Slashdot Mirror
Experimental Fees Settle Royalty War For Internet Radio
S-100 writes "SoundExchange has reached an agreement for royalty rates with a consortium of Internet radio broadcasters. The parties are ecstatic that the issue is finally resolved, and that the new rates are below the previous 'death to Internet radio' levels that had previously been imposed by the CARB. According to NewsFactor, Pandora founder Tim Westergren proclaims that 'the royalty crisis is over!', and other large broadcasters are equally pleased. One unheard-from group is less likely to be pleased: small Internet radio broadcasters. Buried in the details are a new minimum royalty payment: $25,000 per year. So say goodbye to all of the small Internet radio stations that you have been listening to, as they will no longer afford to operate legally."
The rich take advantage of the less rich:
"Buried in the details are a new minimum royalty payment: $25,000 per year. So say goodbye to all of the small Internet radio stations that you have been listening to, as they will no longer afford to operate legally."
In the USA maybe. I have a suspicion other countries might have a different notion of how that might work out...
Shoes for Industry. Shoes for the Dead.
According to NewsFactor, Pandora founder Tim Westergren proclaims that 'the royalty crisis is over, and we don't have to worry about any small competitors sneaking up and taking our business!'. I may have added that last part, but I'm sure he was thinking it. Like most regulations, it serves mainly to fuck small business and eliminate competition.
Help save the critically endangered Blue Iguana
Perhaps now is a good time for all the upstart talent out there to be heard before getting their work corrupted by the recording industry. Small broadcasters should set up their own organization to collectively promote new talent by sharing their newly found content with each other for broadcasting. All that would be needed is some sort of vetting system to ensure the work isn't already owned by someone other than the artist that created it.
8==8 Bones 8==8
A big reason that traditional radio stations are in the hands of conglomerates only is because the cost of the antenna, broadcast equipment, and the scarcity of available frequency makes it extremely expensive to start a new terrestrial radio station. A Net radio station only needs a Net connection and some open source applications. The 25K means individuals are no longer able to run a free Net radio station. It will also knock out college radio stations who simultaneously stream the terrestrial broadcasts they deliver for no fee. Hobby Net radio is dead in this country. Of course, the agreement only applies to the US so overseas folk can pick up the slack...for now. A shame really and not the win Pandora calls it. It just helps the mid-sized VC-funded
Not only does this new deal not cover every country (the Internet has this global presence to it) but this new deal doesn't cover all music which is legally redistributable in the US. Support artists who aren't signing their copyrights away to the huge few corporate labels, support musicians who share with you under terms that allow you to share further, and you'll find there's a lot of good music out there to be enjoyed. Small radio stations would do well to stop trying to emulate the major radio stations and develop audiences that appreciate something different and new.
Digital Citizen
Actually SoundExchange is THE collection agency for streamed royalties in the US, even indie artists have to collect through them unless they negotiate other contracts which is very difficult to do as it involves lawyers and lots of paperwork to opt out of SoundExchange and they would still collect royalties through SoundExchange for any webcasters they didn't have direct agreements with.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
I've been listening to pandora since it came out - I'm a huge fan. I got this email yesterday... pretty interesting. Apparently I like their free service *too* much:
I hope this email finds you enjoying a great summer Pandora soundtrack.
I'm writing with some important news. Please forgive the lengthy email; it requires some explaining.
First, I want to let you know that we've reached a resolution to the calamitous Internet radio royalty ruling of 2007. After more than two precarious years, we are finally on safe ground with a long-term agreement for survivable royalty rates â" thanks to the extraordinary efforts of our listeners who voiced an absolute avalanche of support for us on Capitol Hill. We are deeply thankful.
While we did the best we could to lower the rates, we are going to have to make an adjustment that will affect about 10% of our users who are our heaviest listeners. Specifically, we are going to begin limiting listening to 40 hours per month on the web. Because we have to pay royalty fees per song and per listener, it makes very heavy listeners hard to support on advertising alone. Most listeners will never hit this cap, but it seems that you might.
We hate the idea of capping anyone's usage, so we've been working to devise an alternative for listeners like you. We've come up with two solutions and we hope that one of them will work for you:
Your first option is to continue listening just as you have been and, if and when you reach the 40 hour limit in a given month, to pay just $0.99 for unlimited listening for the rest of that month. This isn't a subscription. You can pay by credit card and your card will be charged for just that one month. You'll be able to keep listening as much as you'd like for the remainder of the month. We hope this is relatively painless and affordable - the same price as a single song download.
Your second option is to upgrade to our premium version called Pandora One. Pandora One costs $36 per year. In addition to unlimited monthly listening and no advertising, Pandora One offers very high quality 192 Kbps streams, an elegant desktop application that eliminates the need for a browser, personalized skins for the Pandora player, and a number of other features: http://www.pandora.com/pandora_one.
If neither of these options works for you, I hope you'll keep listening to the free version - 40 hours each month will go a long way, especially if you're really careful about hitting pause when youâ(TM)re not listening. Weâ(TM)ll be sure to let you know if you start getting close to the limit, and weâ(TM)ve created a counter you can access to see how many hours youâ(TM)ve already used each month.
Weâ(TM)ll be implementing this change starting this month (July), Iâ(TM)d welcome your feedback and suggestions. The combination of our usage patterns and the "per song per listener" royalty cost creates a financial reality that we can't ignore...but we very much want you to continue listening for years to come.
I'd like to see how you think a WMG lawyer would defeat reliance on a CC license.
Simply by taking them to court you can crush a lot of small stations. When given the option of A) shutting down and WMG will waive the fee B) paying some sort of large (but not huge) fee like $5000 or C) being sued for $50000+. Most stations, especially those ran by individuals in their spare time would simply choose to shut down. The fee could cause a sharp increase in operating costs so the "ad free" station suddenly has more ads then terrestrial radio. If they go to court, they might keep operating for some time, but eventually the court costs could drain their operating costs budget to where they can't afford it. Even if the internet radio people win, they still lose.
Taxation is legalized theft, no more, no less.
Some way to stream anonymously...P2P style, but untraceable? A freenet type thing for pirate internet radio, and that way, ANYONE could broadcast. Not a way really to make money, but, if someone wants to play DJ. You could set up nym email accounts, and communicate with your public, and still avoid identification.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
It doesn't matter if you personally held the copyright to every single piece of audio played on your station. The RIAA will still insist you pay up (or at least file reams of paperwork that no small station can afford to file)
So say goodbye to all of the small Internet radio stations that you have been listening to, as they will no longer afford to operate legally."
Perhaps -- On the other hand, people who make music available without royalty (thus staying outside of the CARB system) -- such as Creative Commons licenses, or even non-CC licenses which simply explicitly allow On-Air radio stations that aren't part of CARB to play them -- might find themselves with a boon as they will then be the only music that small radio stations will be able to play.
If I was a small (or even not-so-small) musician that wanted my music to get play, I'd probably release my music on a license that allowed people who haven't signed up for CARB to play my music royalty free, but had standard fees for stations that had paid the CARB $25K minimum (I mean, why give up royalties that have already been allocated to me?).
That way, smaller stations can play my music, and the larger stations (that really make money) can give me my fair share of CARB royalties if/when I get big enough to attract the attention of the larger stations.
Free Software: Like love, it grows best when given away.
This is probably the most important (and most likely to be overlooked) point in the whole issue. Artists cannot opt-out. Even artists who have never heard of SoundExchange and have never received a check *from* them are generating revenue *for* them.
This might just be a good issue around which to construct a test case for the judicial system. With good legal counsel close at hand, create a station which exclusively plays content that is offered under a suitably free license (http://openmusic.linuxtag.org/, http://www.danosongs.com/, insert your better suggestion ___ here), or where your station has a separate agreement with the artist, or where the artist is not receiving royalties from SoundExchange (and perhaps thinks he/she should be on the basis that SE has collected them from broadcasters).
Publicize, grow, attract attention belligerently.
SoundExchange *seems* to claim to represent all of these scenarios under the "no opting out" doctrine. There is no music "outside of their catalog" as they have no catalog, just an "all your music are belong to us" clause.
In the first two cases, open licenses and individual agreements *should* trump SE's doctrine. If so, then it's time to set about creating a clearinghouse method for mass producing "individual" agreements.
In the third case, SE is ripping off artists in a sense, and shouldn't be able to get away with it. Many small indie artists haven't a clue about SE or how to get royalties from them. Yet SE *keeps* royalties for artists who don't know how to claim them. Existing under a "no opt out" charter is reason enough that the onus should be on SE to notify artists & rightsholders of royalties they have coming.
Pi Ran Out
I don't know if you've noticed, but 99% of commercial music sucks, too. It just has better marketing.
Check out my sci-fi/humor trilogy at PatriotsBooks.
The point of traditional radio stations is to cover costs (and preferably make a profit) with revenue from advertisers by distributing their material to the populace. The populace generally isn't interested in listening to advertisements all day long, so the radio stations must provide material the populace is interested in, with advertisements thrown in periodically. Range "Y" is an artifact of radio broadcasting and power limitations imposed by the FCC to allow wider use of radio spectrum. I agree that the internet's nearly infinite supply of spectrum eliminates the need for any kind of range limitations. Genre "X" limitations are similarly a radio spectrum issue and need not exist on the internet.
Try turning that around: "What can the large one offer that the smaller one cannot if they are both free?" Really, I would expect a larger entity to develop into a far more bureaucratic system, making it slow to respond to listener's changing interests and requests. Further, large entities are somewhat resilient to legal action and more difficult to reconstruct, making them more easily controlled by external parties such as large copyright holders. Such legal action on a small entity would likely crush it, but a new one could quickly sprout up in the hole left by the original. Going back to the original question: "What can the small one offer that the larger cannot i they are both free?" Simply put, adaptability and resistance against external corruption. These qualities do not mesh well with the music industry's legacy business model, thus the attempt to eliminate them with a $25,000 minimum charge. I would be interested to see what kind of logical knots they try to tie in their attempts to defend this minimum.
Wrong. EVERYTHING is under SoundExchange's jurisdiction. They have legal authority to collect fees for EVERYTHING, even artists not under the RIAA umbrella.
Music is rythm, not melody. And as a Techo lover I have to disagree with your statements.
Here be signatures
Slashdot Error: The minimum is $500, not $25,000, as the Slashdot story says. In all these years, the company that owns Slashdot has not learned the basic elements of editing.
I assumed, in my grandparent comment, that the Slashdot story was correct, and was shocked at the amount.
This government PDF file seems to say $500, also: Final Determination Of Rates And Terms, Docket No. 2005-1 CRB DTRA (PDF) Quote: "(b) Minimum fee. Each Commercial Webcaster and Noncommercial Webcaster will pay an annual, nonrefundable minimum fee of $500 for each calendar year or part of a calendar year of the license period during which they are Licensees pursuant to licenses under 17 U.S.C. 114."
You are correct, but the amounts don't seem to change. This is apparently the correct information, from the Proceedings page of the Copyright and Royalty Board (CRB). The link titled "Notice of agreement 74 FR 9293 March 3, 2009" is a PDF file: PDF. See page 9303 of the U.S. Federal Registry:
4. Minimum Annual Fees
(a) In General. For each year from 2006-2015, an Eligible Small Webcaster shall pay annual minimum fees as follows:
(1) $500 for electing Microcasters, which shall constitute the only royalty payable hereunder by an electing Microcaster, except that an electing Microcaster also shall pay a $100 annual fee (the ''Proxy Fee'') to SoundExchange for the reporting waiver discussed in Section 6(a), and the provisions of Section 5(d) shall apply;
(2) $2,000, for Eligible Small Webcasters other than electing Microcasters that had Gross Revenues during the prior year of not more than $50,000 and reasonably expect Gross Revenues of not more than $50,000 during the applicable year; or
(3) $5,000, for Eligible Small Webcasters that had Gross Revenues during the prior year of more than $50,000 or reasonably expect Gross Revenues to exceed $50,000 during the applicable year. (b) The amounts specified in Section 4(a) shall be paid by January 31 of each year. (c) All minimum fees (but not the Proxy Fee for the reporting waiver for Microcasters) shall be fully creditable toward royalties due for the year for which such amounts are paid, but not any other year.
Who says that an agreement between one set of parties binds others who were not party to the agreement?
Congress created copyright law, and by law a copyright holder can sue you in court for copyright infringement, and the courts will enforce it and if necessary bring in gun-toting police to enforce the authority of the court.
But then it gets more complicated. Congress passed a new law specifically to deal with "internet radio" webcasting. This law set up something called CARP - the Copyright Arbitration Royalty Panel - an the law authorized this panel to listen to industry lobbyists and set "reasonable" copyright payment rates for webcasters. The panel was directed to set the rates according to what willing-buyers and willing-sellers would agree to pay on their own under normal free market conditions. The payment rates set by this panel have the force of law.
What then happened is that the RIAA represents a multi-billion dollar industry with huge influence in Washington and with an army of lawyers and with an army of lobbyists and with effective monopoly power to dictate manipulative contract terms. The RIAA then made a deal with Yahoo (and maybe one or two others others) to license Yahoo to webcast the RIAA's copyrighted music. The RIAA manipulated this deal to inflate the apparent royalty rate. The RIAA then submitted this inflated rate to CARP, as evidence of the "natural free market price that willing-buyers and willing-sellers would reach on their own", and the RIAA used all their industry power and Washington influence to influence the CARP process. Webcasting - being brand new and mostly small upstarts and things like college radio - their interests had little or no representation before the CARP panel, and of course they got STOMPED. CARP set impossibly high royalty rates webcasters had to pay. It set impossibly high rates that would exterminate both small and large webcasting. Rates that effectively prohibited any sort of internet radio.
Webcasters, both large-and-small, found themselves faced with retroactive bills they would have to pay, bills far larger than than any money they had and larger than any gross-revenues coming in from webcasting. College radio and similar small and indie webcasters would get smacked with huge retroactive bills and shut down, and larger webcasters would literally have to file for bankruptcy. Webcasters large and small all screamed that the CARP set unfair and impossibly high rates, and they increasingly got their act together as an "interest group" to challenge the CARP ruling, and it appears they were going to be successful in having to reversed.
The RIAA then made a NEW deal with large webcasters. A deal that eliminated the impossibly high per-song-per-listener fee, and allowed them to pay according to a completely different and lower cost payment system While this was a "private contract", according to the CARP system other webcasters would also have the right to opt-in to those terms if they wanted to. The terms of this contract set a vastly higher minimum fee specifically to lock out smaller webcasters. The original CARP system had a $500 minimum payment for college radio and other indie webcasters (with per-song-per-listener fees going up from there), the new deal set a $25,000 dollar yearly minimum fee.
So the RIAA has effectively split the webcaster interest group that were fighting to get the CARP rates reversed. The RIAA gave the large webcasters a deal they could survive with, and effectively eliminated the "big muscle" on the webcaster side fighting the original CARP rates. College radio and other indie webcasters lose the little corporate support and legal support and Washington lobby influence they had. The small webcasters are unlikely to be able to effectively oppose the CARP ruling on their own, and will likely be exterminated.
So small webcasters are *not* bound by this particular agreement, but they are still bound by the CARP panel fees backed by the force of Congressional law. In fact small webcaster
- - You can't take something off the Internet! That's like trying to take pee out of a swimming pool.