Small Webcasters Offered a Rate Break, Reject It

Pontifex minimus writes "Music royalty collection group SoundExchange has offered an olive branch to small webcasters. They are willing to delay the exorbitant new rates set by the Copyright Royalty Board until 2010 for small webcasters in hopes that they can keep Congress from passing the Internet Radio Equality Act. Larger outfits, like Live365 and Pandora would not be affected and would have to pay the new rates. '"Although the rates revised by the CRB are fair and based on the value of music in the marketplace, there's a sense in the music community and in Congress that small webcasters need more time to develop their businesses," said John Simson, executive director of SoundExchange.' SaveNetRadio rejected SoundExchange's offer, saying that it 'throws large webcasters under the bus.'"

Comments

they know

[wizardforce]

they know it is really bad for internet radio and this is nothing more than a smoke screen- to convince some people that they are actually trying to be fair which is absolute nonsense. if they wanted to be fair they wouldnt have done this to internet radio or started this garbage against "radio" radio either. now lets hope that they actually destroy themselves in the attempt.

Translation

[rlp]

"Nice Internet radio station ya got here. Maybe we'll take a smaller cut from youse ... to start with. Right, Rocko?"

Per-play royalty on singles?

[joe_adk]

This is probably a stupid suggestion for many reasons but:

What if, in order to release a single, studios (et al) had to give up broadcast rights to that song. Anyone who obtains a legitimate copy of the song can broadcast it whenever and however he/she likes, be that internet, radio or birthday party. The label/artist/whomever still controls all rights to sell/distribute the song, and the rest of the songs on the album that aren't marked as singles.
I know this clashes with the "make money from every angle" that the industry wants, but it seems like a reasonable trade (to me).

can internet radio play free music?

[razpones]

I mean there is music that is independent from corporations, is there a restriction to this music, like a tax or something that anyone has to pay to transmit either on the air or on line?, also what about music made in other countries that is not bought by American corporations?, this should be the way to do radio, just skip the music that is owned by the conglomerates and go to the source, the artists. Most bands are lame anyway, and even thought i do like some dj's and some hiphop i would give it up. I had hoped to put my own internet radio station but since i started hearing all this issues it made me wait and see what comes out of it, then i thought about air waves radio (ala pirate), but that is pretty hairy, so i think the way to go is find good free music and use that, with the consent of the artists i imagine.

Re:can internet radio play free music?

[MP3Chuck]

I was going to write something up, but this comment on a previous discussion regarding SoundExchange seems accurate.

Re:can internet radio play free music?

[iminplaya]

so what are we all waiting for?

Godot

Re:can internet radio play free music?

[i1984]

So what we need is a largely automatic system for generating direct, explicit, licenses between artists and broadcasters (aka Internet radio stations) so that a single artist can form hundreds or thousands of unique relationships with stations without spending years drafting contracts, and vice versa. It can't be an aggregation service in the SoundExchange sense because SoundExchange bans that, so it would have to instead create the documents to generate a direct contract and then facilitate the signing and exchange of those contract documents.

Maybe it would work by allowing a broadcaster to search the site for artists that are willing to offer their music under certain terms, select those of interest, copy the broadcaster's specific information in to a form pre-filled with the terms, have the broadcaster digitally sign the contract (if I recall correctly Clinton signed a bill making a digital signature legally binding the same way as an old fashioned analog signature is binding) and then submit the contract to the artists who could log in and review the contract and sign it or not...or perhaps digitally sign all of them at once, or all of them with particular terms at once. Then once the contracts were signed a PDF would be generated and given to each party to print out and file.

There would, of course, also be a mechanism for either party to amend the terms of the boiler plate contract, although doing so would flag the contract as one needing special attention.

A clever extension of this would allow the artist to upload his/her music to the contract generation site so that as soon as the broadcaster signed the contract it could buy copies of the artists tracks and download them immediately.

Creative Commons licenses sound good at first, but no actual signed contract explicitly changes hands. The above system would solve that problem without being an aggregator itself; it merely facilitates the two parties reaching an explicit signed agreement.

Finally the good part: SoundExchange would have to keep track of all of these exceptions to the statutory licensing.

A rhetorical question

[ShooterNeo]

So, if band X is played on an internet radio station, will the royalties from that performance actually GO to that band? Or vanish into the black hole of "soundexchange", with a pittance going to the actual creator of the song?

Show me the money...

[helmespc]

Where does the RIAA think the money is going to come from. Its not like web radio is making money hand over fist. Even the best web radio stations are struggling to survive under the current conditions, much less their future ridiculous rates.

Re:Show me the money...

[Matt Perry]

Where does the RIAA think the money is going to come from. Its not like web radio is making money hand over fist. Even the best web radio stations are struggling to survive under the current conditions, much less their future ridiculous rates.

It's not about the money, it's about the market. Driving independent radio stations out of business is the entire reason for this mess in the first place. The mainstream music industry is desperately trying to retain control over not only their business model but their methods of marketing and promotion of their musical interests. They pretty much have over-the-air radio marketing only their products; however, online radio provides more choice and allows listeners to explore different genres and artists. Sites like Last.fm and Pandora present even more of a threat because they allow listeners to directly control what they are exposed to and direct their own musical exploration, unlike regular streaming radio which spoon feeds you whatever they have (not that I dislike anything somafm spoonfeeds me). All of this means you're probably going to be listening to music that's not from the major labels, or at least exposed to a lot of independent music. If you buy someone else's product then the big music industry thinks that they've "lost a sale."

The barrier to entry for recording and publishing music is incredibly low right now. This means that the number of competitors to the big music industry is increasing at a very rapid rate. How does a company, or group of companies, compete when the market they have dominated suddenly has thousands and thousands of competitors with the ability to deliver their product just via the same methods as the big companies? Worse, how do you compete against those who are willing to create products and give them away? Smart companies will see the trend and will ask themselves, "how can I make this work for me?" The big music industry isn't sure how to compete and so they are fighting the trend and lashing out any way they can.

someone explain something to me...

[pjr.cc]

How does SoundExchange force people to pay royalties?

There was an article some time ago that ALL internet radio stations, regardless of content, had to pay SE on a per-song basis. I really don't understand how they have the power or the right to do something like that?

For example if I setup a radio station that played only freely-available, royalty-less music. How does SE get away with charging me money to play said music? Is the RIAA that powerful that they can manage to dictate legislation that way? have i missed something obvious?

What I would be curious to know is, if I wrote a computer program that generated random music (lets ignore the technical feasibility of that and assume its possible) and make a radio station that played that (and only that) could SE force me to pay them royalties? If that is the case, how is that even in the most bizarre parallel universe either fair or just?

Perhaps even a simpler argument was if i were an artist and ran an internet radio station solely playing my own music, can SE force me to pay them royalties? It just seems really stupid to me...

Re:someone explain something to me...

[cpt kangarooski]

There are two kinds of distinct creative work involved with music. The first is the music itself, i.e. the arrangement of notes and/or lyrics. The other is a sound recording of a particular performance of that music, e.g. a tape recording. Music has long been copyrightable, and usually this applied to the sheet music. A recording of a musician performing that music wasn't copyrightable in itself. Congress decided to grant copyrights for sound recordings in the 70's. However, they limited that copyright so that it didn't apply to the radio: a radio station was free to play a sound recording over the air, and pay royalties to the songwriter, but not to the performer. This is still the case, in fact. But much more recently, Congress decided to grant a copyright in the sound recording that applied to digital transmissions. This meant that now, unlike for terrestrial radio, things like Internet radio would have to pay a royalty not just to the songwriter, but also to the performer.

As is the case for music, the royalty is under a statutory license. That is, rather than have everyone suffer the huge headaches and transactional costs of negotiating rights for each piece of music individually, everyone can pay a fee set forth by law and get a license automatically, regardless even of whether the copyright holder agrees. (Because his copyright doesn't apply to people who pay the statutory license; that's how the law is written) Everyone is free to make their own arrangements, but in practice few bother to do so since it is really a huge pain in the ass.

The Copyright Office was empowered to perform certain administrative tasks related to this, and one thing that was done was to name designated agents to whom the statutory license royalty can be paid so that the payor will be in compliance with the law. Currently, the only one is SoundExchange.

If you have a separate agreement with the relevant copyright holders, you don't need to pay SoundExchange. If you are playing a recording to which you are the copyright holder, or a recording which is in the public domain, you don't need to pay SoundExchange.

Is the RIAA that powerful that they can manage to dictate legislation that way?

Yes. The industries involved in copyright matters have been dictating legislation from the beginning of the 20th century on. This is nothing new.

Re:SoundXchange needs sound leadership

[bobo mahoney]

You don't think they have the best intersts of the small guy in mind? I thought that all the big corp's had a softspot in their heart for the little guys. I also think that the sky is a beautiful shade of green.

Broadcast

[JackSpratts]

they shouldn't be paying a penny more than the terrestrial stations, which has always been a simple composition mechanical.

soundexchange's first round of performance royalties in june '02 killed some 40,000 bedroom broadcasters overnight.

2010's next round will simply finish off the rest.

- js.

Re:Pity peoples families are at stake

[damista]

Sorry but I don't go out and buy music, so somebody else has food on the table. If I buy something then I do that with my own interest in mind and nobody elses (unless it is charitable). If the music industry wants me to buy their stuff, then they should stop selling CDs with root kits, CDs that don't work in half the players, music files that will only run on one platform and they should stop telling me that I am a potential criminal because I am asking for these things. Until they do, they won't see a cent from me and I used to spend a grand or more a year on CDs. If me not buying music means that somebody will starve, then so be it.

Sorry that may sound harsh but that's how it is. If my employer goes bust because nobody wants our services anymore, then I lose my job. Do you think there's people out there who say: "Let's go to these guys, cos their employees starve"? Not buying their products is the only way we can fight back and stand up for our rights.

Retroactive rates

[Raptoer]

Even worse, this article doesn't mention if the retroactive rates still apply to the original date, making the delay pointless. So who knows, the delay may be a trick.

Raw Deal For Artists Too.

[twitter]

Sound Exchange will also forbid free and lower cost competition, regardless of artist and publisher intention. They will collect their little fees from everyone, in violation of Creative Commons terms. Those who want their royalties will have to join them, which makes it look like they have the artist's endorsement. Then they will have to trust Sound Exchange to give them what was really collected, less fees. In other words, the RIAA monopoly on music distribution will be extended into the future against the will of artists and the public. There is no technical justification for this, it's pure corruption.

Re:Raw Deal For Artists Too.

[mindwar23]

The statutory license does not exclude directly negotiated licensing deals as I understand it. No one can forbid direct licensing deals--the right to engage in these kinds of agreements cannot be circumvented by Congress or anyone else. In other words services are free to use Creative Commons licensed material or material under any other license or agreement. If a service exclusively uses such material, it certainly seems that they would be exempt from SoundExchange fees and reporting. If only some of their content falls into this royalty-free category, then what's to stop them from excluding that portion from their SoundExchange reporting? SoundExchange cannot collect fees on directly licensed material, only that which is used under the statutory license...

There are two alternatives to this regime: either artists and copyright owners don't get paid, or they get paid directly by the streaming services. I don't think the streaming services want to be in the business of trying to find all these guys. I recognize that SoundExchange may not be completely worthy of your trust in providing royalties, but there is no other organization that is geared toward paying performing artists and sound recording copyright owners the money that Congress indicated that they are entitled to under the statutory license. So either webcasters have the choice of going with the existing royatly structure, or they can put together their own negotiated system, which may be a good thing, but that process won't be free either...

Re:Raw Deal For Artists Too.

[zippthorne]

"Then they will have to trust Sound Exchange to give them what was really collected, less fees"

Ok, that's really a raw deal. If SE can just start collecing fees on their behalf without the artists consent, and thereby force the artist's consent, they don't really have a right to the fees. (moral right, i mean, legal rights are screwy)

If the artists are getting fees subtracted, they're already getting screwed, blatantly. In addition to the unspoken usurpation issue.

I mean, imagine this conversation with a coworker,
"Oh, hey, I picked up your paycheck for you."
"Um.. thanks..That explains why it wasn't there when I went to pick it up."
"No problem. Here's what's left after my 'picking up fee'"

Worse than you imagine.

[twitter]

No free alternatives are allowed. It is obvious that people would flock away from these fees if they could, so they won't be given the chance. This will be enforced the same way the current ban on terrestrial broadcast is enforced. Because internet broadcasts are not carried over a limited publicly owned spectrum, there is no technical justification for this system, it's purely anti-competitive - designed to perpetuate the RIAA member companies into the future when they would naturally die off.

The scorpion and the frog

[Simonetta]

This is a case of scorpion and frog. You know, the scorpion needed to cross the river. He asks the frog to carry him. Frog says no, 'cause you'll kill me. Scorpion says 'why would I do that? I'd drown. Let's be friends. Frog gets halfway across, scorpion stings him. As they both die, frog asks why. Scorpion says 'because I'm a scorpion, this is what I do'.

    The global music media corporations know that all the fighting new technology and RIAA extortion is not in their best interest. But they can't help it. It's what they do. They're on auto-pilot self-destruct. They're smart guys, they know this. They just can't do anything about it.

      Their entire perspective is based on the not-unrealistic assumption that they are the focal point of the best music in the world. The best groups, the most talented artists have and will continue to come to them in order to distribute the recordings. They don't believe that anyone interested in a musical career would not come to them, on their terms. That's the key to their entire 'take it or leave it' approach. Because they honestly believe that no one will leave it.

      What may happen is a transformation of media from a centralized distribution to a scattered and disorganized collection of xenophobic subcultures who aren't interested in sharing their music or media works. Should this happen, the media corporations most likely won't notice it. They sell primarily to young people and the percentage of people who are young is rapidly growing. So their market is growing. The fact that their sales of CDs are stagnant is truly amazing. Most likely, it's not true.

      I encourage people to gradually disassociate themselves from the products of the global media corporations. Yes, it is true that you will miss great music. You will suffer the occasional social embarrassment of not knowing (actually not knowing, not pretending to not know) who the latest stars are. I'm not going to claim that it's worth it or a self-righteous thing to do. I'm just suggesting, all the celebrity media, let it slide away. There are other things more important. Concentrate on them instead.

Erhm - who cares

[passthecrackpipe]

Seriously - they want to charge Radio stations for royalties? great, let them. They want to price Internet radio into oblivion? Great, let them. Radio, whatever the transmission medium, is advertisement. Both for the ads in between the music, as well as for the music itself. The knock-on effect effect of these moves will be disastrous for the music industry in the longer term. They will get what they deserve - music sales will be further down, and the RIAA crpwd will be looking for a new job. Like, how to charge people for the air they breathe

This is what they call an offer?

[rantingkitten]

Before I started my own darkwave radio station (plug!) via shoutcast, I ran my station off live365. They made it easy, offered a pretty decent rate, and for the price I paid they handled the royalty issues, I had a fairly certain guaranteed uptime, and playlist management was easy. In return all I had to do was make sure all my songs were precisely and accurately ID3 encoded -- so that live365 could host ads and links for the artists I was spinning.

Sounds great for everyone, you ask me...I get to play music I love, people get to hear music they may never hear outside the drunken haze of a goth club, and the artists get free exposure, along with links and ads to their music if you wanted to buy it.

I know this model works because I was (and am) a live365 subscriber for years, and have bought at least two dozen albums based solely on the music I heard on particular stations, music to which I would not otherwise have been exposed. In fact, rips of those albums are a large part of what I spin today on my own station.

And as for that, today, with mirrorshades radio, I have artists sending me music asking to get put into rotation, and listeners, writing to tell me how great this track or that was and that they just grabbed it off iTunes. I know at least one guy who went to the VNV Nation concert here in Atlanta after hearing them on my station -- he'd never heard them before, and what's that mean for VNV Nation? A ticket sale they wouldn't have otherwise had, not to mention whatever swag he probably bought while he was there.

Artists get increased exposure and sales. Listeners get music and choice. I (and my fellow broadcasters) get to play to whatever niche market we choose. Everyone gains, and no one loses, except for the RIAA, hawking their antiquated and outmoded business model.

I've said it before but I'll say it again -- there ain't no Benjamens in the net radio trade. We broadcast for love of the music and artists enjoy the exposure. I was lucky enough to get free hosting for my stream, allowing me a great deal of versatility, but many small broadcasters turn to live365 and similar hosts for cheap, reliable broadcasts, for which they pay their dues and offer free advertising in exchange.

If the majority of people who use live365 as their broadcast platform could afford the rates that soundexchange is demanding, they wouldn't be on live365 to begin with -- they'd have their own dedicated servers with no ads and listeners limited only by bandwidth. As is so often the case, the Big Guys are beating up on the only segment of the population that can't defend themselves.

Stop treading on us, and let the music play.