number of conservative/liberal talk show hosts and though I may not agree with all of their views, they are still interesting to listen to.
These stations provide their own internet streams and since their content is original (talk shows, weather, traffic, news, commercials) RIAA can't force any royalties. Of-course it's different for FM music channels, but I don't care, those are not essential. By the way in Canada AM radio is federally regulated. Is it very different in the US?
You can't handle the truth.
EXACTLY! You hit the nail on the head. Non major label acts (ie. local and indie label acts) are a threat to the big 5 and the RIAA. The largest 2 reasons that CD sales have declined in the last decade is because a. quality and variety have diminished and b. paying $12-$19 for crap is a further deterrent. Wider and alternative channels to get music they don't control (and artists they are not actively screwing out of royalties) has great potential to become a massive competitor were it ever to gain traction. So the obvious plan of course is 'don't let it gain traction'. When the RIAA gives their gripes against digital distribution it usually comes down to two things about the format. 1. Users can just listen to what they want, when they want. Which is akin to playing from a CD. 2. "Perfect" digital copies can be made which obviates the need to purchase CDs or official distributions. Do either of these apply readily to Net Radio? (Pandora maybe 'slightly' to the first point since you have some control over which artist, but still not completely a replacement for owning the CDs). The answer is NO. So why are they against this just as they are against MP3s? Make no mistake about it. When it comes to the net radio stations, this is less about protecting the playing of their big acts than it is keeping uncontrolled competition out. They've had a sweet (corrupt really) deal going on for a long time. The artists largely get screwed BY THE LABELS (that fact doesn't get enough press) and they have a cartel lock over what actually makes it to the consumer. They will actively hunt and kill anything that is a threat to this. This is just the latest hunting trip.
It's just typing - people talking shit. It doesn't have any worth in the same way that a symphony, novel or tv comedy does. You don't need money from your last post to keep you in food, shelter etc while you work on your next post.
/. poster felt that his post was worth being copyrighted, he would fill out a form, send it, and a copy of the post, and a check for a modest sum, to the Copyright Office. Then he would get a copyright on it. The government wouldn't only dole out copyrights for works they felt were meritorious, but they also wouldn't give out copyrights to everyone for everything. Instead, they'd only give them out for people who took the trouble to ask, placing the judgment -- not of artistic merit, of of whether or not copyright was an incentive -- in the hands of the people getting the copyrights. And since they'd have to make a token investment in order to get the copyright, no one would just get copyrights for the hell of it (since that would cost them money) but they would instead judge whether or not the money they could get from exploiting the copyright would at least pay for the cost of getting the copyright in the first place (the copyright cost should be token, really -- e.g. the current $45 fee), plus a bit. Then, I suspect, virtually no one on /. would ever bother to get a copyright on their posts, and the level of posting would probably not decrease, indicating that copyright is not our incentive here. But people who make works for which copyrights are important to them would still get them.
Whether or not the people who make it need to make money from it has nothing to do with its artistic value. A number of artists made money though other means (they had day jobs; they were supported by others; they were already rich; they had become rich enough from their previous work to be able to retire comfortably, yet didn't) but still created artistically valuable works.
And similarly, people talking shit can be valuable too. Copyright does not make artistic judgments. The law and government are absolutely no good at doing that, and shouldn't do that. Right now, these posts (well not mine, see below) are copyrighted, and copyright attempts to serve as an incentive to cause them to be created. I agree that this is bad, but not for the same reason as you. I think that copyright should be an opt-in system. If some
Formalities are a good way of trimming back copyright so that it serves as an incentive, yet isn't granted more than it ought to be.
Where did you get point 3 from?
Partly from all post-Anne copyright law, which always expires after a particular time. Partly from human nature, which is greedy (that's not a bad thing; artists seek out copyrights because they're greedy, and the public gives out copyrights, yet limits them, also because they're greedy). Partly because the obvious (yet sadly unrealistic) ideal world would be one in which everyone who could create, did, yet there were no copyrights, and everyone was free to enjoy works as they saw fit, amass huge collections for free, etc. And partly because there really is a self-evident public interest in having unrestricted works, just as there is an interest in having more works.
If the copyright for a film lasted 5 years, then when the next format comes out, the copyright holders would make £0, whereas now they make a lot more.
This has yet to be determined, actually. DVD was a lot more popular than VHS, but HDDVD and Bluray have yet to be. And with backward compatibility in place, there's less pressure to replace one's DVDs with a newer format. Eventually there will be a shift, but it'll be caused more by changes at the supply level. And we've seen a lot of replacements come out that have challenged CDs (e.g. DVDA, DAT, Minidisc, SACD) and none have gotten anywhere. Downloadable music is doing okay, but more on the piracy side of things. Free MP3s are popular against costly CDs; costly MP3s (or whatever), significantly less so.
P
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
"New Royalty Rates Could Kill (Legal) Internet Radio (in the USA)"
"You're everywhere. You're omnivorous."
The five years was just an example. I actually support shorter terms (maybe 1 to 2 years), but with frequent renewals that provide an overall maximum of something like 20. With an exception for software, and maybe some other classes of works that 'age' so rapidly that an overall maximum of 5 would actually be best.
Also, I think we should split the right to copy from the right to produce derivative works. Direct copies, with minimal changes to the content should be preserved for 20+ years. However, we could allow derivative works sooner than that. That would still allow for substantial incentives to producers, but would also allow for mash-ups and the like within a few years of the creation.
That's an interesting idea. My take on this has been to have an exception for natural persons engaged in noncommercial activity. So people could make mash-ups right off the bat, but not if they charged for them (or used them as a draw for advertising, etc.) and not if they were a corporate entity or the like. Given that most individuals ignore copyright these days anyway, but do support the idea of copyright applied to commercial endeavors and entities, I think it's in keeping with our social norms.
Combine that with a registration system for the copyright after a few years (to solve the orphaned works problem),
Registration should be required no more than a year after publication (which would be broader than what it consists of now). If an author can't be bothered to register, I don't see why we should be bothered to give him a copyright. This is more generous than the old system (which required them by publication), less generous than the present, insipid, system (which doesn't really require registration at all), and is kin to the patent system (which gives people a year to decide, and works pretty well in that regard).
Remember, most orphaned works are orphaned at birth!
and I think we'd be doing pretty well.
Yes, but a few more things are wanting. For example, repeal of chapters 9-13. Having measures in place that make copyright and DRM mutually exclusive, so as to discourage the use of DRM (I don't think it can be banned, due to free speech, but we surely don't have to give people copyrights for DRMed works). Having measures in place to fully federalize copyright. Limiting the use of adhesive contracts and terms of sales, so as to reduce the dangers and use of EULAs. Exceptions that take into account the reproduction that is unavoidable in our computer technology, but which is not really material in an infringement sense. Better safe harbors for ISPs. Statutory secondary liability (the courts have screwed up on this, otherwise I'd leave it to them). No copyrights for classes of works that don't need it, e.g. architectural works. Some other formalities, such as deposit. Pulling out of Berne and other treaties, but providing for unilateral national treatment. Better treatment of sampling (it's basically just audio collage, and is transformative enough that it would generally be fair). There's some other things too, but already this list grows large. Dealing with things like DRM, however, are key before we can think we're doing pretty well.
-- This and all my posts are in the public domain. I am a lawyer. I am not your lawyer, and this is not legal advice.
I've read the article, and while the royalty rates are on the ludicrous side, I've got to wonder why everybody is thinking that this is a bad thing. Frankly, this could be the best thing to ever happen to internet radio and the music scene.
I've been thinking about the impact a lot since reading it, and it seems to me that there are two groups of radio stations to consider:
1. Online pirate stations who are broadcasting the music illegally. While I don't think they should be pirating the music, the fact is that if they are pirating it now, making the royalty rates higher are not going to stop them from pirating the music and playing it. To misquote Terry Pratchett, "they're PIRATES - they don't care about the law." So, no real impact there.
2. Online stations that are playing the music legitimately. This will have quite an impact on them, and most likely a positive one all round. Well, I should say, for everybody except the labels represented by the RIAA, who just got themselves priced out of the market.
It seems to me that online radio isn't going to disappear, but will do something else - the broadcasters will vote with their feet. SoundExchange and the RIAA will have a very difficult time proving that retroactive royalties are due in any court of law, and the larger stations should be large enough to defend themselves, so I doubt that the RIAA will press too hard on that one (after all, if the RIAA tried to collect from AOL, you'd have a battle royale that would take years to sort out, and my money would be on AOL). But, with the royalty rates so high, no radio station will be able to play music from an RIAA label, and the broadcasters will be very hungry for new material.
So where do they find this new material? Independent artists. With the online broadcasters desperate for material, it will be a seller's market for independent recording artists, in the process giving that section of the market just the sort of boost it needs. This will raise the profile of the independent music scene, while at the same time allowing the independent artists to negotiate a reasonable royalty situation with the broadcasters. So, the listeners who get exposed to new (and less corporate) material win, the independent artists win, and the broadcasters get out from under the RIAA thumb, so they win.
Come to think of it, the only people who lose are the RIAA, who just got shot in the foot and lost a market...
Robert B. Marks
Author, Demonsbane in Diablo Archive
This is the big misnomer: It's not RIAA music. It's any copyrighted music that a station hasn't been granted explicit permission to play.
In many cases, the artist doesn't own the copyrights, the record label (small, medium or large!) has been assigned the copyrights as part of the record deal made with the artist.
Internet station can survive if they go out and get permission from the copyright holders for every track they play. This is tedious and time consuming, but still economically better than paying under the statutory license.
It will only kill those who try to stay legal. Back in 2002, many webcasters got together, hired a lobbyist, and got the Small Webcasters Amendment passed, which allowed small broadcasters operate on a percentage of revenue model (11% aprox). The new rates start out at effectively 10-40 times what the old rates were, and by 2010 increase by 2.5x. So by 2010, legal net broadcasters will be paying 25-100 times what they paid in the 2000-2005 periods.
Of course, you can just say, screw it, and not pay, and hope you're not noticed. It's actually worked very well for lots of stations out there.
Net radio didn't cry wolf, it sounded the alarm. And only through the listeners and supporters who wrote and called their congress people was the small webcasters act passed.
We are going to have to act again to preserve the state of internet radio as it is. Only this time we should get right to the cause, and act to get the provisions of the DRPA and DMCA that removed the fair use exemptions that over-the-air broadcast radio has from these royalty requirements.
"An album, CD, tape, or mp3 is the product you sell.
A radio station playing music is advertising the product.
Are the stories published in a newspaper or magazine merely advertising for the writers? What about talk radio Is that content merely advertising for the commentators? What are they selling? Are journalists and writers getting rich by touring the world and performing at stadiums? Are sports broadcasts merely advertising for the sports teams?
Content draws listeners, and the station must pay for content to attract listeners. A regular listening audience allows the sale of advertising time. What is the difference between paying a journalist, a comedian or a composer for content?
Why does this discrimination exist? Where is the outrage against copyright control over the written word, or photography, or works of art? Why can't one radio station merely re-broadcast the news report of their competitor on a thirty second delay (but with their own advertising) and save lots of money on staff and resources? Would it be acceptable in your world for every network to sponge off one network to broadcast pro sports?
Aren't composers and the companies which back them financially worthy of being paid for their time and effort? The people who write software code get a salary, so why not the people who write music? It seems that if it's not popular entertainment (games, movies, music, please stand up), then copyright is not a problem around here.
Please don't start with the "fat-cat music biz scoundrel ripping off innocent musician" argument, because it's so full of cliché that I'll retch if I hear it one more time. Lots of people make bad business choices every day, either because they're naive, stupid, have bad luck or all three. People get ripped off too, often for the same reasons. Rock stars are heroes and have a public outlet, and so they can cry their woes from rooftops and their sob stories are embraced by the masses. Boohoo for them, but their plight should be exceptionally low on the list of priorities for world revolution.
Stating that music content on a radio station (broadcast or online) is merely advertising to encourage the purchase of the same entertainment product is just plain wrong. It is a factor in the equation, not the entire equation.
"If it is truely a free market, then you would create your own station and compete
instead of demanding extra money from the successful."
You're confusing "free to make choices" over "free to do anything I want". The copyright holder can demand more money, but a station doesn't have to accept. They can find different content and not have to pay that copyright holder. Or they can continue paying, but find ways of generating higher revenue. If enough stations reject the copyright holder's costs, then maybe the cost will come down, or maybe the copyright holder will be stubborn and put themselves out of business. If enough stations acquiesce and find ways to make more money, then the business risk has paid off for the holder. This is rather simple stuff.
RTFM; please, I beg you.