Source

In the world of webcasting the following occured:


Determination of Rates and Terms for Webcasting for the License Period 2006-2010 in [Docket No. 2005-1 CRB DTRA] Digital Performance Right in Sound Recordings and Ephemeral Recordings


(...denied were the requests for a new hearing by a coalition of webcasters (including NPR) on grounds that there was lack of any new evidence.)
So, as it now stands, commercial webcasters must pay per song as follows:

2006 - $0.0008
2007 - $0.0011
2008 - $0.0014
2009 - $0.0018
2010 - $0.0019

Non-commercial webcasters must fork over $500 in advance annualy per channel or station up to a total of 159,140 aggregate tuning hours ("ATH") per month. After that, they pay the above rates per song played.

Yikes! (Guess I won't be launching any web-radio stations anytime soon.)

And, just who the hell is going to start up a NON-COMMERCIAL station when they gotta pay $500 per year at minimum?

SaveNetRadio.org is obviously and understandably pissed. As I write this, they have a clock on their website counting down (at 15 days, 22 hours and so many minutes/seconds) to the "day the music dies".

All of this revenue for the webcasting licenses is to be collected by SoundExchange (an RIAA appointed/affiliated entity, despite any "official" claims to the contrary.) Terrestrial radio pays NOTHING to SoundExchange. Traditional broadcast radio pays ASCAP/BMI for licensing which theoretically/supposedly goes to pay the artist and publisher.

This new ruling by the Copyright Royalty Board asks webcasters to pay the money (via SoundExchange) to the copyright holder of the sound recording. (RIAA labels for the most part.) Something seems bass-ackwards to me.

Does the RIAA hope to earn any real money from this arrangement? Surely they are not THAT stupid. If these rates stand, NOBODY (likely not even the likes of Yahoo Music!) are going to play ball. Everyone will simply close shop and webcasting will be dead. I wonder. Is this what the Recording Industry wants?

H.R. 2060, The Internet Radio Equality Act was introduced by Representatives Jay Inslee (D-WA) and Donald Manzullo (R-IL ) in an effort to "save" the Internet radio industry.

"While the record industry may try to fight this bill, it's actually in their best interest: They're better off getting 7.5% of the revenues of a thriving new medium — plus all of the positive exposure for new genres and new artists, and associated CD sales, that Internet radio is providing — than 50% to 200% of nothing, which is what they'll get if the CRB decision stands and U.S.-based webcasting essentially shuts down on May 15th... " (www.KurtHanson.com)

Hmm... I am almost tempted to hope the bill does fail. If royalty rate increases can rid Internet of the RIAA's music, the world would be a better place. After all, there is nothing to stop indie music from being heard on Internet radio when the indie artist directly "opts in" with the webcaster. (Side-stepping the whole corrupt system in the first place.)

Support Local and Independent Music!
--Shmoo

(Go visit independentmusician.blogspot.com for all the links and etc.)

Why wouldn't internet radio simply move to a different country? Like Vanuatu?

I can't whip up much enthusiasm or personal concern for internet radio. If they didn't insist on using RIAA music, they would never have had a problem in the first place.

Agreed.

But part of the "beef" is that SoundScan is supposedly claiming it has the right to collect royalties for any artist, no matter if they have signed with an RIAA label or not.

As for me, I don't think a recording artist/producer/label has any right whatsoever to these kind of performance royalties.

Maybe I am tainted by tradition in thinking that the songwriter/publisher should be who benefits from this kind of statutory royalty arrangement.

The artist/label should earn it's money from sales of repeatable RECORDINGS.

(And don't nobody try to deflect what I am saying by shouting things about "streambox" or other software capable of capturing streaming digital audio ...I mean, c'mon. We have been able to hit the record button on our cassette decks forever and a day.)

The underlying BEEF here is that the RIAA is trying to get a piece of the songwriter/publisher's pie, a' la mode (with a double-dip of icecream)

...and if they FAIL at that, they get to kill-off net-radio. (Which is actually probably MORE-SO of the RIAA's true goal.)

Never forget, in the eyes of the RIAA and the content cartel, the less options anyone has, the BETTER.

Monopoly!

Within the next year, I intend to start up an internet radio station that will be playing the stuff that I've been downloading over the past four years.

Under no circumstances will I be affiliating myself with ASCAP, BMMI, SESAC or the RIAA. I will develop my own procedure that will put the money aside to pay the recording artists directly (if possible).

It's the recording artist -- not the producer, not the recording company, not the songwriter -- that makes the song a success and therefore they deserve the majority of the reward.

...Shit.

Keep in mind that the RIAA very much DOES want webcasting to die and it really doesn't care very much about the royalties that the Big Four could possibly earn.

The RIAA is TERRIFIED of webcasting - more so, in my opinion, than they are of illegal downloaders. What Internet radio does is expose audiences to new artists and niche genres - artists and genres that are basically shut out of FM radio airplay. The the limited number of available AM/FM frequencies means that they cost a lot of money and make it economically necessary for station owners to program to the widest (and lowest) common denominator. The RIAA has traditionally benefited from this as they are the ones that make widest and lowest common denominator type product. For that reason, highly influential major market FM stations will not give independent artists and labels the time of day.

Thanks to the Internet, less well known artists and genres are able to find new audiences. And this, of course, cuts into the RIAA's market share. They are TERRIFIED of Internet radio because they realize that, in a few years, when Internet radio becomes available in cars, FM radio will no longer the be the one and only place that determines which songs do and do not become popular. Internet radio stations programed by people who are passionate about the music and who are not necessarily worried about any bottom lines will be take over that role. The audience concentrations that are currently found on FM and on which the RIAA depends on to promote its products will go away forever. And, unlike FM, the RIAA does not have any particular advantage over independents when it comes to promoting its recordings to Internet stations. Internet stations are too small to warrant the expense of payola, junkets, prostitutes and other goodies that the labels fork over to the decision makers in large FM stations. A station with only a few hundred or a few thousand listeners will warrant little more than a few mp3s and emails - and independent artists can send those out just as easily. And there will be THOUSANDS of such stations out there each with avid fans no longer listening to FM stations advertising RIAA product.

That is why the RIAA wants webcasting to die. What it seeks in its place is to bring to the Internet the same sort of programing that is found on FM. That is exactly what the high royalty rates are designed to accomplish. They set the rates so high that only a handful of operators with deep pockets will be able to get into the game and, because of the cost of royalties, they will only be able to stream music that appeals to very wide lowest common denominator audiences.

What this does is shuts out independent artists and labels from receiving Internet air play.

The RIAA knows it cannot compete on the Internet - so it uses its political pull to try and destroy it.

It is true that stations can license directly with the artists and bypass SoundExchange. But the task of doing so is so time consuming and difficult that few will make the attempt - they will just close down their stations or not start new ones.

This time and hassle of direct licensing is why performance rights clearinghouses exist in the first place. Unfortunately, when it comes to playing copyrighted recordings, the RIAA basically has a puppet organization that is a MONOPOLY that operates exclusively for the interest of the Big Four labels and against all other owners of intellectual property in this area which the RIAA regards as emerging competition. If you have the money and wish to stream RIAA produced mass market stuff, then there exists SoundExchange. If you wish to stream stuff that is too obscure to justify the high SoundExchange rates - well, there is no clearinghouse you can go through.

For that reason, if this bill fails, it will NOT mean that Internet radio will continue to survive by simply not playing RIAA recordings. The way the copyright law works is you must go through SoundExchange if you want to play ANY copyright recording - even those by non-RIAA labels and artists. And since few stations can afford the time, paperwork and hassle of direct licensing, they will close down.

The thugs at the RIAA represent a dying industry. There once was a time when big record labels were necessary. It was a capital intensive industry and it cost a lot of money to record, manufacture, distribute and promote recordings. Those days are long over. People now have studios in their garages. And there are thousands of professional recording studios one can rent by the hour and lots of companies who will manufacture CDs for you at a reasonable price. It costs next to nothing to distribute recordings over the Internet. The RIAA labels have no major advantage over the little guys when it comes to producing, manufacturing and, increasingly, even distributing recordings. The only thing that the RIAA labels have left is their ability to promote recordings via FM airplay. And now that is in jeopardy. And being aware of its impending demise, the RIAA is fighting back like a cornered rat.

That is why it is very important to contact your Congress person and ask them to co-sponsor HR 2060. Don't allow the musical diversity offered by Internet radio to be destroyed in the name of giving an already dying industry a few more years to hang on before it meets its inevitable demise.

You nailed it!

Bravo mononominal!

" I can't whip up much enthusiasm or personal concern for internet radio. If they didn't insist on using RIAA music, they would never have had a problem in the first place. "

G isn't off base here.

Buuuutttt....

I go back to my old Band days for
example ....

We played originals, but, never a whole
evening of them .
The covers brought newcomers in, and
the originals either flew or flopped.
It seems to me the small niche stations
( some, not all ) have similar reasoning.
Known, 'majors' offering to bring in listeners with a
sense of the familiar, mixed with non-
affiliated independents.

Makes sense to me.
Stations paying a REASONABLE rate
to play 'majors' ( like they HAVE been
all along ) is right.

There is absolutely no reason to have
them pay ANY MORE than radio or sattellite,
except to silence them.

This is OBVIOUS to everyone.
To blatantly ignore this is criminal.