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RIAA and Net Radio Broadcasters Reach Agreement

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  • by dada21 (163177) <adam.dada@gmail.com> on Wednesday September 24, 2008 @04:57AM (#25132997) Homepage Journal

    ...it's also a sign that the RIAA knows it is outdated and is only grasping at the few straws remaining.

    If you're thinking of starting a business venture, there are two words for you: supply and demand.

    No amount of laws or regulations can overcome supply and demand in the long run. The RIAA relied on preferential laws and regulations to maintain their control over distribution. Recorded music has a near-infinite supply in terms of distribution online. Hence the price of it should fall to nearly zero (yes, some people who see value in compensating the artist will never believe the price should be zero).

    The RIAA is screwed, no matter how you look at it. Most monopolistic corporation unions who rely on legislation and not on supply and demand are just as screwed.

    • by WTF Chuck (1369665) on Wednesday September 24, 2008 @05:05AM (#25133027) Journal

      100% of nothing is nothing. If you are going to charge your distributors more for your "product" than your they will make selling that "product", then you get the full 100% of nothing. On the other hand, if you see that they will walk away and find some other line of work if you insist on the full 100%, then you know it's time to come to somewhat more reasonable prices.

      • by mcgrew (92797) * on Wednesday September 24, 2008 @09:08AM (#25134591) Homepage Journal

        The product isn't the music, it's the media the music is stored on. CDs going away? I doubt it, until a replacement media comes along, but music can be used to sell other merchandice; phones, memory sticks, even soda pop (which they're already doing).

        Advertising needs music. TV shows need music. Movies need music. Jukeboxes in bars aren't going away any time soon. There are a lot of ways to monetize music without selling it directly.

      • Re: (Score:3, Insightful)

        by JWW (79176)

        Yes, but 0.1% of something really large is still a significant number. I agree that the price can't go to zero for buying a song online, but I fail to see how it couldn't go down to say $0.10 per song.

        • by shark72 (702619) on Wednesday September 24, 2008 @10:38AM (#25135885)

          "Yes, but 0.1% of something really large is still a significant number. I agree that the price can't go to zero for buying a song online, but I fail to see how it couldn't go down to say $0.10 per song."

          The laws would have to change for this to happen. Mechanical royalties (we're talking downloads, not the new interactive streaming model discussed in TFA) are around $0.08 by law. The lyricist and the composer of the music each get their own mechanicals, and this doesn't include performance royalties -- the per-track royalty that the performer negotiates with the label.

          There are exemptions and other tricks that the labels use to lower the mechanical royalties, but for a track that, say, has music written by Joe, lyrics written by Fred, and is performed by Lindsay who's negotiated $0.05 per track, the royalties are liable to be more than $0.20. Record companies can't hold back mechanicals to pay for production costs, but even if they hold back Lindsay's $0.05 because the record hasn't yet made money (which is the case for most records), the record label still owes the mechanicals.

          There's also a big disagreement about the true costs of producing a track. Many Slashdotters believe that production costs are next to nothing, and that record companies don't have significant costs for marketing, salaries or overhead. This helps foster the notion that each download is cost-free to the record label. The popularly understanding among people who are familiar with business is that record labels do indeed often have significant costs, and those costs are amortized into the cost of sale.

          Your assertion that there's no reason that tracks won't go to $0.10 is hugely popular on Slashdot -- no doubt about that. I encourage everybody who truly believes this to start their own record label and sell music for $0.10 a track. Paraphrasing Gandhi, you can be the change in the music industry that you want to see.

          • Re: (Score:3, Insightful)

            Many Slashdotters believe that production costs are next to nothing, and that record companies don't have significant costs for marketing, salaries or overhead. This helps foster the notion that each download is cost-free to the record label.

            No, what fosters the notion that each download is cost-free to the record label is the simple fact that each download is cost-free to the record label.

            Do not confuse up-front costs with per-item costs. Just because a track cost an enormous amount of money up-front to produce doesn't mean that any of that cost applies per download.

            • by shark72 (702619) on Wednesday September 24, 2008 @12:13PM (#25137571)

              You've actually amplified my point. There's a huge difference between parts cost and actual cost per sale, and an essential difference between net margin and gross margin.

              That mouse you might see on sale for $19.99 might have less than a couple of bucks worth of plastic. But the cost sheet developed by Acme Mouse Incorporated might have a dozen line items consisting of R&D charges which are amortized into product costs based on forecasts. These are very real costs that can't be ignored. You're correct that they're paid upfront, but Acme needs to get the money, and if Acme is in the sole business of selling mice, then they recoup those costs one mouse at a time. The amortized overhead and development costs are as real and genuine as material costs in the eyes of accountants and investors. It's not play money; it's not "soft dollars." If the mouse has $2 in material costs and another $4 in burdened development costs, if they sell the product into distribution for less than $6, they're losing money.

              And record companies aren't much different than than mouse companies. Even with digital goods (and whether it's a song or a piece of software or a stock photo), up-front costs are amortized as a cost of sale. Record labels are primarily in the business of selling music, so it's the sales that must recoup the development costs.

              I know this may seem counterintuitive or even nonsensical for many Slashdotters. But it's a concept that folks in the retail industry understand all too well.

              Some folks have pointed out that if supply of digital goods is theoretically infinite, then amortized cost per sale should be a limit approaching zero. The issue here is that amortization applies to sold items. If you sell 10,000 instances of software and a metric squillion copies are pirated, you're only allowed to amortize your costs over those 10,000 sold. Taking the analogy to hard goods, Acme Mouse must amortize R&D costs over the forecast of units sold; even if they bury a million mice in the Arizona desert or shoot a billion into orbit via Space Shuttle missions.

              • Re: (Score:3, Insightful)

                It may amplify your overall point but the fact remains that the per-download costs of a track are essentially zero. Basically all of the costs are up-front. Obviously that up-front cost gets amortized into whatever price they charge for the product, but that doesn't make it suddenly magically transform into a per-download cost.

                Your example at the end about piracy and shooting mice into orbit perfectly illustrates this. If it were truly a per-unit cost then that cost would be borne over every unit produced,

                • Re: (Score:3, Insightful)

                  by shark72 (702619)

                  More granularity is required here. In accounting terms, a paid download has no cost of goods (COGS) costs, but it does have cost of sale (COS) costs.

                  You're correct that a download performed, say, via BitTorrent or from one random person to another has no costs which are charged back to the software company or record label (although these companies would love to convert piracy statistics to losses on their balance sheets!). Costs of sale, on the other hand, are very real.

                  I wasn't aware that you're liable to

                  • Re: (Score:3, Insightful)

                    I assume that "cost of sale" would refer to things like paying the credit card companies, bandwidth, and so forth? If so, that is easy to overlook, but it's also quite a small cost. For example, from what I've read about Apple's iTunes store, a $1 track puts something like 10 cents into the transaction costs and the rest goes to either the record companies or to paying off Apple's fixed costs. And this could be made a lot smaller with a better payment processing system, although I will freely admit that suc

              • Re: (Score:3, Insightful)

                by sjames (1099)

                What you say is true, but there are further issues involved.

                For example, imagine the situation where Acme allows you to make an exact copy of their mouse using your own plastic and assembly line, but they charge you slightly MORE than if you let them make it for you and ship it to you.

                Yes, there are fixed up-front production costs involved that must be amortized over sales. There are also promotion expenses on-going that must be covered. However, there are per-unit manufacturing and shipping costs that one

          • Re: (Score:3, Interesting)

            by Idiomatick (976696)

            Many people have been popularized through the internet. The cost of this is 0 for marketing/advertising i'd say about 100$ for producing to get good computer recording gear (Increase after a few hundred thousand sales to rent a recording studio for songs). Overhead costs being a website for lets say 20$ a month (start costs will expand with viewers aka customers). If you charge .10 a song and sell a 'cd' to 6M people every month ala nickleback everyone in the band gets 1million per cd made. Though I think m

      • by electrictroy (912290) on Wednesday September 24, 2008 @09:13AM (#25134651)

        The Slashdot summary is wrong. (Surprise.) It's 10.5% for places that allow the user to pick his/her songs. But broadcast internet radio, where the DJ controls the music, is still unresolved. They are still paying the "per play" royalty fee.

        So places like Shoutcast are still in danger of going bankrupt due to the tyrannic fees imposed from above.

      • by Guysmiley777 (880063) on Wednesday September 24, 2008 @09:27AM (#25134821)
        The net radio companies need to pay bandwidth, they have to have some money coming in.

        The way I read the agreement, it seems to be 10.5% of gross revenue, so basically for a break-even operation this would essentially be a 10.5% operating tax.

        This doesn't appear to affect Pandora though. FTFA:

        Limited download services include online stores such as Napster to Go or Rhapsody, where the end user can keep the music he or she downloads - albeit for a "limited" time. Interactive media sites, such as IMEEM and Last.FM, allow the end user to pick and choose the song he or she wishes to listen to. Both these concepts are different from internet radio, where like terrestrial radio, the play list is determined by the radio operator. Unfortunately for sites like Pandora, the agreement leaves their issue unresolved.

    • by Anonymous Coward

      Supply and demand [...] Hence the price of it should fall to nearly zero (yes, some people who see value in compensating the artist will never believe the price should be zero)

      There will always be a segment of the population who wants to produce music simply for the fun of it. But they still need to eat.

      If there's no income in music, it'll end up strictly a hobby-level endeavor. While a lot of decent stuff can come out of that, wouldn't it be better if the highly-talented musicians could focus more on thei

      • by mcwidget (896077) on Wednesday September 24, 2008 @05:17AM (#25133095)

        There will always be a segment of the population who wants to produce music simply for the fun of it. But they still need to eat.

        More than this; the potential to earn enough cash quickly (and easily?) enough to allow you and your family to live comfortably for the rest of your life is a major driving factor for many of the people in the business today. The less reward there is available, the less motivation. Rightly or wrongly, with less reward you have less talent - or at least, less depth of talent.

      • by QuantumG (50515) * <qg@biodome.org> on Wednesday September 24, 2008 @05:31AM (#25133173) Homepage Journal

        The world could do with vastly less musicians who are in it for the money.

        • by akirapill (1137883) on Wednesday September 24, 2008 @05:46AM (#25133233)
          It's an expensive habit, most of us are just trying to break even.
          • Re: (Score:3, Interesting)

            by QuantumG (50515) *

            Maybe without the RIAA around there could be some legitimate structuring of the music industry. As a programmer, if I had to find all my own clients I'd probably barely get by too.. although there are plenty of one-man bands in this field who get along just fine, it's not for everyone.

            • Re: (Score:3, Interesting)

              by PunkOfLinux (870955)

              I'm interested in seeing how Severed Fifth does. Jono Bacon (yes, from LugRadio) did everything for it, so it will be interesting, to say the least.

          • by BlueStrat (756137) on Wednesday September 24, 2008 @07:18AM (#25133659)

            It's an expensive habit,...

            Yeah, I think that statement should be in the running for some sort of award for "Most massive understatement in a /. post".

            most of us are just trying to break even.

            Anything that's music-related...instruments, amps, etc...is extremely pricey. A decent brand-name USA-made professional-quality electric guitar will set you back $2,000-$3,000, and the same with an amp (thinking of an example of a new Gibson Les Paul and a 50 watt Marshall half-stack). That's the best part of $10,000 for just *ONE* guitar players' personal rig in an average good-quality bar/club cover band!!

            That's not counting effects pedals and/or rackmount effects/processors, cabling, strings, picks, stands, microphones ($100-$150 each), PA gear, and the maintenance costs of keeping all the equipment (which can be quirky) and the instruments in shape. Heck, just a new set of tubes for a guitar amp can easily run $200-$300! That's just for starters. Then there's transportation and storage costs for all the equipment, and personal transportation and lodging plus food costs, and even laundry for those on the road, on top of that for all the band members.

            Most average bar/club bands don't come anywhere near to paying even ongoing expenses, never mind also recovering their investment in the equipment and instruments when you factor in all the costs. Most bars only pay a band $350-$500, many even less. Many times a band will get stiffed altogether by shady bar owners. These guys do what they do because they love playing and entertaining. Please keep this in mind the next time you go to a bar or club and see a tip jar at the edge of the stage.

            Cheers!

            Strat

            • by fprintf (82740) on Wednesday September 24, 2008 @07:54AM (#25133897) Journal

              The thing is, hobbies are expensive. The fact that you have an opportunity to make some money on it is just an extra bonus. Think the guy who is into sailing moans about the $10-$200K he has in gear, and how "the man" (e.g. the Coast Guard) makes all these laws conspiring against him earning some income off his investment? Or how about the airplane pilot, with $200,000 sunk into his private plane that cannot take private passengers for hire?

              What makes musicians so special and whiney? It is a hobby, albeit an expensive one, that if you are really really good at, you can get paid to do. Same with pilots. Same with boat captains. No one owes anyone an income from their hobby.

              • Re: (Score:3, Interesting)

                by ArhcAngel (247594)

                What makes musicians so special and whiney? It is a hobby, albeit an expensive one, that if you are really really good at, you can get paid to do.

                What makes musicians so special and whiny? It is a hobby, albeit an expensive one, that if you are a really really good entertainer , you can get paid to do.

                Fixed that for you.

                And just to play devil's advocate what potentially high paying profession doesn't have a high cost of entry? Doctor, Lawyer, Engineer, et al all pay a high premium for their education and ar

                • Re: (Score:3, Insightful)

                  by BlueStrat (756137)

                  I'm not talking about the few dedicated dyed in the wool musicians who love their craft and would do it even if they couldn't make a living off of it but they are, in fact, the minority.

                  I'd have to disagree that they are the minority. In my 30-plus years experience as a musician having met and played with more musicians than I could possibly count, almost all do it because they love music and playing for people. Do many have hopes they might get lucky? Sure, but they realize they're more likely to be struc

              • Re: (Score:3, Funny)

                by kalirion (728907)

                Phase 1: Make every profession a hobby.
                Phase 2: ?
                Phase 3: Communism.

                And my way doesn't even need any blood spilled. Take that Marx!

              • Re: (Score:3, Insightful)

                by wronskyMan (676763)

                Because in America, we had a principle at some point in time that the govt should by default not regulate your actions unless it had a legitimate need to. Boat and airplane accidents can kill passengers, that is why the FAA and USCG regulate commercial use. While I have heard some pretty horrible amateur music, I doubt many people have been killed by a crappy track. Also, music is a form of speech which falls under the first amendment, flying and sailing don't (unless you're skywriting maybe).

            • Re: (Score:3, Funny)

              by roaddemon (666475)

              And that's not even including the drugs.

            • Re: (Score:3, Insightful)

              by mcgrew (92797) *

              Most bars only pay a band $350-$500, many even less.

              here in Springfield it's usually less, but then again there's supply and demand. There are a lot of musicians here, many of then tending bar in the same joints they perform in.

              Some make a lot of money, though. My friend and former neighbor, Ed McCann, gave up his job as a union carpenter because he was making more money singing (yeah, the guy's REAL good. I haven't seen Ed in quite some time).

              Many times a band will get stiffed altogether by shady bar owner

        • by zotz (3951)

          So, every time you release a song, buy a lottery ticket for the song? You may hit it big even if the song flops.

          all the best,

          drew
          http://zotz.kompoz.com/ [kompoz.com]
          Check out She Took Me Nowhere

      • by Daniel Dvorkin (106857) * on Wednesday September 24, 2008 @05:32AM (#25133179) Homepage Journal

        Everything you say is true. The problem is that there is no evidence whatsoever that the RIAA contributes anything toward the ability of musicians to make a living off their music. Given the numerous horror stories about just how much industry parasites suck out of the music buyer's dollar on its journey from the buyer's wallet to the musician's bank account, it's quite reasonable to believe that it is more difficult to make a living as a professional musician with the RIAA around than it would be in the absence of such an organization.

        • by TheVelvetFlamebait (986083) on Wednesday September 24, 2008 @06:56AM (#25133535) Journal

          The problem is that there is no evidence whatsoever that the RIAA contributes anything toward the ability of musicians to make a living off their music.

          Actually, that doesn't matter. If the RIAA is not doing anything good, then they will fail. They will get no artists, and no customers. They will fail and it will be no skin off your nose. There's no need for intervention on behalf of the artists, and those who enjoy some of the RIAA's music, as we can and will decide what we want for ourselves.

          Given the numerous horror stories about just how much industry parasites suck out of the music buyer's dollar on its journey from the buyer's wallet to the musician's bank account, it's quite reasonable to believe that it is more difficult to make a living as a professional musician with the RIAA around than it would be in the absence of such an organization.

          I really don't think so. How could it possibly be easier for artists without the choice of being with a big label? I simply don't see the logic there, unless you assume that artists can't make decisions for themselves.

          • Re: (Score:3, Interesting)

            by scalarscience (961494)

            Actually, that doesn't matter. If the RIAA is not doing anything good, then they will fail. They will get no artists, and no customers. They will fail and it will be no skin off your nose. There's no need for intervention on behalf of the artists, and those who enjoy some of the RIAA's music, as we can and will decide what we want for ourselves.

            You underestimate lawyers & politicians. The RIAA has been around for a lot longer than the history of net radio, and has their finger in suppressing competing

        • by Digital End (1305341) <<excommunicated> <at> <gmail.com>> on Wednesday September 24, 2008 @10:17AM (#25135531)
          You could earn $500 a week working clubs (if you're very lucky). Of that money, you pay the whole band, eat, fix equipment, and so on.

          The RIAA shows up, and offers to show your material to everyone in the country with their advertising, which means instead of a bar's worth of people, you have a country full... but they get 1/2 your money and get to decide what you write music about (prepare for angsty teen drama).

          Still a net gain financially... even if it means your giving up creativity and freedom for it. Just depends if the artist finds writing and preferming their own music more important then money.

          Possible fixes to the system? Independant website that works kind of like Pandora... mods mark a song with certain genres, people listen, vote for songs with a simple 'thumbs up or down' option, pay the artist based on how often his song is listened to (obviously more $$ if the song is good), people who don't suck get paid, people who do suck don't.

          And yes, exploitable... bugs would need ironed out... but it's 9am, lucky I can type this early...
    • by Ihmhi (1206036) <i_have_mental_health_issues@yahoo.com> on Wednesday September 24, 2008 @05:10AM (#25133049)

      Very true.

      The future will be "Songs are our promotion, and concerts are where the real money's at."

      For about $5,000 you can buy a complete set of recording equipment - the necessary laptop, software, mics, etc. to go with your instruments. If you want to do it on the cheap, well... that's why recording studios exist. How often do you hear about recording studios going bankrupt and having an unsuccessful business model? They don't.

      The RIAA is the middleman that can be cut out far too easily. All they have going for them is their marketing power, and as they lose money that will be waning as well. Artists will form coalitions, collaborations, etc. and pool their resources to get the word out - like a record label, but less concerned with selling plastic discs and more concerned about advertising.

      Either the RIAA is going to reinvent itself into a successful business or it's going to collapse under its own weight. Either way, it will be interesting and the artists will survive.

      • by akirapill (1137883) on Wednesday September 24, 2008 @05:42AM (#25133217)

        For about $5,000 you can buy a complete set of recording equipment - the necessary laptop, software, mics, etc. to go with your instruments. If you want to do it on the cheap, well... that's why recording studios exist. How often do you hear about recording studios going bankrupt and having an unsuccessful business model? They don't.

        While you are correct in saying that the huge drop in price and increase in quality of recording equipment has made it easier for artists to publish their music independently, the same fact is actually driving professional recording studios out of business. Engineers are making a fraction of the money they made 15 years ago now that every middle schooler knows how to use Garage Band, and small studios are increasingly losing out from competition at home if they're not backed by a label. Whether or not this is a good thing is debatable because on the one hand it removes obstacles from musicians and further minimizes the impact of the recording industry on music, but it hurts the art of recording when its harder for professionals to make a living.

        • by Ihmhi (1206036) <i_have_mental_health_issues@yahoo.com> on Wednesday September 24, 2008 @05:52AM (#25133257)

          True, but most studios include engineering as part of the recording (or don't charge much extra). An experienced professional can make your music sound better than some Garage Band newbie.

          • by Cyberax (705495) on Wednesday September 24, 2008 @06:49AM (#25133505)

            Or compress it to sound louder...

          • by Lumpy (12016) on Wednesday September 24, 2008 @07:04AM (#25133575) Homepage

            And experienced professionals can make it sound like raging crap as well. Listen to most of the stuff out there now. They compress it hard so most of the dynamic range is not there, plus they EQ it for some pimply faced 16 year olds cheap car stereo and speakers propped in the back window.

            It's very hard to find a RIAA disc that was mastered by a pro that did it right instead of their cookie cutter nastyness they have been creating lately.

            • by u38cg (607297)
              Be fair. They aren't doing that by their own choice. Industry professionals do what they are asked to do, not what they think is best.
            • by garett_spencley (193892) on Wednesday September 24, 2008 @07:37AM (#25133765) Journal

              The compression is done first on the master and then finally even further at the radio station.

              So yeah it's not entirely incorrect to say that engineers are to blame, after all the mastering engineer is called such for a reason. BUT a general rule of good practice is that the mastering engineer not be involved in any of the recording, mixing or production process at all until the final master. The reason behind this is that it's considered to be a very good idea to have a completely fresh set of ears on the mastering. When you listen to an album over and over and over again your ears start putting on all kinds of filters and your objectivity goes down the toilet. It's one of the many reasons that mastering engineers (as a specialty) exist.

              But yeah, of course professionals can do a bad job. I'm not disagreeing with your post. Just trying to point out that compression is almost never performed before mastering (which has nothing to do with recording or mixing). The only exception being on a track-by-track basis where compression is deemed required to achieve a particular effect on a particular instrument. Only the mastering compresses the entire recording. Then radio stations compress it even further for playback.

            • Re: (Score:3, Informative)

              by Jah-Wren Ryel (80510)

              It's very hard to find a RIAA disc that was mastered by a pro that did it right instead of their cookie cutter nastyness they have been creating lately.

              To give credit where it is due, I've read a number of times over the years that the pro engineers don't have a choice. They do know how to do it right, but the people who write the paychecks - RIAA MBAs - are telling them to do the over-compression on purpose. They can do it, and get paid or they can not do it, get fired, and the next guy will do it anyway.

      • by Technician (215283) on Wednesday September 24, 2008 @06:09AM (#25133345)

        For about $5,000 you can buy a complete set of recording equipment - the necessary laptop, software, mics, etc. to go with your instruments. If you want to do it on the cheap, well... that's why recording studios exist.

        5 Grand isn't needed. Using a laptop, free software (Ubuntu Studio) an inexpensive interface, small mixer, & mics can be done for about half that. It works fine for the band I record. Many small bands already have most of the supplies already such as a laptop, mixer and microphones. If these already exist, then free software and an under $300 interface will work nicely.

        Cheap is the under $30 Berhinger which does CD or DAT sample rates and bits. In Linux Ubuntu Studio it it truly plug an play as a USB input/output device. Open Audacity and select the USB audio for the source and hit record.
        http://www.zzounds.com/item--BEHUCA202 [zzounds.com]

        Don't record off a Sound Blaster compatible card except for maybe webcasts and other lower quality work. The hardware has a fixed bitrate, regardless of what you set in software.

        The next step up in hardware will give you 96K 24 bit recordings.

        Many studios are finding competion from the inexpensive gear that just works.

        My setup excluding the already purchased computer cost under $500 for the mixer, a couple mics, and the interface. I have the ability to record 4 tracks at once and and layer over 30 tracks for post processing and adding wet tracks.

        A typical session is recording the 4 drun tracks to a click track which are then played back while recording the back-up vocals, bass, keyboard and lead guitar. These are synced (remove latency) and then the lead vocal is recorded while the prior 8 tracks are played back. This is followed with adding wet tracks with EQ, effects, delay, reverb, etc. prior to the final mixdown for the CD.
        Under $200 4 channel interface able to do 96K 24 bit recording is here;
        http://www.bhphotovideo.com/bnh/controller/home?O=&m=Y&IC=PRI1394&A=RetrieveSku&Q= [bhphotovideo.com]

        For a little more money, recording 8 tracks at once is the studio standard for PC based recording studios, but mics, mixer, and interface will run over $500 for that set-up.
        http://pro-audio.musiciansfriend.com/product/Echo-AudioFire8-8-Channel-FireWire-Audio-Interface?sku=247003 [musiciansfriend.com]

        The cost of the set-up is less than a typical studio session. This recording in your own studio is common now that the high cost has been eliminated.

        • by Ihmhi (1206036)

          Well, I was factoring in stuff like buying a laptop from scratch. And then there's price. Low quality mics often result in low quality sound. A good set of drum mics with stands alone are going to run you, cheapest, $300.

          There's ways you can cut corners, I'm sure, but $5,000 was a rough estimate anyways. d:

      • by CaptainZapp (182233) * on Wednesday September 24, 2008 @06:11AM (#25133351) Homepage

        For about $5,000 you can buy a complete set of recording equipment - the necessary laptop, software, mics, etc. to go with your instruments.

        I believe that Steve Albini [wikipedia.org] may disagree with you.

        If you don't know who he is, this essay [globaldarkness.com] is extremely interesting.

      • Re: (Score:3, Insightful)

        by westlake (615356)
        The future will be "Songs are our promotion, and concerts are where the real money's at."
        .

        That's fine if you are Gordon Lightfoot and still have the stamina and the talent to fill the 3000+ seat Shea's Buffalo at age 69.

        Maybe not so fine if your burn out from the rigors of a full concert tour at a much younger age.

        --- or you know that you are never in your professional career going to see a booking at a first, second or even third tier concert venue.

        • by vux984 (928602) on Wednesday September 24, 2008 @07:36AM (#25133759)

          That's fine if you are Gordon Lightfoot and still have the stamina and the talent to fill the 3000+ seat Shea's Buffalo at age 69.

          A tile setter won't have the stamina at age 69 either. That trade is deservedly considered to be 'back breaking'. Do the users of bathrooms he tiled in his prime pay him a royalty?

          Maybe not so fine if your burn out from the rigors of a full concert tour at a much younger age.

          Maybe they'll need to find new jobs when they age? Its how the rest of society copes with the fact that they can't do the jobs they did when they were younger.

          --- or you know that you are never in your professional career going to see a booking at a first, second or even third tier concert venue.

          And?

          Most models passing through expensive modelling schools never even earn enough at modelling jobs to pay back what it cost to go through 'school' and keep their portfolio maintained. The VAST majority never do better than a department store catalog job. And as they age and become less marketable... long before that, in most cases, they find another job.

          So most musicians won't be successful enough to live off concert revenue, so what? They can get jobs like everyone else, and can join the ranks of: most poets, most authors, most fencers, most basketball players, most playwrights, most actors, most open source contributors...

    • by Daniel Dvorkin (106857) * on Wednesday September 24, 2008 @05:18AM (#25133109) Homepage Journal

      The RIAA is screwed, no matter how you look at it.

      As long as they can buy laws, copyright regulations, and even international treaties, they're doing just fine. Sooner or later, their influence will probably wane, but don't hold your breath waiting. They've got a lot of life left in them, sad to say.

      • You're not asking the right questions, so you don't understand the motives. How do you control what people hear and still allow them all to speak? You monopolize the megaphone, then you put the people who are saying what you want heard in front of it.

        The economic "competition" was always a sham, it supported the illusion that time in front of the megaphone was based on merit, to more effectively sell the messages. Taxation without representation will still work though.

    • Re: (Score:3, Interesting)

      No amount of laws or regulations can overcome supply and demand in the long run. The RIAA relied on preferential laws and regulations to maintain their control over distribution. Recorded music has a near-infinite supply in terms of distribution online. Hence the price of it should fall to nearly zero

      I'm not so sure. I think it's a matter of the law. We have several laws, most of which are observed and obeyed that go against raw supply and demand. The most basic of which is stealing. By the same logic, we c

  • by Noryungi (70322) on Wednesday September 24, 2008 @05:05AM (#25133033) Homepage Journal

    What about the radios that don't make any profit?

    I am specifically thinking of SOMA FM [somafm.com] and WCPE [theclassicalstation.org]. I know that WCPE is a non-profit, for instance, and they are two of the best radios I know.

    Are these exempted or not? Does anyone know?

    • by fyoder (857358) * on Wednesday September 24, 2008 @05:11AM (#25133059) Homepage Journal

      What about the radios that don't make any profit?

      Revenue is what they bring in total. Profit is what's left after expenses. In other words, they want 10.5% off the top, regardless. And the RIAA doesn't have a history of sympathy for the argument "But I wasn't making any money off of the music I was sharing," so while it would be nice if they'd give non-profits a break, it would be out of character.

      • by Apple Acolyte (517892) on Wednesday September 24, 2008 @05:58AM (#25133281)
        I had to do a double take when I read 10.5% of yearly revenue. 10.5% of profits sounds excessive, but 10.5% off the top is outrageous.
        • Amateur (Score:3, Insightful)

          To lazy to google it, but there have been several breakdowns of the costs a label charges to the artist to account for the difference between the price of a CD and the amount the artist gets paid.

          Basically 10.5% of the sale price is just penauts. I am willing to bet quite a few RIAA execs choked on that before they could finally sign the agreement.

          In other industries, it would be a lot. In music, it is childsplay.

      • "Non-profit organisation" does not mean the organisation makes no profit. It means the organisation puts the money back into itself rather than paying out dividends etc. It doesn't mean they operate at a loss and require constant donations to remain functional.

        Some "non-profits" have even been run with the purpose of making its directors etc richer (eg they just jack up their salaries).

      • by SimonGhent (57578)

        What about the radios that don't make any profit?

        Revenue is what they bring in total.

        This is indeed a happy day. Not only a truly interesting story in the "Dark Flow" thread, but this reply.

        I read the summary and though "well, that sounds fair, 10.5% isn't a *huge* amount and it leaves the not-for-profits alone".

        Without this reply pointing out that this will be 10.5% of what even a non-for-profit has to bring in to cover the costs the injustice in this is hidden.

        The parent is the sort of post made for "in

    • by QuantumG (50515) * <qg@biodome.org> on Wednesday September 24, 2008 @05:14AM (#25133081) Homepage Journal

      Strangely, being a "non-profit" does not mean you are not allowed to, or even that you typically dont, make a profit. Being a non-profit simply means that the stated goal of the organization is something other than profits, and so the directors of the organization do not have to justify their decisions in terms of how much profit it makes for the organization. There's also different accounting regulations, like publicly declaring the assets and expenditures, etc.. and in exchange they get a tax break.

      • by DrLang21 (900992) on Wednesday September 24, 2008 @07:28AM (#25133711)
        Actually, being "non-profit" means that there is no profit in the business to be paid out to investors, directors, or employees. All "profit" is recycled back into the company. The directors can profit by increasing their salary when business is steadily doing better. Running a successful non-profit can be quite lucrative, but not nearly so much as running a successful for-profit.
    • I hate to sound like a supporter. But lets face it... It just adds to the cost of operation. This will happen to any NFP Organization. Oh Gas prices go up. They need to buy a car. Their equipment is out of date. Bandwidth costs increase, Then need to hire employees... NFP Organizations still need money. They still have expense and if you want to use their music you have to pay the fee. Its legally their music they should have some control. Just saying you are NFP doesn't really mean that much. A 1 man o

    • by houghi (78078)

      My cousin Vinny Corleone only charges 10% for protection. And here is the RIAA charging more for protection and they get away with it.

  • by $RANDOMLUSER (804576) on Wednesday September 24, 2008 @05:06AM (#25133037)
    Perhaps if there were some mention of what broadcast radio stations were paying for their tithe or per-song charges we could make a reasonable comparison. Somehow I doubt that all-talk/mostly-talk broadcast stations are paying 10% of revenues in tribute.
  • by Anonymous Coward on Wednesday September 24, 2008 @05:17AM (#25133099)

    We've all heard about RIAA tricks to scam the artists out of their fair share. Like taking a percentage of revenues for 'breakage' based on the rates of vinyl records breaking in shipping even though CDs are much more sturdy and MP3 downloads are impervious.

    So I suggest the radio stations change their business models to run revenue-free. Like becoming an ancilliary service that does not generate revenue under normal conditions - like you can pay a fee so outrageous for the radio service that no one in their right mind will pay it, or you can get it 'free' as part of membership (paid or advertising-supported, or some other scheme) with some other web-site or service provider. Let the free-radio and the revenue-generating service be subsidiaries of the same parent company and you are all set.

    Of course I am writing this without actually reading the details of the contracts - those MAFIAA lawyers are really good at putting together contracts that fuck the other guy in novel and unexpected ways, so anybody trying to fuck them back needs to pay real close attention to the details.

  • About time (Score:5, Interesting)

    by Auckerman (223266) on Wednesday September 24, 2008 @05:19AM (#25133111)

    Profit motive is a fascinating thing. It's not in the RIAA's best interest for web radio stations to go offline, because they generate no money from web radio that way. Whatever they charge is going to be the highest possible without alienating their customer base, which is the web broadcasters. It took them long enough to finally admit that their pricing was extraordinary to say the least.

    I do find it fascinating that the major labels, via "Independent promotors" actually pay radio stations to broadcast specific songs, whereas they do no such thing for web radio services. I would think that something like the web radio in iTunes would be a perfect target for this.

  • by SupremoMan (912191) on Wednesday September 24, 2008 @05:20AM (#25133123)
    Is that their monthly fee?
  • by calmofthestorm (1344385) on Wednesday September 24, 2008 @05:45AM (#25133229)

    I read TFA and something is seeming strange to me.

    You pay 10.5% of all revenue to the MAFIAA. Does that mean that they're waiving the current royalties? Or is this tax in addition to the old royalty rate?

    If this is all they pay does that mean I can:

    * Stream RIAA music all I want if I don't make any money?
    * Broadcast it DRM free?
    * Get from the RIAA their music to play?

    Clearly I'm missing something big somewhere, 'cause there's no way the RIAA would allow that chain of events.

    • by IBBoard (1128019) on Wednesday September 24, 2008 @06:17AM (#25133375) Homepage

      Taking the definition of "revenue" then you'd only be able to do that if you didn't bring in any money at all, not if you don't make money (profit). Even then I suspect they might have other ways around it (like not selling the music to you in the first place and then enforcing copyright/DMCA legislation on the CDs that you probably got the music from).

      It'd be great if some rich person did put their money towards a station that brought in zero money (including no ad revenue) though!

      • by Ihmhi (1206036)

        I wonder what the cost of a single slot in a Shoutcast server is.

        Let's say a single Shoutcast slot ends up costing $1 a month, or $12 a year. A 100 slot Shoutcast server would cost $1200 a year. If that was their revenue, the RIAA would be making $126. That's not really a whole lot.

        The way bandwidth and disk space is going, it's gonna be cheaper and cheaper to run Internet radio.

  • by Anonymous Coward on Wednesday September 24, 2008 @05:48AM (#25133239)

    Sorry for posting as AC but I just would like to point out that this agreement is only for On-Demand services and not pre-programmed web radio services (which most web radio stations are).

    So for most stations this does not change anything and the insane royalty rates that threatens the whole web radio industry is still very much in place.

    • by BlueStrat (756137)

      Sorry for posting as AC but I just would like to point out that this agreement is only for On-Demand services and not pre-programmed web radio services (which most web radio stations are).

      So for most stations this does not change anything and the insane royalty rates that threatens the whole web radio industry is still very much in place.

      Good point, and great catch. As usual, the /. summary is vague and misleading.

      Mods, please bump this up, kthnx.

      Cheers!

      Strat

    • Yup, I was quite surprised by this story since the Ars headline yesterday was something along the lines of 'no new agreement for internet radio' when it showed up in my RSS feed. Apparently the submitter and the 'editor' didn't RTFA.
    • Mod Parent Up (Score:5, Informative)

      by rsmith-mac (639075) on Wednesday September 24, 2008 @07:19AM (#25133661)
      He's spot-on [pcmag.com]. This agreement only covers services such as Imeem, Last.fm, and Napster, which are based on streaming individual songs. It does not cover services such as Pandora, AOL Radio, or Digitally Imported, which stream pre-programed/tailored stations like a meatspace radio station does. Those guys are still fighting to avoid having to pay the massive $0.0019/user/song that the Copyright Royalty Board passed down last year. Generally when people are talking about internet radio they are talking about these services, so internet radio is not saved.
    • by Atnevon (829277) on Wednesday September 24, 2008 @07:44AM (#25133811) Homepage
      I read about this yesterday on Betanews actually and headed to the source (DiMA to take a closer look). There's actually *even better* news in the agreement for non-interactive services: "Outside the scope of the draft regulations, the parties confirmed that non-interactive, audio-only streaming services do not require reproduction or distribution licenses from copyright owners." Hard to believe, I know, but take a look: http://www.digmedia.org/content/release.cfm?id=7243&content=pr [digmedia.org]
  • Netradio is ok, personally i prefer to use an AM/FM Stereo Receiver for music. (PC plugged in to the aux in)
    http://imagebin.org/27185 [imagebin.org]

    What the RIAA is doing amounts to extortion, the sooner the MPAA/RIAA dies and the copywrite gets reigned in to sane levels the better this will all be...
  • by Anonymous Coward

    TFA is vague but it sounds like there's no meaningful way for an artist to have these fees waived and, to top it off, those non-member artists aren't going to get any money from it anyway. Sounds like a great way to prop up the 'ole cartel.

  • 10.5%?!? But GOD only gets 10%?!? The RIAA out-tithed the Holy Tither!

  • ... a "vig"?

    Pay your vig, you get protection. Don't pay your vig, we break your kneecaps and destroy your place of business.

  • RIAA or MAFIA? (Score:5, Insightful)

    by TheCybernator (996224) on Wednesday September 24, 2008 @07:07AM (#25133593) Homepage
    Seriously. RIAA is acting like a mafia. Asking for a flat cut as protection money. Civilized extortion.
  • by oDDmON oUT (231200) on Wednesday September 24, 2008 @07:13AM (#25133629)

    It's the RIAATithe©.

  • RIAA: So's like youse punk wit yer fancy fuckin' internet is like hornin' in on our little operation, ya see? And we don't like that kind of fuckin' bullshit, because dis wuz our game, since like forevah, you got dat, fucker? And since we got all da money, and youse punks ain't nuttin' but a bunch a snotty surfer upstart assholes, and since we got da guvmint on our payroll they like supply all the guns and muscle we need to keep our little operation goin', so's youse stupid little fuckin punks are gonna PAY
  • by Dan667 (564390) on Wednesday September 24, 2008 @08:33AM (#25134241)
    Really if you want to stop the RIAA you need to start posting hate on the companies that support it. Once you start to hurt their brands and people stop buying their products because of the negative press, and the RIAA will cease to exist. Everyone hates the RIAA, but no one hates those who fund it yet. So hate on these companies.

    SONY
    WARNER
    EMI
    UNIVERSAL ...
  • How much of that will go to artists? apparently none since no one is keeping track of the artists whose music is played.

    Nope, this is more payola. Fat Tony wants 10.5% of the take for your continued ability to play music without issue.

    Notice, it says 10.5% of the yearly revenue. Not yearly profit.

    Yep, this is bad for artists and bad for consumers and bad for everyone except the RIAAfia

  • by JustNiz (692889) on Wednesday September 24, 2008 @09:52AM (#25135193)

    There are milions of excellent bands trying to make it out there. Most can't get airtime because the RIAA also have control over radio stations and their playlists, so will only allow their own manufactured poptastic crap to get any airtime.

    If I was an internet radio station I'd tell the RIAA to go screw themselves and that _they_ should be paying _me_ for airing (read: advertising) their music. I would only play music from independent bands and musicians who haven't signed up with RIAA-linked labels so the RIAA have no legal recourse to do anything.

    The bands themselves would probably more than welcome the opportunity to get some free airtime/plugs for their music and maybe sell a few CDs or downloads through the site.

  • by russotto (537200) on Wednesday September 24, 2008 @10:13AM (#25135491) Journal

    For webcasters, the bad news is the RIAA is taking 10.5% of their revenue. The good news is that they've got the MPAA's accountants to do their books...

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