Net Radio Appeal On Royalties Rejected

Station writes "The Copyright Royalty Board has rejected a request to reconsider its March decision to impose an onerous royalty schedule on Internet radio broadcasters. '"None of the moving parties have [sic] made a sufficient showing of new evidence or clear error or manifest injustice that would warrant rehearing," wrote the CRB in its decision.' The recording industry and its royalty collection organization SoundExchange are jubilant over the ruling. '"Our artists and labels look forward to working with the Internet radio industry — large and small, commercial and noncommercial — so that together we can ensure it succeeds as a place where great music is available to music lovers of all genres," said SoundExchange head Simson in a statement. Noble words, but after today's ruling — which will take effect on May 15 unless the US Court of Appeals for the District of Columbia Circuit agrees to hear an appeal — there probably won't be much of an Internet radio industry left for SoundExchange to work with.'"

Comments

Dammit!

[Anonymous Coward]

And Internet radio was the only radio left that didn't suck.

Re:Dammit!

[richlv]

i'm wondering, why not just dump all the artists that are dump enough to let somebody like that govern their work ?
no sane artist would ever try to limit public appearance of his works, if he wants to promote them. getting tracks on the radio, any radio, is the best they can get - that improves their share of the "market" (meaning music that is listened to), which in turn increases other turnaround (concerts, merchandise, albums - in that order ;) ).

so, if a part of the radio space dumps those artists, other, better artists get more chance to capitalise on this dumb decision.
or i should have attempted to follow this more closely and they are imposing royalties independent of the content ?

Re:Dammit!

[Dr_Barnowl]

Because the royalties don't just go to the composer, they also go to the performers. There will be copyright on the recording of the performance, and the holder of that copyright will profit from royalties.

Given the enormous expense of producing classical music verses popular music, that's not so bad. The vast majority of the expenses associated with popular music are tied up in promotion. Full orchestral pieces need a huge soundstage, require you to pay a large number of highly trained people, need extensive rehearsal beforehand, etc. A record by Ms Spears just requires her to squawk into a mic in a quiet room for a bit and the geek with the autotuner to put in an all-nighter. I have no arguments with paying the relatively modest premiums for a superior product.

I find this ruling a shame though. The comments by the industry body that they are excited to be enabling the internet radio industry are such bullshit. They are secretly peeing their pants with glee that they managed to kill off a source of virtually free, high quality digital music, because without it, listeners will obviously be more inclined to spend some money.

Re:Dammit!

[funkyjunkman]

Your suggestion that "A record by Ms Spears just requires her to squawk into a mic in a quiet room for a bit and the geek with the autotuner to put in an all-nighter." supports your argument that classical music somehow costs more money to produce than, well, every other type of recorded music shows your complete ignorance on the topic. As a professional recording engineer and producer with two decades of experience who has worked with not only popular artists like J Lo but also with relatively unknown folk artists playing hammered dulcimer and celtic harp, I would like to clarify that your idea of the where recording budgets are spent is beyond ridiculous. Your blanket statement that if it was recorded by an orchestra instead of a smaller ensemble of any sort it must be "a superior product" pretty much proves your bias as well.

I don't think I need to explain myself further as there are numerous pages on the web to fully explain how a recording budget is spent, but I thought it important to explain to anyone who might read your post that your assertions are not only silly but false as well.

Re:Dammit!

[Artifakt]

The problem I have with this is that classical music does get public subsidies, and those pay, at the very least, for the musicians to practice, train, and acquire reputations that make the sales of their reproduced music possible. In many cases, the subsidies buy recording gear, pay the light and heat bills for the halls during the recording process, and otherwise figure more directly into actually producing CDs. We* are funding parts of the production process.

*(meaning everyone, in the US, who lives in a local venue where classical music ticket sales are not subject to the entertainment tax but it is applied to other musical performances tickets, or those where it recieves a share of the local taxes as a subsidy, or where it gets federal grants - those there conditions together describe almost all classical performers, with a few possible exceptions such as the NBC orchestra).

There are supposed to be checks and balances, just as there are for government subsidized public TV programming. What we've seen there though, is the government does a favor for a friend in the industry. Even if taxes pay to develop a show such as Sesame Street or Barney, when the government auctions off merchandising rights and such, they go for absurdly low sums to insiders who make most of the money, instead of a deal where the taxpayers actually stand a chance of getting their investment back. While some local and state governments have been a bit more responsible with classical music, there are definite insider deals there as well.
      So, as you put it, it's not so bad. It could be more equitable, more efficient, and generally better though.

Look on the bright side

[jkgamer]

With internet radio gone, VOIP gone, just think of all that bandwidth that will now be available for WoW!

Re:Look on the bright side

[Anonymous Coward]

it will be consumed by spam first.

The whole point is to kill internet radio.

[isaac]

The whole point of this ruling *IS* to kill internet radio which poses the greatest threat to the vertically-integrated, homogeneous pop music environment that is the lifeblood of the RIAA. Without alternative venues for independent artists, the major label combine gets to pick the winners in the market. (Nevermind the detriment to the market itself - this is about controlling the whole pie, not the size of the pie.)

Sometimes I find myself wishing the RIAA got everything they ever wanted, if only to see how their market collapses. Then I realize it's already happening.

-Isaac

Re:The whole point is to kill internet radio.

[tomstdenis]

You *can* both be an artist and not a studio pawn. So it's still possible to have music on Internet radio, just not RIAA music.

I imagine many independents would jump at the chance to stand out now.

Tom

Re:The whole point is to kill internet radio.

[isaac]

So it's still possible to have music on Internet radio, just not RIAA music.

No. It's possible to have music on internet radio IF you as a webcaster have negotiated directly with the copyright owner for every piece of music you play. Otherwise, you're paying a license to SoundExchange, period. They administer the statutory license.

Creative commons is about all that's left, since negotiating with individual artists (and songwriters) for every track is likely to be cost prohibitive. A nice guy might try to undercut SoundExchange by striking deals with indie labels and artists and then brokering these licenses to indie webcasters, but that would require a pretty enormous up-front investment for uncertain return - especially since you could rely on the RIAA and SoundExchange pulling out all the stops to shut you down.

-Isaac

Re:The whole point is to kill internet radio.

[Hes Nikke]

I imagine many independents would jump at the chance to stand out now. i imagine that these guys are going to do something to provide that chance!

Re:The whole point is to kill internet radio.

[TooMuchToDo]

What happens when Apple decides to be that broker? They've already positioned themselves to be the next media goliath, and they're going to continue to get bigger (just like Google). And somehow I don't think Mr. Jobs is going to have a problem putting an investment up to do the same as SoundExchange, since at this point it would just be people and code (the rest is already built out a la iTunes).

You hear me Mr. Jobs? Keep up the good work.

Re:The whole point is to kill internet radio.

[anagama]

Creative commons is about all that's left ...

Except of course for the fact that the rest of the world is connected to the internet too. All this means is that internet radio stations move out of the US. It doesn't mean you won't be able to listen to internet radio.

Re:The whole point is to kill internet radio.

[BlueStrat]

No. It's possible to have music on internet radio IF you as a webcaster have negotiated directly with the copyright owner for every piece of music you play. Otherwise, you're paying a license to SoundExchange, period. They administer the statutory license.

Wait...*I* am in an indie blues band, and we have no agreements with Soundexchange, the RIAA, any label, or anyone else. We give our CDs away all the time, and we're happy to let anyone broadcast us at no charge. Are you telling me these asshats want to try to charge internet radio stations in *my* name for playing *my* original music that I freely give to them to play unless I make some legal arrangements with Soundexchange!?!? How can they usurp *my* rights to let anyone I want play *my* music?

Maybe I'm confused, but it sounds like Soundexchange collects by default, that it's necessary to 'opt-out' somehow. If that's the case, I'm gonna find a nice free country to move to where I can give my music to whomever I choose for free if I like. I wonder what the weather is like in Beijing...

Strat

Re:The whole point is to kill internet radio.

[jamar0303]

China's a good place to consider. Play all the music you want- but less talk.

Lawyers Killed the Radio Star?

[cdgod]

Can't blame em... Unfortunately the internet is now another accepted medium of distribution. Hopefully this opens the door to innovative licensing such as cost per listener, etc.

Re:Lawyers Killed the Radio Star?

[jovius]

I have mused myself with an idea, that there would be identifier tag in every sample (44100/second etc) that is created, and each time a sample goes through an output device (hardware or software) it would be noted. Information would be sent to some central server, and this information used to distribute royalties to the members of this system. In this way you could be for example able to freely sample anything, and when you use that sample information about its creator would be automatically retained within your own creation as meta data. One song might include dozens of artists, and when someone samples from it, his song might include a few times more... When such a creation passes through an internet radio server for example, all the participants would get their share in proportion to the amount of samples / original creator. This system could also be expanded to visual creations, if the medium is intelligent enough. The problem is that all the devices and software would need to be modified, and the funding source is bit of a mystery...

Royalty

[Cemu]

Isn't the whole basis of the royalty because it is a digital duplication, an exact copy, and that is why regular radio stations don't have to pay this royalty? If this is the case why don't HD radio stations have to pay this royalty? It is a digital broadcast is it not?

Re:Royalty

[interiot]

That specific royalty is only because "HD Radio" isn't a generic standard that anyone can use, but is instead a proprietary format that iBiquity licenses out to people. There are other digital radio formats that don't have to pay this fee.

Re:Royalty

[ztirffritz]

You're mistaken. Internet radio is transmitting highly compressed copies that usually sound only marginally better than a cassette tape. It is digital in format, but that does not mean that it is of superior quality. There is a reason why the digital format on a CD is about 40 MB per song and an MP3 of the same exact song is about 4 MB. The quality is lower. If they were streaming some lossless format then maybe it would be a concern. The bandwidth costs alone would drive all but the largest webcasters out of business. A cassette tape recorded off of a strong FM station probably sounds better than most internet streams. This is not about digging money out of a new business. This is about shutting down a new business that threatens the vertical integration of the old business. If people have un-restricted access to new artists and music it becomes more difficult for the labels to force-feed their crap down our throats. This will drive everyone out of webcasting...except for ClearChannel and maybe AOL. Their precious business model secure until someone figures out how to bit-torrent radio streams. (Actually Octoshape is already doing that more or less)

Re:Royalty

[Bobzibub]

http://www.peercast.org/features.php
Anonymous broadcasting - clients do not tell each other if they are the source or just listening

Re:Royalty

[Goaway]

Of course he can - if he couldn't, those $1000 speaker cables would have been a total waste!

Don McLean

[lilomar]

So, bye, bye, Miss American pie...

You know what?

[Anonymous Coward]

having used internet radio as my sole source of mp3s since the early days of Kazaa, I think I might just subscribe to the stations. They're good people running good stations with good music. They deserve my money.

If you don't want to have your radio invaded by ads - subscribe today.

Pandora

[mark0]

They clearly have no idea how much Pandora has done to sell me their product. I have actually purchased CDs I would never have known existed were it not for internet radio. They're killing the goose that lays golden eggs.

Re:Pandora

[garcia]

They clearly have no idea how much Pandora has done to sell me their product. I have actually purchased CDs I would never have known existed were it not for internet radio. They're killing the goose that lays golden eggs.

They aren't trying to sell YOU their product. They are trying to sell their product to people with no true music taste. They want to sell them *whatever* they put out regardless of its quality. The only way to do this is to 100% control the delivery method so that they can control every aspect of the market from the beginning (ala American Idol).

People that are looking to self-determine the path that their music tastes follow aren't likely to participate in a culture created entirely for them and that doesn't help the RIAA's mission at all.

Re:Pandora

[jonwil]

3 things:
1.There is this belief among the RIAA that internet radio is a vehicle for piracy (i.e. people saving the songs and getting free copies)
2.Internet radio often plays non RIAA music too
and 3.The music that people listen to on internet radio and go and buy (even when its RIAA owned music) is not the music the RIAA wants you to buy.

Re:Pandora

[ari wins]

Just received, and followed, this e-mail today. I encourage everyone to do the same, as it will send e-mails out to your local representative(s) in the house and senate. I quote:


Hi, it's Tim from Pandora,

I'm writing today to ask for your help. The survival of Pandora and all of Internet radio is in jeopardy because of a recent decision by the Copyright Royalty Board in Washington, DC to almost triple the licensing fees for Internet radio sites like Pandora. The new royalty rates are irrationally high, more than four times what satellite radio pays and broadcast radio doesn't pay these at all. Left unchanged, these new royalties will kill every Internet radio site, including Pandora.

In response to these new and unfair fees, we have formed the SaveNetRadio Coalition, a group that includes listeners, artists, labels and webcasters. I hope that you will consider joining us.

Please sign our petition urging your Congressional representative to act to save Internet radio: http://capwiz.com/saveinternetradio/issues/alert/? alertid=9631541

Please feel free to forward this link/email to your friends - the more petitioners we can get, the better.

Understand that we are fully supportive of paying royalties to the artists whose music we play, and have done so since our inception. As a former touring musician myself, I'm no stranger to the challenges facing working musicians. The issue we have with the recent ruling is that it puts the cost of streaming far out of the range of ANY webcaster's business potential.

I hope you'll take just a few minutes to sign our petition - it WILL make a difference. As a young industry, we do not have the lobbying power of the RIAA. You, our listeners, are by far our biggest and most influential allies.

As always, and now more than ever, thank you for your support.

Re:Pandora

[heinousjay]

My musical tastes have nothing to do with this discussion. Some people, in fact a lot of people, do genuinely like the music from the radio, MTV, and heaven forbid, American Idol. It's not your job to decide if their taste is worthwhile, and deriding it doesn't make you cool.

Re:Pandora

[honkycat]

We're talking about law here. Don't try to bring right and wrong into it, it'll only confuse the real issues. :-)

Re:Pandora

[Mortimer82]

Actually it is: http://blog.pandora.com/pandora/

I got the mail too, but all I had to find it on the website was click the "Blog" link at the bottom on the page.

Re:Pandora

[Sancho]

Man, I'd just about kill to be able to find a link to this study I read, once.

The jist of it was this: the researchers divided people into two groups and gave each group the same set of songs. Each group was asked to rate the songs on some subjective scale. While the control group only got the list of songs, the experimental group got the list of songs plus an average rating of some kind (I don't remember if the rating was real or just made up numbers) indicating popularity.

The findings? In the experimental group, popular songs were rated significantly more highly than in the control group. The conclusion was that people considered the songs to be of higher quality if they thought that other people considered them of higher quality.

So don't be so quick to think that people can't be persuaded by the crowd. Next time the disc jockey on the local radio station claims that this is the "newest, hottest song from band X", maybe you should wonder if they're hot because people want to hear it, or if they're hot because the RIAA says so. Pretty soon, though, it will just be a self-fulfilling prophecy, and it will be hot.

Re:Pandora

[NearlyHeadless]

"Experimental study of inequality and unpredictability in an artificial cultural market"
Matthew J. Salganik, Peter S. Dodds, and Duncan J. Watts.
Science, 311:854-856, 2006.

Abstract: Hit songs, books, and movies are many times more successful
than average, suggesting that "the best" alternatives are qualitatively
different from "the rest"; yet experts routinely fail to predict which
products will succeed. We investigated this paradox experimentally, by
creating an artificial "music market" in which 14,341 participants
downloaded previously unknown songs either with or without knowledge of
previous participants' choices. Increasing the strength of social
influence increased both inequality and unpredictability of success.
Success was also only partly determined by quality: The best songs
rarely did poorly, and the worst rarely did well, but any other result
was possible.

boundaries

[TheSHAD0W]

This will only work against people and companies inside the United States; I predict that internet radio will still thrive, and the rest of the world will drive America's music tastes.

Re:boundaries

[Anonymous Coward]

This is exactly what irritates me about these stories. Why the panic?

Internet radio will just move off-shore, and continue unaffected. I see it said again and again on Slashdot, but it doesn't seem to sink in. The internet does exist outside the US. And there's links between the different countries!

Re:boundaries

[DGolden]

And those links cross the borders of countries at a relatively limited number of internet exchanges / peering points. Don't think that the Corporate Reich of America could never implement a "Great Firewall of the USA". And, unlike China, the CRA might even have the resources and technical know-how to make it work properly.

Re:boundaries

[Windrip]

Community radio cannot move offshore.

Re:boundaries

[smellsofbikes]

I've been listening to a lot of icelandic radio lately. It's disappointingly american-based, but at least it's not the same 30 songs that every american radio outside of college stations is currently playing. With that said, I also listen to a lot of college radio -- a whole lot.

Re:boundaries

[h2g2bob]

Radio Caroline here we come!

The RIAA looks forward to...

[haakondahl]

Working with our wholly-owned subsidiaries, who are of course exempt from paying royalties. What wholly-owned subsidiaries, you ask? Why, the very ones that the sustenance of this ruling has made possible.

If you're asking WTF

[Anonymous Coward]

then read this: http://www.savethestreams.org/serendipity/pages/fa q.html

A one-person example

[Morris Thorpe]

I just realized this.

I am a big fan of RadioParadise.com. I have purchased a total of 15 CDs over the past year or so. All 15 (I kid you not) were by artists introduced to me by RP.
In my case: No RP, no CDs. Especially now, you greedy pricks.

Re:A one-person example

[rantingkitten]

I'll second that. I run a synthpop and darkwave radio station (plug!) myself, and I have had people tell me they've never heard this or that artist before, and then go check out their albums. One even went to the VNV Nation concert here in Atlanta after hearing them on my station.

I also have artists send me promo tracks, full albums, and other stuff -- mostly indie artists looking for some exposure. If they're good (and they usually are) I put them in rotation, so dozens of people get to hear someone they've never heard before.

The artists love it. The listeners love it. No one is losing and everyone is gaining -- except the labels, who, in this day and age, are totally unnecessary anyway.

Some of the artists that send me stuff are easily good enough to get signed, and I know some have been approached, but they steadfastly refuse. They'd rather remain independant of money-grubbing middlemen and idiotic contracts, and get their music to the fans with channels of distribution their target audience is likely to use.

I started this venture after years and years of listening to net radio on live365 and other assorted places. And I bought music after listening. I know the system works.

Frankly, there ain't no Benjamens in the net radio trade. We broadcasters do this for the love of the music and because it's fun. Don't penalize us for bringing the art to the people. Don't penalize us, the artists, or the audience.

Re:The real question

[Korin43]

I believe the question is "Why does Internet Radio have to pay out the ass when normal radio only has to pay 'reasonable' royalties?" (Reasonable is of course up to interpretation)

Fuck...

[ktakki]

As a former musician, songwriter, and label owner, I relied on getting paid through performance, mechanical, synchronization, and transcription royalties. It was a regular, dependable revenue stream.

But I've gotten so dependent on internet audio streams like Soma-FM's Indie Pop Rocks. Sometimes, it was the only thing keeping me going when I was working my dead end IT job. I'd have the shortcut to the 128kb stream on my desktop and it was the first thing I'd hit, even before checking my e-mail.

When I heard a song I really liked, I'd write down the name on a notepad, check the artist's site to see if an mp3 was available and if not I'd get it from iTMS. Just like radio, internet streams drive sales.

I had thought that ASCAP and BMI (the performing rights organizations that collect and disburse performance royalties) based royalty rates based on a radio or television station's potential audience, but it seems more complex than that, seeing as the Library of Congress is setting basic rates.

Tomorrow, I intend to research this issue and write my congressman (Rep. Delahunt) and senators (Sen. Kerry and Sen. Kennedy) and ask them to look into this issue. I urge everyone who is a constituent of a senator on the telecommunications subcommittee to do the same:

Conrad Burns, MT, Chairman
Ted Stevens, AK (don't mention those "tubes", okay?)
Trent Lott, MS
Kay Bailey Hutchison, TX
Olympia J. Snowe, ME
Sam Brownback, KS
Gordon Smith, OR
Peter G. Fitzgerald, IL
John Ensign, NV
George Allen, VA
John Sununu, NH
Ernest Hollings, SC, Ranking
Daniel K. Inouye, HI
John D. Rockefeller, WV
John F. Kerry, MA
John Breaux, LA
Byron Dorgan, ND
Ron Wyden, OR
Barbara Boxer, CA
Bill Nelson, FL
Maria Cantwell, WA

E-mail and faxes will probably be better received than snail mail, given the fact that mail to government offices gets delayed while it gets irradiated to ameliorate biological threats.

k.

Decision only sets compulsory rates

[The Empiricist]

Copyright owners and webcasters can still negotiate rates (See 17 U.S.C. Sec. 114(f)(3)). The decision that the Copyright Review Board refused to rehear merely establishes the terms and conditions that enable webcasters to license copyrighted works without seeking permission from the copyright owners. If Congress had not enabled the establishment of these compulsory license rates, then webcasters would not be able to broadcast any works without seeking permission from copyright owners because Congress had introduced a digital performance right in the Digital Performance Right in Sound Recordings Act of 1995.

Copyright owners presumably are interested in maximizing their revenues, while webcasters probably would like to minimize their costs. Thus, both groups still have a incentives to negotiate. The compulsory licensing rates will not kill internet radio: they simply provide terms and conditions of last resort for copyright owners and webcasters who cannot otherwise reach an agreement.

Re:Decision only sets compulsory rates

[Percy_Blakeney]

The compulsory licensing rates will not kill internet radio: they simply provide terms and conditions of last resort for copyright owners and webcasters who cannot otherwise reach an agreement.

Compulsory licenses are meant to create efficiencies in the marketplace, such that the radio stations don't need to try and negotiate licenses from every single copyright holder, thus lowering costs for everyone.

Under your plan, though, the compulsory license would no longer engender efficiency; instead, it simply becomes a price ceiling. The radio stations will now have to dicker with every single record company over royalties, costing both groups immense time and money.

What will the result be? Small stations will have to pay higher royalties, as they will not have the leverage in their negotiations that the mega-corporations (i.e. Clear Channel) do. This will eventually force the smaller players out of the market.

Also, any independent artist or small record label will receive ZERO air-time, as it would prove too expensive to the radio stations to negotiate deals with all but the largest labels. Thus, the major labels will tighten their grip on the music industry.

So, the small labels, independent artists, and small radio stations will all take a hit, and possibly disappear. Perhaps you don't think that is a bad thing, but I certainly do.

Crap...

[ktakki]

I guess the official Senate Telecommunications Subcommittee web site is out of date. It was only after I posted this that I realized that Sen. Burns (R-MT) lost to John Tester and George "Macaca" Allen (R-VA) lost to James Webb.

Pretty fucking Web 0.9 if you ask me.

k.

Re:The real question

[Jahz]

So, why should there be no royalties for Internet radio when both play the same music? Good job knowing what you're talking about. Internet radio stations already had to pay royalties. This new ruling means they will pay far more expensive royalties. So expensive that it would cost more than terrestrial radio without nearly the same audience or revenue.

From TFA:

[zaydana]

One thing that really surprised me after reading these comments first and then the article, is that stations can't just move to independent music. From TFA:

5. Well... independent music is cool. Why not just play independent music?

This is very important to understand, as lots of people see this as a solution. The statutory webcast license covers ANY copyright music, from the biggest labels, down to the smallest, and even independently-released music. Again, the license covers ANY copyright music. The copyright owner need NOT be part of SoundExchange or the RIAA. The ONLY exceptions to this are (A) direct deals with each and every sound recording copyright owner, (B) copyright owners that are willing to make a blanket "waive" of fees, or (C) non-copyright, public domain music.

I guess that means that this is about more than just the RIAA controlling the industry - its about putting them out of business. Of course, me being an Australian, I understand that they can't really do that because there are many other countries where it costs a bit more to buy yourself a politician.

And just for the record, one of my favorite stations is located in Switzerland anyway.

Re:From TFA:

[NormalVisual]

So why not form a non-profit corporation somewhat similar to SoundExchange, which would act as an intermediary to negotiate webcasting fees with a large number of non-RIAA copyright holders and with a stated charter to work towards the greatest distribution of the participating artists' works? They could have standard contracts for both rights holders and webcasters that would make everything all nice and legal, which given the economy of scale would save money for everyone involved. The individual webcasters could pay a reasonable yearly fee to this organization to fund its activities and to cover royalty payments without getting bogged down in a bunch of paperwork.

petition

[tedivm]

Complain to the government. Write your congressmen and your senators, state and national, and let them know what this means. Then tell your non-geek friends and let them get pissed off too.

Sometimes its hard to believe that companies can get away with things like this, but when it comes to technology most of the country doesn't care enough to come to places like slashdot. Today I was talking to a friend about the evils of DRM, and I mentioned the Sony Rootkit incident and she had never heard of it (and she's not just someone off the street, she's an administrator at a website development/hosting company). If most of the country doesn't know about an issue, its easier to get away with it.

Pandora has a link in their blog to a petition thats been set up, so tell your friends, pass around the link, and use the information on the site to contact your own representatives.

tedivm

That's fair

[grasshoppa]

I've come to the conclusion that there is little I can do to stop the overwhelming tide of corporate interests or otherwise greedy minded individuals who control the world. That is, until even the sheeple of the world get annoyed. I figure that'll be about the time they interfere with american idol in some way or another. Or Grey's Anatomy. Until then, those of us with good intent are going to be continued to get kicked to the curb any time a large corporation with deep pockets want something.

They say real life is nothing like school. They are wrong on one point: The bully still wins. Standing up to the bully gets you little more than a bloody nose and some sympathy.

Not too bright

[AussieVamp2]

Shut down internet radio = make less money, as those people are now paying you zero

Shut down internet radio = people download more songs in copyright infringing manner rather than listen to a net radio stream

Enter Pirate Radio 2.0

[snsr]

Another generation, born from fire.

Yet another incentive

[iminplaya]

To boost anonymity tech to keep the pigs at bay.

Re:The real question

[Percy_Blakeney]

If the objective is to have broadcasting over the Internet, then there is no effective difference and the royalties should be identical.

Great point! You should really mention it to the Copyright Royalty Board, as they have now rejected that line of reasoning twice when it came from the Internet radio stations.

In case you haven't been keeping up with the story, here's the quick summary: Internet radio has to pay two sets of royalties, while traditional radio only pays one. Thanks to the recent ruling by the CRB, that extra royalty that Internet radio pays will skyrocket over the next few years, dealing Internet radio a mortal blow.

And yes, you're right, it makes no sense.

UNRIAA?

[msimm]

I hear a lot of comments along the lines of A) use creative commons B) go off shore c) direct negotiations with artists.

I run a radio program. Both (depending on how many artists you'd like to feature or how often you'd like to update that) are unrealistic.

Assuming independent artist *do* want to be heard (and I'd contend that they do) I think all that's missing to make this a powerful vehicle is any real organization behind it.

Want to bad mouth the RIAA? Create something fucking better. I'd bet with enough exposure a lot of small/mid-sized artists and record labels would love to provide cohesive, clear (protective) rights for some kind of limited/promotional broadcasting.

When I started my radio program I immediately began contacting artists, managers and labels directly. They didn't want to provide carte blanche permission. This is an industry and artists/(managers)/labels get taken advantage of. But they were more then eager to provide limited broadcast rights with proper guidelines that could easily be generalized pretty much across the board.

If we like being lead by the balls by an organization we don't feel is treating us with respect, perfect that's *exactly* what we've got. But if you're fucking tired of this? Show them or stop whining.

Re:The real question

[freemywrld]

The statement that there are no small broadcast radio stations is simply untrue. You seem to have forgotten about the hundreds of small college radio stations, and non-profit community stations. Many of these would not be able to continue to operate if the same fees they are throwing at internet radio were applied to broadcast. Not to mention, many of these stations increase their base by broadcasting both over the air and on the internet. I wonder how these new fees affect stations that do both... are they getting double-screwed?

Couldn't Indie Labels Save Indie Radio?

[popo]

Given internet radio can still function if stations negotiate directly
with the copyright holders (which of course is a whole lot of micro-negotiating) -- a better
solution might be for independent record labels to just include in THEIR contracts with
royalties companies that Internet Radio is "OK by them", and state that they don't want
to collect the same royalties from stations under a certain size.

It seems to me that Indie labels could (and should) give a big thumbs up to Internet radio
and craft their own royalties exceptions.

SomaFM's stations are actually vital to their respective scenes. Its up to the small labels
and artists to stand up and take action now. If Internet radio fails, it will be the artists
fault too.

Re:[sic]?

[mr_matticus]

Well, since English doesn't have polypersonal agreement and the subject of the sentence is "none," the verb should be singular. "None of you has taken out the trash" would be the proper construction of that sentence, and not "none...have." This is the same process that creates "has anyone finished his homework?" and why "has anyone finished their homework?" is malformed for some overly prescriptivist types. Since the OED accepts (and has used for centuries) 'their' as both a singular and plural pronoun (singular when referring to an individual of indeterminate gender; plural when referring to a group possessive), this latter "pluralization" is actually correct. Unfortunately, people see that "anyone...their" is plural and jump to conclusions that any of the "-one" pronouns can be pluralized in sentences. This is not the case.

This is also immediately clear if you look at the word "none"--it's a portmanteau of "no one" or "not one" just like many other English contractions.

An Alternative Scheme

[Reziac]

So what's needed is a *different* agency, to collectively negotiate rights for non-SoundExchange artists.

It occurs to me that an outfit like CDBaby, already set up to pay artists for CDs sold, might serve quite well as a royalties broker for independent artists and songwriters (remember there are two parts to that side of the equation).

Once the base rate has been set (and it could be instantly defined as "just like it was before the new rules") it would be a matter of getting the word out, letting artists trickle in on their own, and creating a central database of music covered by the new "indie royalties agreement". The new royalties agency would take a cut (doubtless much smaller than what the current regime takes -- is it 80%?? anyone know for sure?), and distribute the artists' portions in the same way as they currently distribute artists' portions of CDs sold.

In fact, this could extend to any outfit that's set up for it -- the only hard requirement is that everyone must use the same central database, so all the internet radio stations can know positively, in one step and without having to chase anyone around, what music is covered by the indie-royalties-agreement and therefore free of the usorious new cartel rates.

I did find it interesting that even Clear Channel is on our side -- they're probably the ONLY radio voice loud enough to be heard in Congress. Goes to show that even as entrenched in realspace radio as they are, even Clear Channel recognises that the internet is the future of radio broadcasting -- particularly as station equipment ages out and they find it vastly cheaper to replace transmitters and towers with MP3s and bandwidth.

Re:An Alternative Scheme

[cfulmer]

This is a great idea.

It seems to me, however, that the entire premise behind flat-rate royalties is slowly disintegrating. The original idea was that it's too difficult for each station to contract with each rights-holder. So, a flat rate was set which, while not perfect, at least allowed those transactions to go through. The songs that are played are sampled, and then the royalties are divided among the rights holders according to the sample.

But, on the Internet, why can't you just have a big database tracking every song? The head-end software looks at how many listeners there are, looks up the song in the database and reports to the station "If you want to play this song right now, it will cost you $$$$"? Then, when it gets played, it tracks exactly who is supposed to get what royalties.

This model has a number of benefits: first, it's more accurate: each rights holder gets paid when their music is played. Even the guy whose song is only played to twelve people will get compensated, whereas he never would have made that 'sample' before. And, second, it allows each individual artist to set the rates for their own music -- if you want to give your music out for free, do it. And, third, it would allow low-cost Internet radio to thrive.

No cultural/environmental biases on preferences?

[Mathinker]

That's why the really delicious dog meat those Chinese are eating really makes you salivate, eh?

You (probably) don't really know whether you like the taste of dog meat, or not, do you? It's because the culture of the society in which you live prevents you from having the experience of tasting it. And it also has programmed (at least in most Americans) an automatic response of disgust at the very thought of eating dog meat.

If cultural influences do not affect preferences, how do you explain that almost 100% of Americans wouldn't eat dog meat if given the opportunity, and many (wealthy) Chinese do eat dog meat? This isn't related to the fact that most Americans don't like traditional Indian music? Or even to the fact that my parents don't like the same music that I like?

RIAA, et. al., are trying to do the same, to control what people are exposed to. So people won't understand what they are missing, or even reject it outright if exposed to it after their "RIAA programming" is in place....

Digitally Imported

[muffen]

I listen to www.di.fm all the time, I love their radio, and I am actually afraid what will happen now.
It's so nice getting to listen to the music you like without having to bother about downloading / converting music etc, and I've been a premium member at di.fm for quite some time.

My initial thought is though, can't they move the internet radio servers out of the US, to countries with a bit more sensible laws?

This isn't pirating (you may technically be able to save the streams but it's not trivial and most non-technical people wouldn't bother), this isn't stealing revenue, this isn't hurting anyone... if anything, it should be helping the sale of music. There must be more people than me who have listened to a tune on internet radio and then went and bought it because it was really good.

For all you people in the US, go to DI.FM and do what it says there... help internet radio!!

Even if you're right

[SanityInAnarchy]

Even if you're right (and you're not; see other posters), we shouldn't give up on America, and we shouldn't give up on China.

Because, if nothing else, it'll mean others may simply follow, as they've done before. America still does have some muscle in the international world.

A real shame.

[interstellar_donkey]

Internet radio had such promise, but the medium is getting destroyed just as it started to get off the ground. The recording industry seems to be quite adept at trying to stop anything that would please their customers but damage their industry. Rather then trying to adapt it just tries to kill anything that it perceives as a threat.

Which sort of begs the question "Why do we need the recording industry around anyways?"

About the only thing they do that can be seen as a necessity these days is promotion, and traditional methods of getting bands on your label heard and seen are quickly becoming irrelevant. They pump millions getting their bands airtime on terrestrial radio, a medium that is increasingly pointless (due, in part, to the terrible stuff the record companies are trying to push) They spend huge amounts of money on producing music videos that will never be seen.

At yet none of these things are a necessity for a band to make it. The Internet is a fantastic replacement for these old fashioned practices.

As consumers, we can do our best to purchase independant, non RIAA member labels. For artists, it would be nice to see them stray more and more from signing with major labels and going with one that understands this new market and how to work it.

Rates

[muffen]

For commercial and for larger non-commercial webcasters the judges set a pay-per-play rate of:

$.0008 per play for 2006
$.0011 per play for 2007
$.0014 per play for 2008
$.0018 per play for 2009
$.0019 per play for 2010

Per Play means the following:
Any time ONE listener hears ONE song (or any portion of a song), that's a "performance." If ONE listener hears ten songs, that's TEN performances. If 1000 listeners hear ten songs, that's 10,000 performances.

So what will the internet radio stations have to pay?
Here's a calculation:

$0.0008 X 10,000 listeners X 16 songs/hr. = $128. It'll cost our imaginary webcaster $128 to play one hour of music for 10,000 people.
At the end of the day, that's $3,072 ($128 X 24 hrs./day) -- for just a single day! After a week goes by, it's $21,504 ($3,072 X 7 days/wk.).
And for all of 2006, this webcaster with a steady average audience of 10,000 listeners would owe $1,121,280!! (the $3,072 X 365 days/yr.)

That takes care of 2006. For 2007, the rate increases 37.5%! So, with no audience growth, the cost of streaming music for the year would increase to $1,541,760.
And the royalty rate goes up another 28% in 2008, and another 28% in 2009, topping out at a $.0019 per performance rate in 2010 (resulting in a royalty obligation of $2,663,040 for that same audience averaging 10,000 listeners) for that year.

Information taken from www.savethestreams.org.

You WILL listen to Justin Timberlake DAMMIT!

[smchris]

Well, no I won't.

I really, really hope di.fm can move their servers and do the paperwork in some other country. Most of the music is European anyway, isn't it? It's what I've been been listening to for the last six years and there is no way I CAN GO BACK to four folks drumming and strumming anymore.

Is that what government wanted? That I'll have a credit card charge in EUROS, PESOS or whatever for my music? Good work, geniuses. You've managed to offshore even the intangible.

emusic can be that broker

[javacowboy]

I realize I'm late to the party, and probably won't get modded one way or the other.

emusic could be that broker. They already offer a catalogue of, what, 2 million songs from tons of independent labels? That would be more than enough to supply a number of internet radio stations.

Hopefully, the CEO of emusic has his wits about him and decides to do this.

Re:International

[t0rkm3]

Kind of reminds me of the primary element in "The Rise and Fall of the Great Powers".
In a review of economic and military knowledge of the great empires 1500-2000, the author found that an overly restrictive society forced innovation outside of its borders and thus was left behind in the annals of history.

Sucks to see it in action. The auto-industry(unions), the airline industry(unions), and now the ??AA(union of truly evil bastards) are attempting to close down our society and force innovation abroad. Oh well, it had to end sometime...