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RIAA and Net Radio Broadcasters Reach Agreement
An anonymous reader writes "The RIAA and internet web broadcasters have reached a royalty agreement. Instead of facing massive increases per song played, they will be generally charged 10.5% of their yearly revenue."
...it's also a sign that the RIAA knows it is outdated and is only grasping at the few straws remaining.
If you're thinking of starting a business venture, there are two words for you: supply and demand.
No amount of laws or regulations can overcome supply and demand in the long run. The RIAA relied on preferential laws and regulations to maintain their control over distribution. Recorded music has a near-infinite supply in terms of distribution online. Hence the price of it should fall to nearly zero (yes, some people who see value in compensating the artist will never believe the price should be zero).
The RIAA is screwed, no matter how you look at it. Most monopolistic corporation unions who rely on legislation and not on supply and demand are just as screwed.
What about the radios that don't make any profit?
I am specifically thinking of SOMA FM and WCPE. I know that WCPE is a non-profit, for instance, and they are two of the best radios I know.
Are these exempted or not? Does anyone know?
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Perhaps if there were some mention of what broadcast radio stations were paying for their tithe or per-song charges we could make a reasonable comparison. Somehow I doubt that all-talk/mostly-talk broadcast stations are paying 10% of revenues in tribute.
No folly is more costly than the folly of intolerant idealism. - Winston Churchill
Let's all hope this keeps Pandora on the air.
There will always be a segment of the population who wants to produce music simply for the fun of it. But they still need to eat.
If there's no income in music, it'll end up strictly a hobby-level endeavor. While a lot of decent stuff can come out of that, wouldn't it be better if the highly-talented musicians could focus more on their art by not having to also have a day job? (Yes I know about the current injustices in the system, but swinging it 100% the other way isn't the answer either.)
Without money in general music, the best musicians will end up producing work for advertisers since that'll be the only source of regular paying employment that uses their talents. Are you sure that's where you want the music industry to be going?
We've all heard about RIAA tricks to scam the artists out of their fair share. Like taking a percentage of revenues for 'breakage' based on the rates of vinyl records breaking in shipping even though CDs are much more sturdy and MP3 downloads are impervious.
So I suggest the radio stations change their business models to run revenue-free. Like becoming an ancilliary service that does not generate revenue under normal conditions - like you can pay a fee so outrageous for the radio service that no one in their right mind will pay it, or you can get it 'free' as part of membership (paid or advertising-supported, or some other scheme) with some other web-site or service provider. Let the free-radio and the revenue-generating service be subsidiaries of the same parent company and you are all set.
Of course I am writing this without actually reading the details of the contracts - those MAFIAA lawyers are really good at putting together contracts that fuck the other guy in novel and unexpected ways, so anybody trying to fuck them back needs to pay real close attention to the details.
Profit motive is a fascinating thing. It's not in the RIAA's best interest for web radio stations to go offline, because they generate no money from web radio that way. Whatever they charge is going to be the highest possible without alienating their customer base, which is the web broadcasters. It took them long enough to finally admit that their pricing was extraordinary to say the least.
I do find it fascinating that the major labels, via "Independent promotors" actually pay radio stations to broadcast specific songs, whereas they do no such thing for web radio services. I would think that something like the web radio in iTunes would be a perfect target for this.
Burn Hollywood Burn
Is that their monthly fee?
I read TFA and something is seeming strange to me.
You pay 10.5% of all revenue to the MAFIAA. Does that mean that they're waiving the current royalties? Or is this tax in addition to the old royalty rate?
If this is all they pay does that mean I can:
* Stream RIAA music all I want if I don't make any money?
* Broadcast it DRM free?
* Get from the RIAA their music to play?
Clearly I'm missing something big somewhere, 'cause there's no way the RIAA would allow that chain of events.
93rd rule of Slashdot: No matter how obvious my sarcasm is, my comment will be taken seriously by someone.
Sorry for posting as AC but I just would like to point out that this agreement is only for On-Demand services and not pre-programmed web radio services (which most web radio stations are).
So for most stations this does not change anything and the insane royalty rates that threatens the whole web radio industry is still very much in place.
"Non-profit organisation" does not mean the organisation makes no profit. It means the organisation puts the money back into itself rather than paying out dividends etc. It doesn't mean they operate at a loss and require constant donations to remain functional.
Some "non-profits" have even been run with the purpose of making its directors etc richer (eg they just jack up their salaries).
========
CINC, 4th Penguin Legion
Netradio is ok, personally i prefer to use an AM/FM Stereo Receiver for music. (PC plugged in to the aux in)
http://imagebin.org/27185
What the RIAA is doing amounts to extortion, the sooner the MPAA/RIAA dies and the copywrite gets reigned in to sane levels the better this will all be...
Politics is Treachery, Religion is Brainwashing
TFA is vague but it sounds like there's no meaningful way for an artist to have these fees waived and, to top it off, those non-member artists aren't going to get any money from it anyway. Sounds like a great way to prop up the 'ole cartel.
10.5%?!? But GOD only gets 10%?!? The RIAA out-tithed the Holy Tither!
I contend that we are both atheists. I just believe in one fewer god than you do.
... a "vig"?
Pay your vig, you get protection. Don't pay your vig, we break your kneecaps and destroy your place of business.
"Congratulations, Boots. Your robot has become self-aware. You're a daddy now." -- Dr. Rho Bowman
Since that has a revenue of zero.
Thanks RIAA, we knew you had a heart in there somewhere. ;-)
Seriously. RIAA is acting like a mafia. Asking for a flat cut as protection money. Civilized extortion.
Eclipse PDE and Me
It's the RIAATithe©.
Some days it's just not worth
chewing through my restraints.
He's spot-on. This agreement only covers services such as Imeem, Last.fm, and Napster, which are based on streaming individual songs. It does not cover services such as Pandora, AOL Radio, or Digitally Imported, which stream pre-programed/tailored stations like a meatspace radio station does. Those guys are still fighting to avoid having to pay the massive $0.0019/user/song that the Copyright Royalty Board passed down last year. Generally when people are talking about internet radio they are talking about these services, so internet radio is not saved.
So's like we're good businessmen types - we ain't like typical thugs - ya know - we ain't no fuckin Tony Soprano - we can set this up all business like. So's whats you gotta do is dis: give us 10% of what you make right off da top. No shit motherfucker. 10%. Right now. Don't like it? Prepare to get FUCKED, cuz we WILL FUCK YOU UP. Ya got dat, fucker?
Good - so we expect our checks to come rollin' in at the top of the month. Got that? If yer late, or stop payin', yer fucked, and we WILL come after ya, you stupid little fuck. GOT THAT? Good. Now run along and make us some money, fucker."
RS
Shoes for Industry. Shoes for the Dead.
This is much better than the last deal, but I can't help but wonder if the RIAA slipped something behind our backs.
Wow, had no idea they paid so little. Now only have to pay 10.5% of revenue, making money from other peoples IP never seemed so tempting.
Yup. And that isn't bad.
There are only so many "really worthwhile" musicians. But the lure of the Big Paycheck ensures that a lot of crap is there.
All Saints, for example.
Sound good on CD.
Heard them once on ToTP once live. ONLY ONE of them could sing.
But that didn't matter to their label, they LOOKED good. Musical talent was a far lower priority.
So less talent pushing for stardom is better.
No revenue, in fact. So it's a net loss (the £30 pcm fee for internet access).
10.5% of nil is nil.
So why sue for $220,000 for 24 songs because of a loss of $0?
1- habit
2- expenses
3- trying to break even
4- Goverment help
5- ???
6- profits!!!
To lazy to google it, but there have been several breakdowns of the costs a label charges to the artist to account for the difference between the price of a CD and the amount the artist gets paid.
Basically 10.5% of the sale price is just penauts. I am willing to bet quite a few RIAA execs choked on that before they could finally sign the agreement.
In other industries, it would be a lot. In music, it is childsplay.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
Really if you want to stop the RIAA you need to start posting hate on the companies that support it. Once you start to hurt their brands and people stop buying their products because of the negative press, and the RIAA will cease to exist. Everyone hates the RIAA, but no one hates those who fund it yet. So hate on these companies.
...
SONY
WARNER
EMI
UNIVERSAL
radio, internet or old-school, should be free to play whatever it wants whenever. we the consumers have the ability to switch the station or turn it off. music providers (musicians, composers, and labels) make money off the successful marketing of their works. so why should they be paid by radio stations to market their work? where the hell would the labels be if radio only played the works of Indie artist who said to Hell with the old way of running radio (kickbacks, pay for play, etc)
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
I don't personally have any involvement with the music industry apart from being an avid music fan who buys lots of CDs.
But I've never understood this idea that a radio station pays for broadcasting rights when, surely, they must be generating more music sales as listeners go & buy the music they hear on the radio.
And for the RIAA to now step in and say that they're just going to take a percentage of profits smacks more of a Mafia-like protection racket rather than something that will go to the artists.
Gentoo Linux - another day, another USE flag.
How much of that will go to artists? apparently none since no one is keeping track of the artists whose music is played.
Nope, this is more payola. Fat Tony wants 10.5% of the take for your continued ability to play music without issue.
Notice, it says 10.5% of the yearly revenue. Not yearly profit.
Yep, this is bad for artists and bad for consumers and bad for everyone except the RIAAfia
They're using their grammar skills there.
Griaad (pronounced greed)
:-noun
excessive or rapacious desire, esp. for music creators, broadcasters and listeners wealth and/or possessions.
Has there ever been income in music production for artists (unless your album/cd goes gold)? I thought that artists make money with merchandise sales and licensing.
There are milions of excellent bands trying to make it out there. Most can't get airtime because the RIAA also have control over radio stations and their playlists, so will only allow their own manufactured poptastic crap to get any airtime.
If I was an internet radio station I'd tell the RIAA to go screw themselves and that _they_ should be paying _me_ for airing (read: advertising) their music. I would only play music from independent bands and musicians who haven't signed up with RIAA-linked labels so the RIAA have no legal recourse to do anything.
The bands themselves would probably more than welcome the opportunity to get some free airtime/plugs for their music and maybe sell a few CDs or downloads through the site.
You missed that it's 10.5% of *revenue*, not of profits.
In other words, 98% of Internet radios will still be forced to close, since typically most stations have some small reveneue (often from donations) that balances their small expenses and results in zero profit. Now they'll no longer balance, so it's end of story unless they find new commercial income, which is not where most stations are at, ie. they're not businesses.
I wonder if this applies to things like college radio stations. Back in school our radio station (long banned by the FCC) operated an internet stream. The radio station itself garnered no revenue (and was of dubious legality), and thus wouldn't be subject to the 10.5% fee; but I wouldn't put it past the RIAA to argue that some portion of our tuition acted as the station's "revenue"
You know, back in the day record labels paid the DJ to play their songs (and it caused scandals). Funny how things reverse like that.
For webcasters, the bad news is the RIAA is taking 10.5% of their revenue. The good news is that they've got the MPAA's accountants to do their books...
It's only expensive if you buy the top brands, but then that's no different to any hobby, say photography.
In fact, quality music gear is significantly cheaper than quality photographic gear because in photography there's a quantum step up in price when you go from compacts to DSLRs, because DSLRs are regarded as prestige gear, irrespective of brand.
That doesn't happen with musician's gear. The ranges are very continuous with gear at all price points, all the way down to pocket money pricing and all the way up to megastudio pricing. You can pick up brand new instruments of all kinds that do a great job for under $100, and perfectly serviceable MIDI interfaces and keyboards for $25, even though you won't be boasting about their prestige value. There are literally hundreds of free synth and mastering packages packages on the net, and thousands of free virtual instruments that work even with lowly computers. And burning CDs to chuck around your friends costs virtually nothing.
So, "making music is expensive" is a total lie. Unless of course you demand to use a $25,000 mixing desk and $5,000 guitars and $10,000 mikes etc --- but then that's not making music that is expensive, it's YOU that's expensive.
Music of a quality unimagined back in the days of the Beetles can be made today in a home studio costing $100 if you are careful and diligent with your money and use eBay, or $200 if you are still careful but buy only new equipment. And if you have a few musical friends and scrounge around a little, I bet a mere $50 would set you up well enough to get started.
Vinnie and da boyse down da street will charge you 300% interest for a week's use of "their" money. The RIAA looks positively civic-minded with this victory!
So, the record label is entitled to 10% of the total yearly revenue of the station for playing songs they distribute, but the artist who actually created those songs still isn't entitled to 10% of the revenue his songs generate.
Darth --
Nil Mortifi, Sine Lucre
What about non-RIAA music being played on net radio?
So now that the royalties for non-RIAA music are more expensive than paying this fee, non-RIAA music will never be played online again?
This sounds like a perfectly reasonable "license" fee to me. Now before you go off squawking, consider this:
If you developed a video game, and you licensed a big name sports franchise to base the game on, you'd pay a hefty UP FRONT fee, and then a % of each sale on top.
BUT first, the publisher pays a distributor for distributing the game to various stores. Each store then takes a cut off the sale of each game.
At the end of the day, the publisher has paid percentages to a variety of people which add up to MUCH more than just 10 or so % (typically, the publisher ends up retaining just 40 to 60% of the game's sticker price).
Is the RIAA requiring an up front fee? What's 10.5% of revenue really when your entire business relies on streaming their content? And if revenues are Zero then what have you lost?
I'm against ridiculous licensing fees, and this for once seems to fall more in line with licensing practices in other industries.
So there's no future for reclusive musicians who make brilliant recordings? What about recordings of symphonies who are too large to tour? What about bands who appeal to niche audiences and only have 30 fans in any major city, making touring unprofitable? And there's no future for movies, which exist only as digital artifacts?
No, The Future will only accept Touring Road Show Bands. All other content producers will be cast aside. Hooray for The Future!
Personally, I'd prefer a future where people who like listening to recordings voluntarily support the making of those recordings . But maybe I'm stuck in the past.
What I hear from people who should know is that the original article is mistaken. This report from David Oxenford seems pretty clear :
Settlement Reached on Certain Aspects of Section 115 Royalty - Contrary to Press Reports, This Has Nothing to Do With Internet Radio Royalty Dispute
The music industry would prefer to be in control these days. Allow me to explain a bit.
Back In The Day(tm), you had bands with enormous talent. Let's pick Led Zeppelin as an example. Please - no flames or debate on my choice of band. I've picked them for a reason, so bear with me.
They were pretty revolutionary. Fantastically talented and ahead of their time. It's been almost thirty years and you can still hear them on the radio.
And the stories on how they behaved were equally legendary. They'd blow into town, rent entire floors of hotels and absolutely trash them. Their post-gig parties were the stuff of legend. Once the dust had settled they'd simply pass it off to their label. "Deal with it." And if anyone complained it was "Fuck you - we're Led Zeppelin. You can't replace us, and you know it."
So they flaunted that. Most bands of the era did, but they were famous. Their partying habits were closer to acts of nature. I'm sure at the time you if you were a hotel owner you could buy Led Zeppelin insurance. At a premium.
So understandably, the labels got sick of this. That's why music is the way it is today.
Look at what's popular. Rap and bands like the one you mentioned. And what do they have in common? More style than talent. Why? Talent is rare. Style can be manufactured. Music stopped becoming something special that only a gifted few could do well, and became a product. Something you could buy in a shrink wrapped box. And replaced just as easily.
Bands today could not get away with Led Zeppelin-esque excess. Let All Saints try that crap with their label, just once. "Fuck you, we're All Saints. Just try and replace us." Every single person in the band will be working in a 7-11 the next Monday, with a bill for the damages.
This is beneficial to the labels, of course. But the problem is that the special spark that makes truly great music is systematically removed from the system in an attempt to make everything easily replaceable. Nobody stands out anymore. They can't, by definition. Anyone irreplaceable is too much potential trouble. They want mediocrity. Polish it up a little bit so it sells, and receive maximum benefit with minimum hassle.
The downside is that you will never hear truly great and innovative music ever again. At least from the big labels, anyways. It would be like being able to buy a really excellent coq au vin at McDonalds. The business model of bulk production and speedy turnaround simply forbids it.
Weaselmancer
rediculous.
I just wasted my mod points for this article on a dumb joke, but the above post is on target. The idea that the RIAA is necessary for artists is a myth. Sure, for those who make multi-millions the RIAA is great, probably essential -- their stranglehold on distribution (which still exists despite ten+ years of downloading), their suppression of competition, and their predatory marketing strategies -- these things can turn mediocre artists into household names. And they are expensive -- an independent label can't compete, and in spite of a few myspace stars we are still far from the day when we see artists gaining superstardom from the internet alone. That day is probably coming eventually, but the RIAA has been doing everything they can over the past decade to forestall it. But who says we need multimillion dollar acts anyway?
"You knew this would happen, didn't you?"
The cost of that cleanup, of course, will be borne by taxpayers, not industry.
generating more music sales as listeners go & buy the music they hear on the radio.
RIAA dinosaur: "Listeners don't buy music they hear on the radio; they're always taping it with those new cassette tapes; cassette tapes should be illegal."
.
Gordon Lightfoot is a national treasure.
It would be a criminal waste of resources to discard such a talent simply because he can no longer meet the physical demands the geek would impose on him.
RIAA: "waaaa give us money waaaa, sue sue sue"
This just gets funnier and funnier.
I haven't bought a CD since 2000, and I rarely listen to radio, so I could care less. Screw RIAA.
Remember the great-old-days of Rock and Roll where music played backwards had such strong subliminal messages that it 'caused' kids to commit suicide? Net Radio Broadcasters should take the idea and make it work to everyone's advantage. Play some 10-minute long in-house made mixes every few hours which so there are royalties to pay. When you play the music backwards, a subliminal message says something like "The RIAA will self-destruct in 30 seconds". If played enough times it should work quite quickly. Even quicker when the senior RIAA staff hear it and shut down the RIAA the next day.
Profit is not the same as revenue.
There are lots of non-profit companies with CEOs pulling in about a million a year.
I don't know whether expenses can be designated as negative revenue, so you can send RIAA a bill at the end of the year.
I find it interesting that their new model is that we tithe to them. That says something about who they think they are, and who they think we are.
+1 sad but true
Sancho, thanks for your insight. Of course we don't play crappy old songs, they've been filtered out and all that's left is the greatest hits of yesteryear. The new stuff still needs to be tried out and so us old-timers are tempted to declare there's no talent anymore. There are some industry factors, such as corporate ASSets (oops, what's with my caps lock!) working for the labels that spend more money developing litigation rather than talent, but decade for decade, there's actually an increase in talent inasmuch as there's more artists with all the old influences plus new instruments, styles, and technologies.
This applies only to groups represented by the RIAA, et. al correct? So if an indie band comes along, those royalties don't apply?
Sounds like a plan to me. Sell RIAA crap and Indie music on the same site. RIAA stuff costs 21% more. Double the royalty rate paid out because you have to give them 10.5% and also contend with the paperwork for their bullshit. Indies don't require that, so you don't incur the costs and can charge less.
Break it out in the cost of the song when checking out of the site. Make it plain and simple to any fan out there WHY they're paying more. Wanna bet where people go with their scarce entertainment dollars?
You are leaving out an important factor, the power of the copyright holder. Without changes to copyright law, we'll be forever be stuck with special interests like the RIAA.
Essentially, a copyright isn't enforceable by any common law or common sense notion. It is a grant of fiat by the courts of the land, established by laws, not of nature or common sense, but by lawmakers who have been convinced that it is necessary for our society, but which right is neither inalienable nor sustainable by the market. The publishers, including RIAA have a heavy handed lobby by which they get a corrupt congress to grant this unnatural monopoly. Somehow, we've become convinced that (C) can actually prevent us from copying or using something which we've purchased.
But fine, copyrights are supposedly useful to fuel the incentive for artists to keep on producing (I guess we didn't have any artists before the establishment of the US Patent and Copyright Office - tell that to Leonardo di Vinci or Vincent van Gough). At one time, the cost of reproducing a work of art was all that was needed to establish the artists' realm, but now we have this artificial barrier. Of course, during the last century, it was discovered that the copyright monopoly had the reverse effect, that without advertising a work, it wouldn't be purchased. Thus, in spite of early fears of broadcast radio, it turned out that if songs weren't played, the vinyl versions wouldn't be purchased. If clips of books didn't show up in reviews, people would buy the hardback. So, Congress tweeked the code to allow what is called the "compulsory license" and "Fair Use". This is what allows cable and radio operators to mechanically reproduce works and educational/editorial organizations to quote large portions of text. The networks can play movies and music and pay a small royalty and an artist cannot prohibit it as long as they pay the royalty to the USP&C office. Schools and the press can re-produce large passages from books.
Bottom line, RIAA OWNS the rights to play and reproduction and because Web Broadcasters aren't recognized as radio stations or cable operators by the USP&C office, they have no legislated Compulsory Licensing scheme. Sooner or later, RIAA will be begging for playback over the net, but for the time being, their current crop of lawyers (their only corporate ASSets - sorry, damn CAPS LOCK keeps sticking) will be fighting to limit play and distribution. If in the 1990s, the RIAA member corporations had hired Stanford MBAs instead of Harvard JDs, we'd have a much different environment today, enriching artist, listener, broadcaster, and even the publishers.