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New Royalty Rates Could Kill Internet Radio 273

Posted by Zonk
from the one-of-my-favorite-things-about-the-internet dept.
FlatCatInASlatVat writes "Kurt Hanson's Radio Internet Newsletter has an analysis of the new royalty rates for Internet Radio announced by the US Copyright Office. The decision is likely to put most internet radio stations out of business by making the cost of broadcasting much higher than revenues. From the article: 'The Copyright Royalty Board is rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange (a digital music fee collection body created by the RIAA)...[The] math suggests that the royalty rate decision — for the performance alone, not even including composers' royalties! — is in the in the ballpark of 100% or more of total revenues.'"
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New Royalty Rates Could Kill Internet Radio

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  • by advocate_one (662832) on Sunday March 04, 2007 @05:47AM (#18225044)
    they want to kill the little guys off and just have the field to themselves.
    • by Goldberg's Pants (139800) on Sunday March 04, 2007 @05:55AM (#18225074) Journal
      The problem is that most people aren't going to know about this. What I'd propose is that ALL internet radio stations that will suffer by this stage a day or two of action, synchronized. The busiest hours are probably 9am-5pm EST, so go black for one day, with a message explaining why.

      The only reason the RIAA keeps getting away with this shit is because nobody is willing to stand up to them. If the radio stations banded together for one day of action to draw attention to the issue, maybe something will change, but it's gotta be done very soon, as I believe they only have two weeks to appeal.

      The only stations I listen to are independent and have no RIAA music, but I really don't want to see the option go away. If it does, what are we left with? Your local Clear Channel owned station, and other "genre of the week" stations that satisfy nobody.
      • by rolfwind (528248) on Sunday March 04, 2007 @06:12AM (#18225162)
        Don't do it that way. Have a message playing in between the songs about the looming threat. Have several different messages in between songs about what the people can do. (Maybe key person to contact or website to go to.)

        A person is more likely to listen more than 30 seconds of the important message if there is some payoff (more music) and a station is more willing to do something like that than lose all or most of their audience to a competitor who isn't doing the blackout thing.
        • by Dred_furst (945617) on Sunday March 04, 2007 @06:50AM (#18225278) Homepage
          theres another solution, switch servers to one that isn't based in an RIAA controlled country.
          • by PopeRatzo (965947) * on Sunday March 04, 2007 @09:10AM (#18225708) Homepage Journal

            theres another solution, switch servers to one that isn't based in an RIAA controlled country.


            Dred,
            you have hit on the ultimate solution to all idiotic intellectual property laws. In some years, it will have been a good thing that the Internet caused the end of IP as we know it. Stories like this one, showing how little the "gatekeepers" of recorded music really understand about how people use their product, are starting to pop up at such an alarming rate that the crash must be near.
          • Re: (Score:2, Informative)

            by tepples (727027)

            theres another solution, switch servers to one that isn't based in an RIAA controlled country.
            Good luck. Almost all countries with high-speed access to the Internet are members of the Berne Convention for the Protection of Literary and Artistic Works.
            • Re: (Score:3, Interesting)

              > Good luck. Almost all countries with high-speed access to the Internet are
              > members of the Berne Convention for the Protection of Literary and Artistic Works.

              None of them implement the American extra royalties for internet radio, and most of them have copyrights expiring after 50 years. E.g. in Canada and the UK, everything Elvis did to the end of 1956 is already public domain. That means *ABSOLUTELY NO ROYALTIES WHATSOEVER* on

              - from 1955
              That's All Right/Blue Moon of Kentucky
              Baby Le
              • by multisync (218450)
                Would a U.S.-based company (like my favorite, Radio Paradise [radioparadise.com]) not still be required to pay it, even if their servers were in Canada? Bill & Rebecca would have to leave their country (not that we would'nt welcome them up here).
                • > Would a U.S.-based company (like my favorite, Radio Paradise) not
                  > still be required to pay it, even if their servers were in Canada?

                  I'd assume the worst. Witness stuff like...
                  a) the Lucent-Microsoft patent lawsuit over sales outside the US of stuff covered by an American patent
                  b) the arrests of foreign internet-gambling executives as they made connecting flights via the USA
                  c) the lawsuit, in the USA, against Spamhaus, which is based in England

                  Just to be on the safe side, it would have to be a tota
      • by Znork (31774) on Sunday March 04, 2007 @07:04AM (#18225344)
        I dont have that much against mandatory royalties on revenue generating activities. If we truly need an 'incentive' for creativity they're more compatible with a free market than monopoly rights. And they're far easier to measure and manage for the least damage/most benefit to the economy.

        The first problem with the current setup is that it's put under industry administration (whose interests are vastly divergent with both most musicians and the public, witness the current example), when in fact it's a tax and should be under government administration. That way it'd be subject to the same constraints as other taxation forms; is it reasonably equitably collected, do we get our money's worth from the spending (ie, does it finance as many artists and creators as possible for the money we're willing to spend?), is this a reasonable level of expenditure? What's more, we could actually measure the number of new works and how they change depending on the level of spending so we could finally get real data rather than imaginary numbers made up to support organized con men.

        The second problem is that the RIAA corps are excluded. If we need an incentive for creative endeavors, _any_ revenue generating activity using 'copyrighted' material should be subject to the same taxation, wether plays on the radio, sales over the internet or the printing of CD's. Remove the 'copy' aspect of 'copyright' and replace it with a generalized non-transferrable 'incentiveright'. Allow free copying, printing and distribution of materials, let anyone from your local supermarket to online shops freely copy the material, as long as they pay a percentage of any revenue as 'incentive tax'/'royalty', and make sure the incentive actually goes to the creators. And make sure it goes to them in appropriate portions to maximise creativity.

        Imagine the possibilities; you could go to the local supermarket and print a CD with whatever tracks you want on it. You could buy an USB disk of the nights music at a club. You could get a complete recording of the show when you exit a concert. Without copyright but with a simple levy on the revenue, whole hosts of new business and value opportunities would open up, while still maintaining a (more measurable) incentive for creativity.
        • by digitig (1056110) on Sunday March 04, 2007 @09:06AM (#18225694)

          The first problem with the current setup is that it's put under industry administration (whose interests are vastly divergent with both most musicians and the public, witness the current example), when in fact it's a tax and should be under government administration. That way it'd be subject to the same constraints as other taxation forms; is it reasonably equitably collected, do we get our money's worth from the spending (ie, does it finance as many artists and creators as possible for the money we're willing to spend?), is this a reasonable level of expenditure? What's more, we could actually measure the number of new works and how they change depending on the level of spending so we could finally get real data rather than imaginary numbers made up to support organized con men.
          So we would only have access to music that the government approves of? Bad luck all the acts who are critical of the government, from Pete Seeger through Steve Earle to The Dixie Chicks, and bad luck any genres that are percieved as "evil", from blues and rock 'n' roll ("the Devil's music") to Gangsta Rap ("promotes violence"). Do you really want your senator choosing what you can listen to? Then you must have more trust in your government in the USA than I have in mine here in the UK. Having these choices in the hands of industry may be bad, but passing it to government looks to me to be even worse.
          • by zotz (3951)
            "Do you really want your senator choosing what you can listen to? Then you must have more trust in your government in the USA than I have in mine here in the UK."

            I get this point, but one thing to consider is that it is already in the hands of the government as they make the laws which give copyright teeth in the first place. This is not a free market game here.

            all the best,

            drew
          • Re: (Score:2, Interesting)

            by Anonymous Coward

            So we would only have access to music that the government approves of?

            Huh? Are you going for a world record for the least logical non-sequitur here? Since when did placing the government in charge of collecting revenue automatically lead to censorship?

            you must have more trust in your government in the USA than I have in mine here in the UK. Having these choices in the hands of industry may be bad, but passing it to government looks to me to be even worse.

            Ok, name one single instance in which the current U

            • by multisync (218450)

              Huh? Are you going for a world record for the least logical non-sequitur here? Since when did placing the government in charge of collecting revenue automatically lead to censorship?


              Did you, as a creative artist who is critical of the current administration, want to be collecting some of that revenue?
            • Re: (Score:3, Informative)

              by digitig (1056110)

              Since when did placing the government in charge of collecting revenue automatically lead to censorship?

              The issue is not so much who does the collecting as who does the distributing.

              Ok, name one single instance in which the current UK government has attempted to have "evil" music genres banned, or one single instance in which the current UK government has attempted to have music critical of it banned. Or, come to that, one single other act on its part that leads you to believe that giving it the authority to collect revenues from compulsorary licensing would inevitably lead to censorship.

              Individual MPs -- and indeed groups of MPs -- in the UK, in the Netherlands and in France, have called for restrictions on Rap. They have not succeeded yet, but it's enough to make me nervous. And the licensing act of 2003 has, as predicted by the Musicians Union, caused the widespread closure of folk clubs and live music sessions (just follow the sad litany of closures on uk.rec.music.folk). A lot of us on the folk scene suspec

          • by AK Marc (707885)
            So we would only have access to music that the government approves of?

            Yes. And, that is the system that is in effect now. I haven't seen the government give copyright to Disney and deny it for the Dixie Chicks, so you are an insane raver about the evils of the government. Perhaps you should stick with actual wrongs (that list is long enough) rather than imagined ones that are contradictory to what's actually occurring now. The monopoly of copyright is under government control, and they don't abuse it
        • by KKlaus (1012919) on Sunday March 04, 2007 @09:26AM (#18225776)
          No offense, but this is a terrible idea. Who has the authority to decide what is "valuable"? Britney spears was very popular. Does that make her more valuable? Andy Mckee is a fabulous musician, but relatively obscure. Is he then less valuable, or more because what he does is more difficult and complex?

          Whatever you think is the answer is irrelevant, because the point is that a huge number of people will disagree with you. Whatever answer is legislated, a lot of people are going to be upset when, in their opinion, they're spending money incentivising the wrong thing. And what if I don't listen to music? Am I exempt, or is funding the pleasures of others a reasonable thing to be required of me?

          I don't know why having some sort of committee deciding what artists should be paid seems appealing, and that is what it would ultimately come down to. The free market _can_ work here, it just doesn't because we have stupid copyright laws, and a cartel that no one seems willing to take on. That doesn't make a nonsensical socialist program the answer.
        • by poptones (653660)
          So we still don't have health care for a huge chunk of the population that doesn't require them to forfeit their solvency, but at least they have easy access to pop music.

          Yeah, sounds great. Especially that part where my money is taken by force and funneled into some coffer to be doled out to an industry I despise and religions I disdain.
      • by zeropointburn (975618) on Sunday March 04, 2007 @10:54AM (#18226290) Journal
        Disclaimer: The company I work for is owned by Clear Channel. These comments are my own views and do not reflect the views of my employers.

          Have you considered who will be paying the most? This year, every Clear Channel station in the top 100 markets will be simulcast streaming. That's on the order of 1,300 stations, +/- 100 or so. Since I've already done the math, I'll clue you in.
          Using an average of one song per four minutes, each station will be playing 131,400 songs per year. That's $144.54 per station per listener. TFA quotes 500 listeners as average; that works out to:

        100 listeners: $14,454 --- 500 listeners: $72,270 --- 1,000 listeners: $144,540

        At 1,300 stations or so, that means this ruling will cost Clear Channel:

        100/station: $18.8m --- 500/station: $94m --- 1,000/station: $188m

        I can tell you firsthand they are not making that kind of revenue on their streaming side. Clear Channel stands to lose on the order of $100m this year. Ad revenue might help offset it next year, but we're still looking in the range of $100m or so for 2008 as well. CC most definately did not sign up to lose $150-300m in the next two years; it's really not a good time.

        On a side note: If you want to hear something new on a Clear Channel station, call in or email the PD (production director). Tell him or her you want to hear it. Ask them to check CCADS ('seecads'). If it's not available, tell them to request it from Bobby Leach. Offer to lend them your cd, if it's safe for radio play. Call in or email your favorite jock; tell them to bug their PD about getting the track. Get your friends to request it. If you know people in other major cities, ask them to do the same. If you're not asking the impossible, they will listen and your favorite track will get played. As a bonus, if it gets into the system, anyone can request it in any city and they won't have as much hassle.
        • Re: (Score:2, Interesting)

          by zeropointburn (975618)
          Addendum: I missed a few things.
          There are some talk/news stations, and listener base is much lower during the overnight shift.
          Even so, slashing the losses in half (way more than enough to account for the discrepancy) leaves an obligation of at least $50m yearly. That's assuming none of these stations get particularly popular.
          --Zero
    • by jakoz (696484) on Sunday March 04, 2007 @08:09AM (#18225520)
      What surprises me is how this is assumed to have an effect on internet radio.

      I am a shoutcast fiend. I scan the top stations every day or two. Hardly any of the stations (even the popular ones) play RIAA music.

      Why would it make any difference what they charge if it doesn't get played? They should be paying people to get their shit out there to get it on the air. If they don't (and they won't) then something else will be.

      I would say that I welcome the coming revolution, except that it's so far underway that I'd be missing the boat. Their content is shit, and everyone except the marketing guys recognize it...
      • Re: (Score:3, Insightful)

        by dcollins (135727)
        "Hardly any of the stations (even the popular ones) play RIAA music."

        Does that make a difference? I'm an indie musician, and to my understanding any time a song gets played, a royalty should be paid to a collection agency like BMI or ASCAP. (Possibly based on a reasonable survey technique.) And that money comes back to the writer, publishing rights holder, etc., regardless of whether it's RIAA or not.

        Can someone please correct this information if I'm wrong? (A small number of internet stations that have pla
        • Re: (Score:3, Informative)

          by novus ordo (843883)
          http://www.soundexchange.com/licensing101.html#a1 4 [soundexchange.com]

          I already pay royalties to BMI, ASCAP and SESAC. Why do I have to pay royalties to SoundExchange also?

          Every musical recording embodies two distinct copyrighted works. The first is the underlying musical composition, comprised of the written notes and lyrics (for purposes of copyright law, the musical composition is referred to as a "musical work"). The songwriter and/or his or her music publisher usually own the copyright in the musical work. The second c

          • Re: (Score:3, Insightful)

            by rustman (143533)
            Novus ordo said ``You can go to each band whose music you want to play and make a deal with them directly.`` That's only true if the band owns their own copyrights. If the band has been released on CD / (or through online distribution like iTunes), most likely the band has licensed the rights to their track to a label or distributor. That is who you need permission from, not from the artist.

            So unless you're talking about bands that are unsigned, or bands that own their own labels, the band/artist is not
      • Re: (Score:3, Insightful)

        by schon (31600)

        Hardly any of the stations (even the popular ones) play RIAA music.
        Yes, and this is exactly why the RIAA wants them to die - they're competition for the existing cartel.
      • This is the big misnomer: It's not RIAA music. It's any copyrighted music that a station hasn't been granted explicit permission to play.

        In many cases, the artist doesn't own the copyrights, the record label (small, medium or large!) has been assigned the copyrights as part of the record deal made with the artist.

        Internet station can survive if they go out and get permission from the copyright holders for every track they play. This is tedious and time consuming, but still economically better than paying
      • Re: (Score:3, Informative)

        by rsmith-mac (639075)

        I am a shoutcast fiend. I scan the top stations every day or two. Hardly any of the stations (even the popular ones) play RIAA music.

        It's not about what music is related to the RIAA, it's about who has to pay SoundExchange either way. Looking the top-20 station list on Shoutcast right now, these are the stations that either do or should be paying fees to broadcast in the United States:

        • All Sky.Fm & Digitally Imported stations(6)
        • .977 The Hitz Channel(RIAA music)
        • HOT 108 JAMZ(RIAA music)
        • Radio Paradise
    • by nurb432 (527695)
      That way my thought exactly. Why are they acting suprised?

      We little people are just consumers, 'go out and consume and pay us'.
    • Re: (Score:2, Insightful)

      by Anonymous Coward
      Well, I work in standard broadcasting (i.e., radio -- FM, AM) -- and this is nothing new.

      First, yep, the way the industry looks at it, you have to license against POTENTIAL audience. If you play copyrighted material in an auditorium that holds 1,000 people, you pay the same fixed rate, even if only 20-30 show up. Likewise in broadcasting: we pay the same price whether we're top rated or in the Arbitron basement. They go by market size, not by what you play or how many people might actually be listening. So,
    • they want to kill the little guys off and just have the field to themselves.

      What they want and what will happen is not the same. What will change is the format of the stations. Many will go to talk radio. Many others will go to Creative Commons and other inde content and ban any music with high cost. Not all stations will go home when the owner of the base ball says I'm taking my ball and going home. The game just changes to football or basketball.
  • Fine by me (Score:3, Insightful)

    by JackMeyhoff (1070484) on Sunday March 04, 2007 @05:49AM (#18225050)
    Why? It is like all issues of abuse, Patents abuse, music / video media abuse, software patents etc Let them do it, then what happens? Nobody uses their product. Then what? They start to backtrack. Let the system just eat and destroy itself from withing then come the meltdown a new dawn of change comes. Let them get their way and see how long it lasts, all it takes is people to stand up and say enough. Do you really need the shit they produce? No you dont NEED it.
    • by nurb432 (527695)
      No of course you dont *need* it, its entertainment. its optional.

      But, that lack of 'need' didnt stop the *AA's from becoming some of the most powerful entities on the planet.
    • by couchslug (175151)
      "Do you really need the shit they produce? No you dont NEED it."

      The only way for the weak ("us") to beat the strong is to leverage their own responses against them. Their reflex reaction to distribution they do not like is more and more onerous restriction.
      I welcome this. The few people who break their DRM will provoke even more obnoxious DRM. DRM does not generally restrict anything I care about, so making it less convenient to obtain things I wouldn't obtain in the first place bothers me not.

      Another bene
  • by Anonymous Coward on Sunday March 04, 2007 @05:53AM (#18225062)
    "New Royalty Rates Could Kill (Legal) Internet Radio"?
  • by GroeFaZ (850443) on Sunday March 04, 2007 @05:56AM (#18225090)
    then Internet killed the video star. Then Greed killed the Internet radio star and pissed on all of their graves.
  • Pandora knows what I am listening to every second of the day that I am listening to music. They have , literally, a perfect listener profile of me, created by myself!

    If they cannot find a way to monitize the living daylights out of that, then they need to hire some better mathematicians...
    • Pandora knows what I am listening to every second of the day that I am listening to music. They have , literally, a perfect listener profile of me, created by myself! If they cannot find a way to monitize the living daylights out of that, then they need to hire some better mathematicians...
      There are people who prefer old-fashioned DJ-mixed music.

      Broadening the spectrum of the music you listen to can definitely benefit your spirit. Pandora doesn't...
  • Opportunity (Score:5, Interesting)

    by Xiroth (917768) on Sunday March 04, 2007 @06:01AM (#18225120)
    Huh. Big opportunity here for independent artists looking to get heard. Wonder if this'll backfire like...well, just about every other money-grabbing scheme from the RIAA and co.
  • by Anonymous Coward on Sunday March 04, 2007 @06:02AM (#18225122)
    There has grown up in the minds of certain groups in this country the notion that because a man or corporation has made a profit out of the public for a number of years, the government and the courts are charged with the duty of guaranteeing such profit in the future, even in the face of changing circumstances and contrary public interest. This strange doctrine is not supported by statute nor common law. Neither individuals nor corporations have any right to come into court and ask that the clock of history be stopped or turned back, for their private benefit.
    -Robert Heinlein "Lifeline"
    • Re: (Score:3, Insightful)

      by Restil (31903)
      Many corporations and industries are hesitant to change their entire revenue model. This is especially the case in such industries such as the music and movie industries which work today much the same as they have since they were originally formed. Whenever a new technology becomes available that they have no control over they are presented with two opportunities. Spend a small amount, which is probably already an allocated expense, to use the government, courts, and other industries to stifle or outlaw
  • The RIAA has a responsibility to bring more money for the music artists. Unfortunately they misread "going above and beyond to help the people you represent" as "going above and beyond anything... hey Bob who is it we say we're representing again? <Music artists!> Yes, we are only here to help 'music artists'."

    "Hey Bob, you hear my youngest started playing the recorder in Kindergarten today? I filled out another WTF1337 form today and we should start seeing the revenues next month. :woot:"
  • by the_REAL_sam (670858) on Sunday March 04, 2007 @06:33AM (#18225228) Journal
    Right?

    Streaming audio isn't a crime.

    • by Eudial (590661)

      Right?

      Streaming audio isn't a crime.


      But... but... that would be un-american! You're not one of them terrists are you?
    • Streaming audio isn't a crime.

      it will be if they have it mandated that it must be wrapped in DRM cruft with crap like broadcast flags set to prevent recording it and you can only receive it using player software that respects the broadcast flags running on tpm certified OS... Microsoft's wet dream, to get Linux made illegal

  • They are totally screwed when they actually read their accounting sheet.

    Divide it up any way you like there are only two or three outcomes.
  • .... itunes radio or yahoo music? I saw references to consequences for radio paradise, live365, and pandora, but not yahoo or itunes.
  • by dbcad7 (771464) on Sunday March 04, 2007 @06:53AM (#18225294)
    Unlike conventional radio stations, more listeners costs the station more money. Imagine what would happen if local radio and TV stations were charged extra based upon the numbers of viewers and listners.. I doubt that would fly.
    • by lixee (863589)
      Good point. But all quality radios I know of, are listener supported. (i.e: voluntary contributions from listeners who like the service)
  • by DigitAl56K (805623) on Sunday March 04, 2007 @07:07AM (#18225346)
    When faced with the RIAA monopoly, many people propose a boycott that is unrealistic: People won't stop buying CDs, downloading from iTunes, or the like.

    What needs to happen is for Internet radio stations to turn to independent labels. Consumers will buy the music they hear. If Internet radio stations commit to changing the majority of their playlist to artists on non-RIAA labels then the majority of profits will be diverted from the RIAA - they don't get per play royalties and they don't get royalties on purchases. It's a double-whammy. If you look at something like eMusic today, which doesn't carry the RIAA labels, you will quickly find that a little digging turns up more great music than you might actually expect. And it's not just Internet stations that should make the change - everyone can benefit from getting out of this monopoly stranglehold. The RIAA might eventually have to propose competitive terms to survive, artists will be better compensated, and labels which are smaller today will be able to grow faster not only because they will see a greater percentage of royalties, but because the best artists will be less drawn to the RIAA labels in the first place.

    Perhaps, though, the RIAA is already starting to feel some bite, and this is why their proposed fees are so high. If you're paying 100% of your revenues to the RIAA, you aren't paying anything to the indie's.
    • by DigitAl56K (805623) on Sunday March 04, 2007 @08:20AM (#18225554)
      I'd like to follow up my own submission with some further thought. Unfortunately it's either late at night here, or early in the morning, depending on how you look at it, and further thought takes some time ;)

      One of the other arguments that is often offered in the case for independent labels is that the music is more authentic, creative, and less 'manufactured'. However, to truly displace the RIAA we should realize that it is necessary to cater to the mass markets that they currently serve. It is difficult to instantly change the listening habits and genre preference of millions of people, therefor an effective program would rely on enough mainstream pop, rap, hip-hop, etc. music to be produced by independents and marketed in a way which reaches younger generations and begins to draw their attention from traditional RIAA artists.

      Never in our history have we been so prepared and capable to tackle this problem. Modern music technology and tools in combination with the Internet helps to level the playing field, at least somewhat, such that professional sound is in reach of the amateur through virtual instruments and production software that can be purchased for only hundreds of dollars, while co-ordinated marketing across popular sites contributing to the cause could compete with major budgeting spends by big labels.

      If there were enough contributors to undertake such a concerted movement it might be interesting to set up something akin to sourceforge, e.g. a "musicforge", where independent artists collaborated to produce substitutes for mainstream media and served them to Internet radio stations, at least as a beginning, to help drive the change. If mainstream music is really as formulaic as we often claim it to be, in theory reproducing it to a reasonable standard should not be impossible or even very difficult.

      Just some thoughts :)
    • by lixee (863589)
      You're conveniently overlooking monopoly in your argument. It's like saying we should ditch MS Windows; I support the idea and run exclusively Linux on my machines. Yet, everytime I send a .odt to someone, he replies saying that he couldn't open it with MS Office. Same goes for the IE only websites.

      What is needed is a grassroot opposition that takes back power from corporations for the common good.
    • Re: (Score:3, Interesting)

      by mstrcat (517519) *
      Actually the boycott isn't all that hard. I haven't bought anything that gives revenue to the RIAA for over 5 years now, yet I listen to more music than ever. My sources of music are: www.magnatune.com -> Indie music, DRM free, full length previews, easy downloads www.cdbaby.com -> Indie music, great 'sounds like' recomendation, good prices www.spun.com (or any other used CD source) -> for when I just have to have an RIAA artist. Buying used doesn't generate any more royalites for the
    • by zotz (3951)
      "What needs to happen is for Internet radio stations to turn to independent labels. Consumers will buy the music they hear."

      Fine, but I will go you one further. They should only play Free music on which no royalties are due. Then they should turn around and pay out the same amount in royalties. Say half to the copyright holders of the music they played and half to fund the creation of new Free music.

      If they just play traditional ARR music from "indies" the big boys will just buy out the rights and the stati
    • If you look at something like eMusic today, which doesn't carry the RIAA labels...

      Dude, you're clueless. emusic is laden with RIAA labels. Being an "indie" does NOT mean "not RIAA affiliated." I even signed up for their "25 free" promo to check out just how many RIAA labels there are on emusic - there's thousands listed on emusic, and you can bet thousands of those are RIAA affiliates. They carry cocteau twins and breeders (for example) who are on 4ad. And who owns 4ad? Beggars Banquet - and BB is an RIAA a
    • by Lumpy (12016)
      First Pay for play is illegal, yet the RIAA figured out how to get that in place. Indies at least sane indie artists never EVER ask to be paid for airplay. Only a complete and total idiot would do that. Airplay = free advertising and the ONLY way to get more people to know you exist. I think the RIAA should increase the ASCAP and BMI charges to 3X what Radio stations charge. That way the indie artists will be incredibly attractive to the net radio stations and get far more play rotation. A couple of c
    • > When faced with the RIAA monopoly, many people propose a boycott that is unrealistic: People won't stop buying CDs, downloading from iTunes, or the like.

      No, but you can pirate, instead :] I find that more likely than a boycott, too...
  • Payola? (Score:3, Interesting)

    by Merkwurdigeliebe (1046824) on Sunday March 04, 2007 @07:23AM (#18225382)
    Doesn't his counter their payola-intuition?

    So, in some cases they'll pay a station to play their music, other times they want to be paid to for the priviledge/right(if given) of playing their music. If you go by the logic of payola : exposure=more popularity tranlates to more sales. However, in this case, they want their exposure diminished for what exactly?

    • by makomk (752139)
      Doesn't his counter their payola-intuition?

      So, in some cases they'll pay a station to play their music, other times they want to be paid to for the priviledge/right(if given) of playing their music. If you go by the logic of payola : exposure=more popularity tranlates to more sales. However, in this case, they want their exposure diminished for what exactly?


      On the contrary, the two fit together perfectly. With payola, they get control over the output of most/all of the big commercial radio stations (w
    • by Dunbal (464142)
      they want their exposure diminished for what exactly?

            So that they can arbitrarily enforce copyright violations when they feel like it. Sheesh don't you get this MAFIAA mentality yet?

            "Tony, haven't I given you everything over the years? Haven't I been like a brother to you, and a Godfather to your children? All I expected was your loyalty to the family. I'm sorry Tony, but I have no choice now... (to the FBI) Take him away, boys..."
  • by mattus (1071236)
    'US Copyright Office' -> Move your servers to a place that is outside of US jurisdictional where the copyright laws are not controlled by large media companies. Last time I checked US law does not effect the rest of the world.
  • by EPDowd (770230) on Sunday March 04, 2007 @08:21AM (#18225560) Homepage
    RIAA, I am very puzzled. I used to find out about new recordings that I might want to buy, by hearing them on the radio. For quite some time now it seems that Radio stations, AM and FM, all seem to play the same tiny group of music, over and over. I never hear the music I buy, and play at home, played on the radio. When people started using the Internet to make small "Internet only" stations there were enough of them so that I once again had a way to find out about new stuff. How would I ever buy it if I did not know that it existed? This morning I read: "Kurt Hanson's Radio Internet Newsletter has an analysis of the new royalty rates for Internet Radio announced by the US Copyright Office. The decision is likely to put most Internet radio stations out of business by making the cost of broadcasting much higher than revenues. From the article: 'The Copyright Royalty Board is rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange (a digital music fee collection body created by the RIAA)...[The] math suggests that the royalty rate decision -- for the performance alone, not even including composers' royalties! -- is in the in the ballpark of 100% or more of total revenues." I am puzzled. It seems to me that you are killing the best, largest, and only way for me, and others, to find out about new music from the artists that you say you are representing. For the life of me I cannot figure out why you are doing this. I can't buy it if I don't know it exists. I like Bluegrass, Swing Band, 1950's oldies, Traditional Country, Traditional Western, Western Swing, some Jazz, and several other types of music. I hear a very small portion of this, once in a great while on the radio. But so rarely that it is not worth sitting through the usual tiny, bland, group of stuff that is normally played. Most of it is just not played anywhere except on the Internet. Please let me know how you think I am going to find out about the music you want me to buy.
    • The more *different* music people buy, the worse it is for the RIAA associates. Consider: if people by about 100M records a year (a number I just made up whole-cloth for illustory purposes), is it better for the RIAA members to sell 10,000 each of 10,000 records, or 5M each of 20 records?

      And is it better for them to have new types of music (rap or grunge, for instance) popping up, or to have music that all sounds the same? Considering that it's difficult to select the next hot-selling group or musician if i
      • Re: (Score:2, Insightful)

        by MobiB (1071390)
        EXACTLY! You hit the nail on the head. Non major label acts (ie. local and indie label acts) are a threat to the big 5 and the RIAA. The largest 2 reasons that CD sales have declined in the last decade is because a. quality and variety have diminished and b. paying $12-$19 for crap is a further deterrent. Wider and alternative channels to get music they don't control (and artists they are not actively screwing out of royalties) has great potential to become a massive competitor were it ever to gain tracti
  • Let's be fair (Score:2, Insightful)

    by Anonymous Coward
    and apply these fees to terrestrial radio also. This would then effectively kill ALL radio. A radio station that claims 10,000 listeners at any given time would owe 1.5 million per year. And retroactively collected should put about 80% of stations out of business. Terrestrial radio would be in big trouble because they have to claim more listeners to get the advertising dollar, but being popular would work against them. So, people, let's be fair and give them what they want and tell them to be careful what y
  • This looks to be based soley on music, but is there a chance that other types of streaming, such as sports radio, may also be affected? I don't care too much about music (I don't care much for today's offerings), but I like to listen to my hometown sports station (610 WIP out of Philly) when I travel.
  • It'd be very much better if they started playing music from non RIAA sources. I'd definintaly listen to a station like that if they played quality (as there's a lot of rubbish) stuff that I wanted to listen too.
  • This might well force internet radio to take up more and more independent artists
    that would otherwise get turned down by the dispensing recording industry,
    never see the light of day - and be a great way for indies to get on the air
    to a large audience without having to compete with the established artists for
    time.

    As soon as they see their "mind-share" eroded by people outside their
    http://en.wikipedia.org/wiki/Payola [wikipedia.org] payola system the recoding industry will turn around
    and offer payola or even demand to be put
  • by WindBourne (631190) on Sunday March 04, 2007 @10:45AM (#18226222) Journal
    The nice thing about this, is that could help kill off the RIAA. What needs to happen now, is that the established streamers need to set up alternative streams where they use NON-RIAA controlled music. To encourage it, their RIAA controlled stream could slowly lengthen the time between songs AND advertise the other stream in the RIAA controlled stream. Finally, to encourage the music development outside of RIAA, they need to start paying money to the artists. If they could get together as a group and agree on a rate (ideally close to the old RIAA rate), then as a group pay them. Perhaps magnatune will consider taking it on. Once the musicians realize that they can make a great deal more money by not signing with labels (RIAA), new ones will have nothing to do with them. In addition, we will probably see new labels who have nothing to do with RIAA. The final nail in this, that the group needs to go to the same place where radio stations pay out at (it is not direct to RIAA) and get paid their lower rate. It will encourage regular radio to look at the riaa musicians music.
  • This is really a case of two businesses negotiating a contract. The Internet broadcasters have two choices: play and pay, or stop. The broadcasters, who are businesses trying to maximise their own profits, are whining about costs being too high (duh). The music types, also trying to maximise their profits, will charge whatever rates the market will allow. If the rates are set too high, broadcasters go bankrupt, the music industry loses a cash cow, and rates come down. Eventually, they'll all come to an
    • by Cheeze (12756)
      right, but what about Joe Blow Schmoe who was running an internet radio site from his basement? He's now gotta find a new gig.

      This is just another notch in the ever-tightening belt that the RIAA has around the consumers neck.
    • by Dunbal (464142)
      The Internet broadcasters have two choices:

            The US Internet broadcasters...
  • Involved in this are three key players: government, radio stations and the mafiaa. And all of them have good reason to enjoy this regulation.

    The mafiaa for obvious reasons. The radio stations simply because this will pretty much kill the freelancing opposition. And the government 'cause it's easier to keep some business oriented and cash dependent radio networks "in line" than a couple thousand renegade stations that broadcast whatever they would like, not so much what is along some arbitrary "rules" or reg
  • I seem to recall a similar event around 2001 when they were looking to start charging royalties for internet radio stations. If I remember right they wanted royalties proportional to the number of listeners * each song played. A book keeping nightmare if I remember correctly.
  • by roman_mir (125474) on Sunday March 04, 2007 @11:52AM (#18226740) Homepage Journal
    I almost don't listen to music and I never listen to music on radio, but I do listen to the local talk shows that we have in Toronto (Ontario, Canada.) The CFRB1010 (cfrb.com) and AM640
    (640toronto.com) are the two stations that carry really great talk show hosts. Anyone can call onto the stations and express their point of view about the subject at hand.

    Most of the time the subjects are local to Toronto or Ontario or Canada, but sometimes we have world wide subjects as well and it is not all politics, it can be anything, from RIAA and DRM to health care to municipal/provincial/federal politicians to climate issues, class sizes, you name it, we have had it discussed on radio.

    These are AM radio stations of-course (that's why I will never have an iPod or something like it, because it has no AM radio.)

    So for me good radio is about discussions of local/global issues with ability to express a personal point of view. Oh, and we have about equal number of conservative/liberal talk show hosts and though I may not agree with all of their views, they are still interesting to listen to.

    These stations provide their own internet streams and since their content is original (talk shows, weather, traffic, news, commercials) RIAA can't force any royalties. Of-course it's different for FM music channels, but I don't care, those are not essential. By the way in Canada AM radio is federally regulated. Is it very different in the US?
  • by JustNiz (692889)
    This will reduce play time and therefore marginalize the big labels crapmercial pop music even more so that we get less of the same old bland diet of whichever talentless model they're currently trying to market.

    There are many incredible bands that produce excellent music but don't get offered contracts because some bureaucrat like Simon Cowell with no musical ability and a very one-dimensional taste decides their image isn't right or whatever. Hopefully this will mean that internet radio will now only play
  • by Garwulf (708651) on Sunday March 04, 2007 @02:25PM (#18228012) Homepage
    I've read the article, and while the royalty rates are on the ludicrous side, I've got to wonder why everybody is thinking that this is a bad thing. Frankly, this could be the best thing to ever happen to internet radio and the music scene.

    I've been thinking about the impact a lot since reading it, and it seems to me that there are two groups of radio stations to consider:

    1. Online pirate stations who are broadcasting the music illegally. While I don't think they should be pirating the music, the fact is that if they are pirating it now, making the royalty rates higher are not going to stop them from pirating the music and playing it. To misquote Terry Pratchett, "they're PIRATES - they don't care about the law." So, no real impact there.

    2. Online stations that are playing the music legitimately. This will have quite an impact on them, and most likely a positive one all round. Well, I should say, for everybody except the labels represented by the RIAA, who just got themselves priced out of the market.

    It seems to me that online radio isn't going to disappear, but will do something else - the broadcasters will vote with their feet. SoundExchange and the RIAA will have a very difficult time proving that retroactive royalties are due in any court of law, and the larger stations should be large enough to defend themselves, so I doubt that the RIAA will press too hard on that one (after all, if the RIAA tried to collect from AOL, you'd have a battle royale that would take years to sort out, and my money would be on AOL). But, with the royalty rates so high, no radio station will be able to play music from an RIAA label, and the broadcasters will be very hungry for new material.

    So where do they find this new material? Independent artists. With the online broadcasters desperate for material, it will be a seller's market for independent recording artists, in the process giving that section of the market just the sort of boost it needs. This will raise the profile of the independent music scene, while at the same time allowing the independent artists to negotiate a reasonable royalty situation with the broadcasters. So, the listeners who get exposed to new (and less corporate) material win, the independent artists win, and the broadcasters get out from under the RIAA thumb, so they win.

    Come to think of it, the only people who lose are the RIAA, who just got shot in the foot and lost a market...

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