New Royalty Rates Could Kill Internet Radio 273
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.'"
Re:Fine by me (Score:1, Interesting)
Pandora's marketing data alone is worth millions (Score:4, Interesting)
If they cannot find a way to monitize the living daylights out of that, then they need to hire some better mathematicians...
Opportunity (Score:5, Interesting)
Re:surprised??? never... (Score:5, Interesting)
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.
Re:Shouldn't the title be.... (Score:1, Interesting)
Actually, that's kind of good.
Re:surprised??? never... (Score:5, Interesting)
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.
Genuine solution is actually really easy (Score:5, Interesting)
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.
Payola? (Score:3, Interesting)
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?
Re:surprised??? never... (Score:5, Interesting)
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:Genuine solution is actually really easy (Score:5, Interesting)
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
Re:Genuine solution is actually really easy (Score:3, Interesting)
Greed is going to kill the RIAA (Score:4, Interesting)
Re:surprised??? never... (Score:2, Interesting)
Look, even the BBC regularly broadcasts material that many people consider offensive, and material intensely critical of the government. If the government was intent on censorship of "immoral" broadcasting, why the hell did it not stop the BBC from broadcasting that Jerry Springer opera thing? (Answer: because the government is not intent on censorship.) If the government was intent on censorship of criticism, why the hell is John Humphreys not in prison? (Answer: because the government is not intent on censorship.)
You are clearly paranoid, old chap. I suggest you sit back, have a nice relaxing cup of tea, and contemplate the possibility that the government might, just possibly, have bigger things to worry about than persecuting you.
Clear Channel loses big, too (Score:5, Interesting)
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:Clear Channel loses big, too (Score:2, Interesting)
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
Local talk shows in Toronto, Canada (Score:3, Interesting)
(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?
Re:Well, (Score:3, Interesting)
Whether or not the people who make it need to make money from it has nothing to do with its artistic value. A number of artists made money though other means (they had day jobs; they were supported by others; they were already rich; they had become rich enough from their previous work to be able to retire comfortably, yet didn't) but still created artistically valuable works.
And similarly, people talking shit can be valuable too. Copyright does not make artistic judgments. The law and government are absolutely no good at doing that, and shouldn't do that. Right now, these posts (well not mine, see below) are copyrighted, and copyright attempts to serve as an incentive to cause them to be created. I agree that this is bad, but not for the same reason as you. I think that copyright should be an opt-in system. If some
Formalities are a good way of trimming back copyright so that it serves as an incentive, yet isn't granted more than it ought to be.
Where did you get point 3 from?
Partly from all post-Anne copyright law, which always expires after a particular time. Partly from human nature, which is greedy (that's not a bad thing; artists seek out copyrights because they're greedy, and the public gives out copyrights, yet limits them, also because they're greedy). Partly because the obvious (yet sadly unrealistic) ideal world would be one in which everyone who could create, did, yet there were no copyrights, and everyone was free to enjoy works as they saw fit, amass huge collections for free, etc. And partly because there really is a self-evident public interest in having unrestricted works, just as there is an interest in having more works.
If the copyright for a film lasted 5 years, then when the next format comes out, the copyright holders would make £0, whereas now they make a lot more.
This has yet to be determined, actually. DVD was a lot more popular than VHS, but HDDVD and Bluray have yet to be. And with backward compatibility in place, there's less pressure to replace one's DVDs with a newer format. Eventually there will be a shift, but it'll be caused more by changes at the supply level. And we've seen a lot of replacements come out that have challenged CDs (e.g. DVDA, DAT, Minidisc, SACD) and none have gotten anywhere. Downloadable music is doing okay, but more on the piracy side of things. Free MP3s are popular against costly CDs; costly MP3s (or whatever), significantly less so.
P
Re:surprised??? never... (Score:3, Interesting)
> 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 Let's Play House/I'm Left, Your Right, She's Gone
Good Rockin' Tonight/I Don't care If The Sun Don't Shine
Milkcow Blues Boogie / You're A Heartbreaker
Mystery Train/ I Forgot To Remember To Forget
- from 1956
Heartbreak Hotel
I Was the One
Hound Dog
Don't Be Cruel
Love Me Tender
I Want You, I Need You, I Love You
When My Blue Moon Turns to Gold Again
Anyway You Want Me (That's How I Will Be)
Blue Suede Shoes
The RIAA is afraid their current crap^H^H^H^Hcrop can't compete with 50+ year-old music. That is the most stinging put-down of today's (so called) music.
Re:Well, (Score:3, Interesting)
Also, I think we should split the right to copy from the right to produce derivative works. Direct copies, with minimal changes to the content should be preserved for 20+ years. However, we could allow derivative works sooner than that. That would still allow for substantial incentives to producers, but would also allow for mash-ups and the like within a few years of the creation.
That's an interesting idea. My take on this has been to have an exception for natural persons engaged in noncommercial activity. So people could make mash-ups right off the bat, but not if they charged for them (or used them as a draw for advertising, etc.) and not if they were a corporate entity or the like. Given that most individuals ignore copyright these days anyway, but do support the idea of copyright applied to commercial endeavors and entities, I think it's in keeping with our social norms.
Combine that with a registration system for the copyright after a few years (to solve the orphaned works problem),
Registration should be required no more than a year after publication (which would be broader than what it consists of now). If an author can't be bothered to register, I don't see why we should be bothered to give him a copyright. This is more generous than the old system (which required them by publication), less generous than the present, insipid, system (which doesn't really require registration at all), and is kin to the patent system (which gives people a year to decide, and works pretty well in that regard).
Remember, most orphaned works are orphaned at birth!
and I think we'd be doing pretty well.
Yes, but a few more things are wanting. For example, repeal of chapters 9-13. Having measures in place that make copyright and DRM mutually exclusive, so as to discourage the use of DRM (I don't think it can be banned, due to free speech, but we surely don't have to give people copyrights for DRMed works). Having measures in place to fully federalize copyright. Limiting the use of adhesive contracts and terms of sales, so as to reduce the dangers and use of EULAs. Exceptions that take into account the reproduction that is unavoidable in our computer technology, but which is not really material in an infringement sense. Better safe harbors for ISPs. Statutory secondary liability (the courts have screwed up on this, otherwise I'd leave it to them). No copyrights for classes of works that don't need it, e.g. architectural works. Some other formalities, such as deposit. Pulling out of Berne and other treaties, but providing for unilateral national treatment. Better treatment of sampling (it's basically just audio collage, and is transformative enough that it would generally be fair). There's some other things too, but already this list grows large. Dealing with things like DRM, however, are key before we can think we're doing pretty well.
Why is this a bad thing? (Score:4, Interesting)
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...
It's not RIAA music. It's any copyrighted music. (Score:3, Interesting)
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 under the statutory license.
It will only kill those who try to stay legal. (Score:4, Interesting)
Of course, you can just say, screw it, and not pay, and hope you're not noticed. It's actually worked very well for lots of stations out there.
Net radio didn't cry wolf, it sounded the alarm. And only through the listeners and supporters who wrote and called their congress people was the small webcasters act passed.
We are going to have to act again to preserve the state of internet radio as it is. Only this time we should get right to the cause, and act to get the provisions of the DRPA and DMCA that removed the fair use exemptions that over-the-air broadcast radio has from these royalty requirements.
Re:Kill Internet Radio, or... (Score:3, Interesting)
A radio station playing music is advertising the product.
Are the stories published in a newspaper or magazine merely advertising for the writers? What about talk radio Is that content merely advertising for the commentators? What are they selling? Are journalists and writers getting rich by touring the world and performing at stadiums? Are sports broadcasts merely advertising for the sports teams?
Content draws listeners, and the station must pay for content to attract listeners. A regular listening audience allows the sale of advertising time. What is the difference between paying a journalist, a comedian or a composer for content?
Why does this discrimination exist? Where is the outrage against copyright control over the written word, or photography, or works of art? Why can't one radio station merely re-broadcast the news report of their competitor on a thirty second delay (but with their own advertising) and save lots of money on staff and resources? Would it be acceptable in your world for every network to sponge off one network to broadcast pro sports?
Aren't composers and the companies which back them financially worthy of being paid for their time and effort? The people who write software code get a salary, so why not the people who write music? It seems that if it's not popular entertainment (games, movies, music, please stand up), then copyright is not a problem around here.
Please don't start with the "fat-cat music biz scoundrel ripping off innocent musician" argument, because it's so full of cliché that I'll retch if I hear it one more time. Lots of people make bad business choices every day, either because they're naive, stupid, have bad luck or all three. People get ripped off too, often for the same reasons. Rock stars are heroes and have a public outlet, and so they can cry their woes from rooftops and their sob stories are embraced by the masses. Boohoo for them, but their plight should be exceptionally low on the list of priorities for world revolution.
Stating that music content on a radio station (broadcast or online) is merely advertising to encourage the purchase of the same entertainment product is just plain wrong. It is a factor in the equation, not the entire equation.
"If it is truely a free market, then you would create your own station and compete
instead of demanding extra money from the successful."
You're confusing "free to make choices" over "free to do anything I want". The copyright holder can demand more money, but a station doesn't have to accept. They can find different content and not have to pay that copyright holder. Or they can continue paying, but find ways of generating higher revenue. If enough stations reject the copyright holder's costs, then maybe the cost will come down, or maybe the copyright holder will be stubborn and put themselves out of business. If enough stations acquiesce and find ways to make more money, then the business risk has paid off for the holder. This is rather simple stuff.
Re:OK...That's solved by not playing RIAA music. (Score:3, Interesting)
http://ipaction.org/action/perform/ [ipaction.org]
OK, doesn't actually mandate TPM OS's, but it's a slippery slope from there...