Save Internet Radio
As a very frequent member of the online music scene and internet radio scene, I am quite bothered and concerned by the recent developments in licensing put forth by the RIAA and SoundExchange in the USA. With these recent actions, I am quite uncertain as to the future for my current home of “BOOM” as it is hosted in the USA on Party107.com. I’ll provide more details as I receive them, but just by the looks of it, this could be quite a blow to the internet radio scene as we know it today.
I have included an article from Save Internet Radio. Please read it and pass it along to your friends to promote awareness amongst the community.
If the RIAA and SoundExchange get their way, independent webcasting / Internet radio will soon cease to exist.
Why? Earlier today, the Copyright Royalty Board, the group overseeing statutory licensing for US-based internet radio stations, announced the new royalty rates for streaming radio performance rights. The board rejected the arguments made by webcasters and instead chose to adopt the proposal put forth by industry-backed SoundExchange, a royalty fee collection agency created by the RIAA.
The new rates are based on “performances� of songs. A “performance� is defined as one song being streamed to a single listener. In other words, a station with 1000 listeners is charged for 1000 performances of each song it broadcasts.
Further, the new rates, just announced today, are retroactive to 2006, and increase rapidly each year. The rates per performance are as follows:
$0.0008 in 2006
$0.0011 in 2007
$0.0014 in 2008
$0.0018 in 2009
At first glance, those seem like fairly small numbers: eight ten-thousandths of a dollar, eleven ten-thousandths of a dollar, and so on. When you actually do the math, however, you see the truth revealed. The average radio station plays 16 songs in an hour. Under this system, that would be equivalent to 16 performances.
0.0011 x 16 = 0.0176
Still a fairly small number - under two cents. But now assume this station has 1000 listeners. That means that, in one hour, the station would be billed for 16,000 performances.
0.0011 x 16000 = 17.60
That’s $17.60 an hour. Now we’re starting to see how expensive this truly is. Multiply that by 24 hours a day.
17.60 * 24 = 422.40
$422.40 a day. But there’s 365 days in a year.
422.40 * 365 = 154176
$154,176 for the year in performance royalties alone for a station with 1000 listeners. And that’s just for 2007: it gets even worse. In 2008, the cost rises to $193,536 for the year. In 2009, it goes up to $248,832. Even for a much smaller station, the royalties owed are huge.
Of course, these figures don’t include the other set of rights that Internet radio stations are required to purchase, which must be licensed separately from an agency like SESAC or ASCAP, or the cost of bandwidth and server capacity. When you add all these costs together, you can easily see why nobody, save perhaps a megacorporation like AOL or Yahoo, could afford to pay these rates.
But wait - what’s this? The new rates apply retroactively to the beginning of 2006. In other words, someone who has been happily (and legally) running their small internet radio station for the past few years is suddenly going to be hit with possibly hundreds of thousands of dollars in additional royalties owed. These bills could easily cause a small, independent broadcaster (and his family) to go bankrupt.
Meanwhile, over-the-air radio stations are still not required to pay one dime to the record industry for public performance rights from SoundExchange or an equivalent group. They only need to pay the far more reasonable fees of BMI, ASCAP, and/or SESAC. This reads like another tactic by the recording industry and corporate powers to exert control over anyone involved with music and an attempt to destroy independent broadcasting.
Whether you don’t want to see your favorite internet radio station go off the air, whether you just hate the RIAA, whatever the reason: please, help us get this senseless, greedy policy designed to do nothing but line the pockets of the record industry overturned. Write to, or better yet call, your representative, your senators, and the Copyright Royalty Board. Tell your friends and family, write on your blog, digg this - help get the word out and help to Save Internet Radio!
If you are a webcaster, we want to hear from you! How will this affect your station? What do you plan on doing? Drop us a line at feedback@save-internet-radio.com. If you’re someone involved with setting these rates, you’re also welcome to contact us and explain why you think these rates are fair.
We’ll be updating this site with more information as this progresses, so please check back and get involved!
View: Full story courtesy of Save Internet Radio
Digg This Story: Here
Inhibiting the growth of webcasting was the goal from the outset, with passage of the anti-webcasting provisions of the DMCA. The impossibly burdensome music use reporting requirements and now these grossly unreasonable compulsory license fees are part and parcel of the over all effort to put an end to webcasting.
The problems lies with the music industry’s addiction to its traditional sales-based revenue model and the negative policy implications that has for consumers, technology firms, consumer electronics makers, and digital audio service providers of all types (not just webcasters). There can be no doubt but that public policy should support the opportunity of music industry rights holders to derive substantial revenue from their contributions to culture and to commerce. By the same token, however, the industry has no right to demand that public policy support its desire to do business in a particular way.
What’s really needed is an alternative to the music industry’s sales based revenue model.
I recently published a White Paper (available at bennettlincoff.com/fixing_what_is_badly_broken.pdf) in which I propose such an alternative. Mine is a comprehensive approach to rights licensing and rights management that does not depend on the efficacy of digital rights management (DRM) technology for its success. Specifically, I suggest that the rights of songwriters, music publishers, recording artists and record labels in their respective musical works and sound recordings should be aggregated so as to create a single right for digital transmissions of recorded music. The digital transmission right would be a new right, not an additional right. It would replace the parties’ existing reproduction, public performance and distribution rights (and, in those territories where it applies, the communication right).
Ownership of the digital transmission right in individual recordings would be held jointly by the songwriters, music publishers, recording artists and record labels who contribute to the recording. Each rights holder would have authority to grant non-exclusive licenses for digital transmissions of those recordings on any terms they and their licensees find to be mutually acceptable. The only limitation on this authority would be the obligation to account to co-owners pursuant to whatever arrangements they make among themselves for the division of royalties earned from this newly-established right.
The digital transmission right would be enforceable only against those directly involved in providing digital transmissions of recorded music. Accordingly, consumers would not incur any liability merely for surfing the web, accessing streaming media, or downloading music files. Neither would copying for personal use require authorization. Similarly, software developers, technology firms, consumer electronics makers, and telecommunications and Internet access providers, as such, would have no liability under the digital transmission right. On the other hand, service providers would need licenses if they operate web sites, social networking services, P2P file-sharing networks or the like that provide digital transmissions of recorded music.
Consumers would only need licenses if they act as service providers in their own right; that is, whenever they are responsible for the digital transmissions at issue. By way of example, consumers would need authorization if they operate music-enabled personal or hobby web sites; or if they upload music files to a web site or service that does not have its own license under the digital transmission right authorizing this activity by users of its service (known as a “through-to-the-user license�); or, if they offer recordings to others through participation in a P2P file-sharing network, or similar service, that does not have such a through-to-the-user license.
The right would be implemented through a combination of free market transactions between individual right holders and service providers and voluntary collective rights administration. The best results for all would flow from a marketplace in which collective licensing is the norm and direct licensing the exception. The division of ownership of rights that I suggest will tend to encourage rights owners to work together through collective licensing organizations. I also suggest solutions to the complementary issues of how to license transborder transmissions and on what basis to distribute royalties each from those transmissions. In my view, overall success for the music industry will depend on the presence in each territory of at least one collective organization whose catalogue encompasses all or nearly all recordings and which is authorized to grant worldwide rights at its local rates for all digital transmissions of recorded music that originate from its territory.
Through the digital transmission right implemented as I suggest in the White Paper, digital transmissions of recorded music could be made available from the largest number and widest array of licensed sources, anytime, anywhere, to anyone with network access. Consumers would be free to enjoy music when, where and how they themselves decide. Technology firms and consumer electronics makers would be free to offer greater interoperability between the many recording, playback and communications devices that are available, and to meet consumer demand for new products with next generation capabilities. And, in the aggregate, music industry rights holders would do at least as well financially under my proposal as they do now under the system that my proposal would replace.
Comment by Bennett Lincoff — March 4, 2007 @ 5:57 am