Slashdot Mirror
Study Says $2.3B in Net Radio Royalties by '08
An anonymous reader writes "According to a newly published report, the music industry will have a nice pile of cash to collect from net radio owners in 2008 — a staggering $2.3 billion to be exact. The report is based on current performance royalties paid by terrestrial radio vs. internet radio, and taking into account projected growth in listenership. Meanwhile, the corporate Clear Channels pay just $550 Million for broadcasting the same songs we've all heard before. Hardly a fair deal."
That's why I built my latest little project. MP3's by the boatload, napster
squared. with storage approaching $400 / TB why not copy *ALL* the music ?
MP3 is the standard, no matter what the big corps want you to believe.
this mp3 file sharing system will merge two collections seamlessly
and remove doubles, you can tag your files and if you have a band you can
use this system to spread your music to your fans. It's just another CDN,
but one that is based off KNOPPIX, so it comes with all the power of a
full Linux distro, and gives you a single dedicated box to play and share
your music on.
It's open source, and if you feel like hacking around with it be my guest
(most of it is PHP, there is a little bit of C in there).
MP3 Search Engine
According to a newly published report, the music industry will have a nice pile of cash to collect from net radio owners in 2008 -- a staggering $2.3 billion to be exact. The report is based on current performance royalties paid by terrestrial radio vs. internet radio, and taking into account projected growth in listenership.
First, this assumes that everyone will pay the new fees instead of finding alternative unlicensed content (that is free or Creative Commons or other similar content).
Meanwhile, the corporate Clear Channels pay just $550 Million for broadcasting the same songs we've all heard before. Hardly a fair deal.
Second, it is fair. It is called economies of scale. Clear Channel deals is huge quantities. To put it another way, if you go to a local corner market and buy a pack of four rolls of toilet paper for $2.00, then you go to Costco and see the same brand of toilet paper in a box of 40 for $10.00, is that unfair? No, it is called purchasing in bulk. Same as the sort of thing that MS does with corporate VLKs versus regular retail prices.
Are they trying to make money or shut down internet radio? I was under the impression that most internet radio stations were run for fun, not profit.
Libertarian Leaning Political Discussion Forum.
That projected growth is on the tacit assumption that folks will pay more for the same product -- and they won't, The broadcasters will either raise fees or shut down entirely. Either way listenership goes down.
There seems to be the gross assumption that Internet radio is insanely profitable. While it certainly enables small producers an outlet for their work vs conventional broadcasting, they still tend to have small audiences with niche markets.
RIAA just needs to keep pushing until all we listen to is pirated, ripped MP3s all day, everyday.
If you have a crowd of credible amateurs giving your product exposure in a new medium with excellent youth market penetration, the best thing to do is shut it down. After all, they should be re-imbursing the labels for...um...the free product advertising?
Oh, wait, that's actually a terrible idea. And from those peerless innovators in the recording industry - who knew?
Tags != Comments, and -1 (Troll) != -1 (I Would Respond Angrily To This Poster So They Must Be Trolling)
live365 and others will go the way of the dodo. Don't you just love how incredibly stupid these music execs are?
The music industry isn't being fair? Stop the presses!
I see your informative link, and raise you a pithy comment.
And the answer is that they are trying to shut down Internet radio. Consider this: currently, you can connect to the Internet almost anywhere with certain data packages from cell phone carriers. Soon, in major metro areas you'll be able to do the same via municipal WiFi or mesh networking. Some people have been streaming Internet ratio in their cars for years, so fully Internet-enabled car stereos can't be far behind. This is a situation that gives Clear Channel and other large radio companies nightmares: the ability of people to choose from thousands of commercials-free radio stations instead of being stuck with the same selection of ten traditional stations.
I think we can all agree that the RIAA and MPAA are stuck in the past with obsolete marketing and values. They are ether to retarded to see where things are and where they going or they are realizing that they are the middle man that is easily replaceable via the most abundant resource we have at the moment, the Internet.
/diaf
What we need is for these people to be slapped back down to the supporting role that they started out as, this is a prime example of abuse of power.
Quick sue the collage students!
Huh? What did you expect? You've never been involved with the mafiaa, or you'd know that you can't get a fair deal with 'em. Monopolies don't tend to make fair deals.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
That's the worst possible word to describe what is simply IP radio. What does it even mean? That the radio travels over lines that are on the ground? And what happens when it goes through the millions of wireless broadcast points and everyone can access it like it was...radio?
Radio is radio. The idea that they should be taxed differently is absurd. Even more absurd is the idea that IP radio be taxed more than normal radio because normal radio can be freely recorded and digitized by anyone within the broadcast radius, whereas to get IP radio you have to be paying for internet access (most of the time).
TLF
I do not respond to cowards. Especially anonymous ones.
$2.3B per year on a $23m investment in bribing congress (http://opensecrets.org/industries/indus.asp?Ind=B 02) is:
($2,300,000,000 / $22,699,424) *100%= 10,132% return. = Damn near priceless.
Now RIAA members *could* invest in modernizing their legacy business model, but their current one is clearly much more lucrative.
OK say what you want to about the RIAA, but that's a funny line.
I think that the addition of the 'levies' will reduce the number of ( legit ) stations broadcasting on the net. So the net ( no pun intended ) income will be less.
---- Booth was a patriot ----
Check out www.saveourinternetradio.com. Sign the online petition. Write your Congressman. For anybody out there who listens to stations like Radio Paradise and Pandora (my personal favorite), let your voice be heard before these staggering fees kill these great stations.
"End of Line." - MCP
So why don't a bunch of indie bands get together, and create an alternative to ASCAP/BMI/SESAC cartel and set their OWN rates for radio royalties much lower... or even zero.
Ordinary radio stations are expected to play [only] the songs they've received incentive pay or broadcasting discounts to promote. For example, if a performer is giving a concert soon nearby, airplay will be purchased of that performer's songs to drive ticket sales.
There is software that "listens" to the radio station and verifies that the songs and commercials they've been paid to play a certain number of times are actually being played that many times. Usually it is fully automated, but occasionally a human with headphones is needed when the software isn't sure (kind of like voice recognition software).
I interviewed at a company that provided this software in 1995 (it ran under DOS).
You nailed this sentiment.
It seems as though some of the individuals involved here (typical of government bureaucrats BTW) don't have the first idea of basic economic theory:
If you raise the price of something, the demand goes down. How simple can you get here?
There are some product like gasoline which in the short term doesn't display this tendancy, although even the oil companies have been required to adjust to fuel efficient vehicles, where even state taxation authorities have realized that highly fuel efficient vehicles don't pay nearly the same fuel taxes that gasoline hogs once did... proportional to the number of miles those vehicles actually drove.
In the case of a pure luxury consumer product like music, this sort of economic theory is much more apparent. For music performers who perform live concerts, they have known this for decades and for the most part have astronomical ticket prices because their arenas and other places they perform at are limited in size. They can get away with the high prices because it is expensive to build larger arenas or performing halls. Cutting their audience size to 1% of those who might be willing to attend if the ticket prices were more reasonable wouldn't make a difference if they can still fill a 100,000 seat arena with that 1%.
For internet radio, the number game is something that plays out significantly different. First of all, most people who are hard fans of musical performances have been used to obtaining "free" music over the internet, even if they subseqently purchase the same music on a CD afterward. That is the key point, that much of what is done on the internet is a form of advertising.
While I have no doubt there is some way that music studios can "maximize profit" here in terms of royalties for these internet music rebroadcast sites, the amount of money to be made is going to be even at best far less than this $2 billion that is being claimed. The money simply isn't there. And even if it were, how much of this is going to be coming from other revenue sources that the music industry currently is already taking. If you spend it on a subscription to an internet radio station, are you going to purchase the CD, or go to a concert with the same money? I don't think so. It has already been spent.
It just shows that its time once again for Americas FAVORITE game show!!!!!!
OUTSOURCE
Simply outsource the radio broadcasting service/equipment to someplace where location != United States.
Support your local school shooter, give them your firearms.
And all this just as I started listening to them... thanks a lot, Copyright Royalty Board. Assholes. Actually the fees are retroactive to 2006, so they still owe $1m for 2006, they just did not know that in 2006. This is ridiculous.
-Em
RelevantElephants: A Somatic WebComic...
The *royalty* payments are only for RIAA/BMI/ASCAP/Harry Fox related artists and labels. All the labels in the indie scene and the labels are actually labels that are much bigger than you might think (though this excludes the fake indies or 'boutique labels') will give you - if you ask nicely - a blanket license not only to stream their music but to podcast it as well. Podcasting has serious licensing issues well beyond streaming internet radio but all of this is obviated if you are allowed to negotiate with the label or the copyright owner directly. Remember the RIAA/BMI/Harry Fox are acting on behalf of *their* labels, not music in general. They can not dictate what a label or an artist themselves say if the artist and the labels are not part of that agency.
. html
To be clear, my show gets about 1500 listeners a week and industrial / new wave electro and here is a list of labels that have given permission:
http://www.bloosqr.com/the%20essence/the%20labels
*the irony* of these laws it is giving these labels much more exposure because by definition the indie/hipster/creative kids making their shows are now even more likely to only play music from the indie labels and more over anyone looking for internet music is more than likely to be exposed to music from these labels which given the distate for the "big 4" could easily turn some of these artists/labels into the next big thing
I couldn't get to that article at BetaNews, and I'm not dusputing their contention that Internet radio is facing a huge bill from owners of the rights to sound recordings, but they have left out a few crucial elements in their description of what is occurring.
The fees payed to ASCAP, BMI and SESAC go to the composers of work, the first two are not-for-profit organizations who distribute most of the money they collect and all stations - terrestrial and Internet based - pay them.
They are based on a percentage of the station's income and amount to approximately three percent, according to the comentary I have read by the owner of an Internet radio station.
The "performance royalty" rates recently announced by the CRB are a fee collected by SoundExchange on behalf of record companies, they are charged on a "number of listeners times number of songs" baisis, and - thanks to the Digital Performance Right in Sound Recordings Act of 1995 - they are paid by Internet broadcasters only. The rates for the period covering 2006 - 2010 are so extreme they threaten Internet radio as a viable model.
I don't doubt their projected figures, though. It's easy to arrive at them. Just estimate the number of people who listened to Internet radio music stations in 2006, multiply that by the number of songs you think got played and multiply that by $.0008.
A few billion wouldn't suprise me.
I don't care why you're posting AC
The problem is that it can be a significant legal hassle to get the necessary agreements in place, a hassle which is costly in both time and money. The result is that many internet radio stations will likely just disappear.
What the indie scene desperately needs to do is band together and form a licensing clearing house, similar to ASCAP and the like, which could serve as a single point of contact for radio stations to license their works.
Its not as hard as you think to be honest.. I'm not saying its a piece of cake but there are two sides of this.. the legalesque is only needed to cover you in case the label is going to sue you. If as is mostly the case the non-ascap/bmi labels aren't going to sue you for the obvious reason that streaming radio is an asset, so most people 'fly under the radar'. Getting permission isn't much more than sending labels an email.. a few of them are actually starting to clue in to this and have blanket permission statements on the website ( archenemy, freezepops old label is a good example of this).
-best,
-avi
Of the radio stations I listen to, most are very niche internet radio stations run by DJs and the associated community. Out of maybe 100 djs, a good 20-30% of them actually produce their own tracks and use it as a form of marketing for themselfs.
We're talking very very small record labels here, with a handful of releases a jear catering for DJs. This is so highly in contrast with what the big labels are doing that I really don't think they have enough perspective to suggest that this should be adopted on a wider scale.
But as you mention, this only applies to artists signed to big-name labels rather than us little folks... but I've not heard many internet radio stations playing artists signed to labels which are members of the RIAA etc. mainly because it's all mass marketed crap.
The only people I can see being hit by this are the stations which play lesser known pop from the 60s through to the 80s, who's copyright is still held by the big record labels but is no longer available in stores or on commercial radio.
1. I myself have bought albums after hearing certain artists' songs on other net radio stations -- music I would never, ever, ever have heard otherwise except perhaps in the drunken haze of a goth club.
2. Several independent artists have sent me singles and even entire albums, encouraging me to put them in rotation. To quote the latest, after he sent me a few samples and I liked 'em:
This has happened several times. It's good for the artists who are trying to get noticed; it's good for the audience who gets to discover new music; it's good for the broadcaster cause it's just fun. I get permission from many of the labels or artists to play their stuff, and when I don't, well, it's a freaking 96k broadcast that can't be copied without some technical know-how (certainly much more difficult than jamming a tape into your radio and hitting "record"). Exactly who is being harmed here?
The RIAA's outmoded and antiquated business models, and their continued attempts to strangle the life out of emergent technologies, is absolutely appalling. I'll continue to broadcast from my host in Germany and here's a big screw you to the suits. I don't make a single cent off my broadcast, and I don't play the kind of music that would come close to competing with the mass-appeal fare on the normal airwaves. You'll never get a dime from me.
mirrorshades radio -- darkwave, industrial, futurepop, ebm.
If internet radio sends only a single copy of the music (At the new low low price of $.0008 per performance) And then sends play lists. The radio station has only played it once. How long it is "cached" on the user's computer is not something the radio station need to deal with. Once "cached". Under fair use it can be put on iPods and other media players.
Looks like a good deal to me.
-- Linux Consultant
This proposal is an incredible increase for a small web broadcaster like
http://somafm.com/
Without my soma, I won't want to play sex games with all the other children.
"All citizens are expected to be involved socially; spending time alone is discouraged and sexual promiscuity is norm. Recreational drug use has become a pillar of society and all citizens regularly swallow tablets of soma, a narcotic-tranquilizer that makes users mindlessly happy."
Ref: http://en.wikipedia.org/wiki/Brave_New_World
I'm a frequent listener of net radio and the stations I've been listening to have been advertising a website that has been put up to help support net radio. The website is www.savenetradio.org they've got a petition setup on there as well as other ways that people can help a good cause. Spread the word, tell your friends about it, help stop the madness that is the RIAA!
Why not just try to merge these contracts into one "starting point" contract for the labels to place on their webpage? No doubt some labels will change it. But, as with OSI approved licenses, you could still have some site listing everyone who follows more-or-less this license. Such an indexing site is a major selling point of posting the license because radio operators themselves will find your material more easily.
A big boost to the labels might be asking the radio stations to clearly present their playlist *with* links to the artist/label. I'm sure more labels would the generic license on their webpage if they knew it meant more click through traffic.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
This just illustrates that Clear Channel is stupid, careless with their shareholder's money, or knows they'll still come out ahead on advertising revenue because we're stupid and continue to listen to the same music over and over again on the radio, rather than on our iPods.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Why must I depend on some commercial entity to produce music for me to enjoy?
Why cant I have a software, that I tell that what kind of music I like, and it on-the-fly dynamically generates a random song for me that I can enjoy and listen to?
A petition can be signed to over turn this ruling can be found here: http://www.petitiononline.com/SIR2007r/petition.ht ml
When a man lies he murders a part of the world.
couldn't these radio stations drop all these artists who belong to the riaa, and just play indie music, seems like a win>win>win situation -- riaa's artists dont get radio play, or payed = wake up call, so they start their own label, indie artists get exposure they deserve, they gain more fans, and the trend continues to grow until riaa, is buried like a dinosaur bone. and no archeolegest i know would ever dig them up again.
Here's how it will work: since the record labels can't use Payola any more, they'll just offer the music they want to push to broadcasters FOR FREE. All other music, they'll have to pay royalties on.
It has the same affect, the balance line goes up for stations who play the crap the big labels are pushing. Legal payola, and this time it isn't costing the labels anything!
Disclaimer - I'm the owner of an internet radio station.
Independent labels are starting to worry the majors. In particular, Internet Radio plays a big role in this as it tends to help the independents & the majors would probably be happy to see it go away.
Specifically, in the genres we support, artists have had some great success on the Billboard charts in 2006. Most notably, Mindless Self Indulgence & Cruxshadows who each took a turn at knocking a major out of the #1 spot, yes that wasn't a typo, they each hit #1 on the dance singles chart for several weeks, knocking first Justin TLake, then Beyonce out -- to the majors, that's lost $ & lost prestige. And that's not all, several other artists from the "Goth" genre also showed up in the Billboard top 20 charts in 2006, pushing the pets of the majors down the ladder every time.
We play & promote ONLY non-major label artists, so they (& their labels) benefit from our existence. Independent labels seem to be more clued in to the impact of the internet & use it to their advantage as the majors blunder around like blind elephants suffering increasing brain damage from repeatedly bumping into walls.