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The SoundExchange Billion Dollar Administrative Fee

Posted by Zonk on from the crushing-greed dept.

palewook writes "On June 7th, Yahoo, RealNetworks, Pandora, and Live365 sent letters to US lawmakers emphasizing they owe SoundExchange 'administrative fees' of more than $1 billion dollars a year. These fees would be paid for the 'privilege' of collecting the increased CRB royalties effective July 15th, unless the Internet Radio Equality Act passes Congress. SoundExchange, the non-profit music industry entity, admits the levied charge of $500 per 'channel' is supposed to only cover their administrative costs. Last year, SoundExchange collected a total of $20 million dollars from the Internet radio industry. Under the new 'administrative fee' RealNetworks, which hosted 400,000 unique subscribed channels in 2006, would owe an annual administrative charge of 200 million dollars in addition to the retroactive 2006 rate hike per song played."

3 of 127 comments (clear)

  1. Only Americans will be silenced by Cafe+Alpha · · Score: 5, Insightful

    Cheer up, the rest of the world will still have freedom on the internet. It's just us Americans who will be regulated out of having any expression.

    We'll still be able to listen to Russian stations.

    Where's you're "In Soviet Russia..." joke now, bitches?

  2. Re:I'm so conflicted by LighterShadeOfBlack · · Score: 5, Insightful

    Wait a second here... that means whoever ends up getting screwed, I win. Rock On. No I think a more realistic way of looking at it is "Whoever wins... we lose". This situation is a lot like the AvP movie in other ways too: I can't bear to watch this either.
    --
    Spelling mistakes, grammatical errors, and stupid comments are intentional.
  3. The Fee is Per Channel... by Benedick · · Score: 5, Insightful
    The fact that the fee is per channel gets me thinking. At Pandora, I have two defined channels. Those channels introduce me to new music, new artists, perhaps artists not represented by the RIAA. Think about that.

    If Pandora has ten thousand listeners like me, that's twenty thousand stations times $500 per station is ten million dollars. That's probably enough to kill Pandora and any other customizable channel internet radio site. But if the internet radio site only had say five channels, that's only $2,500, easily affordable by a commercial site.

    My conclusion from this little exercise is that the RIAA is out to kill customizable channels. They don't want you to learn about music on your own. They only want you to listen to whatever the latest pop sensation is. They want to eliminate choice and the extra expense of having so many artists. If they can make it so all you ever hear is the generic artist of the moment, that's all you'll know and all you'll buy.

    This is all about control. RIAA wants to make sure they control not just your access to their artists but your ability to discover new artists not under their contracts. Internet radio is a growing force and a growing threat to their ability to pick what music you buy.

    I can only hope that they have overreached; that the huge amount of money involved here makes their motives visible to Congress. And that Congress cares. That sure makes it sound like a lost cause, doesn't it?