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Music Media The Almighty Buck The Internet

A Commonsense Proposal On Net Radio Rates 94

quark235 tips us to an open letter to the RIAA, proposing a fairer royalty structure for Net radio, written by Paul A. Gathard. Gathard is president of Barnabus Road Media, a company that provides streaming radio services to commercial and non-commercial stations across the US. He contends that his proposed rate structure, if implemented, would actually result in higher total revenues to SoundExchange than their current proposal would, after it kills off 90% of Net radio stations.
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A Commonsense Proposal On Net Radio Rates

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  • Not the point. (Score:5, Insightful)

    by Hsensei ( 1055922 ) on Thursday August 16, 2007 @04:07PM (#20253565) Homepage
    Isn't the whole point to kill off 90% of internet radio?
    • by Anonymous Coward on Thursday August 16, 2007 @04:23PM (#20253743)
      ..I almost hope they succeed in killing off "legit" Internet Radio. The Internet could really use a nice dose of the good old Pirate Radio [wikipedia.org] culture.
    • yeah, so they pressure regular radio, in part, by pointing to the insanely high rates per listener for net radio [even if there are only a few remaining "stations" still operational].
    • Re: (Score:3, Insightful)

      Isn't the whole point to kill off 90% of internet radio?

      True, but this might just weaken their case a little bit. The whole premise of the RIAA has been that Net Radio hurts the artists. If you can show, with some accounting integrity and verifiability, that an alternative scheme would allow for both higher royalties *and* the existence of net radio, then a reasonable judge (or congress hopefully) would be less willing to summarily grant the ridiculous new royalty rates. In other words, it forces the RIAA

    • Yeah, I'm convinved you're right; the goal is to kill off 90% (or more!) of internet radio. The RIAA's goal is to preserve itself by making sure that there's no alternative to the music they offer. If anybody can be a webcaster, and a number of webcasters play independent, non-RIAA music, more people will be aware of -- and buy -- independent, non-RIAA music. The RIAA's solution is to shut down outlets for independent, non-RIAA music, and preserve a relative few, highly concentrated outlets [google.com] which the RIAA [google.com]
    • Isn't the whole point to kill off 90% of internet radio?
      No - the whole point is to kill off 90% of internet radio based in the USA

      Anybody interested in Canadian co-location services?
  • I think I know a good amount most net radio stations should be paying... $0

    I still can't believe SoundExchange has the right to do what they're doing.
    • by CaptainPatent ( 1087643 ) on Thursday August 16, 2007 @04:36PM (#20253881) Journal

      I think I know a good amount most net radio stations should be paying... $0

      I still can't believe SoundExchange has the right to do what they're doing.
      While you do have a reasonable point when considering independent material which is placed on the internet specifically to be openly available to everyone, there is a distinct problem when dealing with copyrighted material. Additionally I feel that the root of your post deals with SoundExchange making money off of material that isn't specifically theirs which I do agree is a problem. I do feel however, that your post deals with the issue in the incorrect manner.
      In the music industry anymore there are so many middlemen and markups that everyone is being charged way too much and it seems like the profits are going to everyone except the artist. I feel that internet radio playing music under copyright shouldn't be free, but the ad revenues should go directly back to the artists and not the scum (like SoundExchange) that are trying to make something from nothing. There are advertisers and such along the way that actually provide a valuable service which increase the overall cost, but other than that the music industry has reached the point of ridiculousness.
      • Re: (Score:3, Insightful)

        by cayenne8 ( 626475 )
        "While you do have a reasonable point when considering independent material which is placed on the internet specifically to be openly available to everyone, there is a distinct problem when dealing with copyrighted material. Additionally I feel that the root of your post deals with SoundExchange making money off of material that isn't specifically theirs which I do agree is a problem. I do feel however, that your post deals with the issue in the incorrect manner."

        Wait a minute. Are you saying that ANY str

        • Wait a minute. Are you saying that ANY streaming audio (video too?) on the internet is subject to paying SoundExchange? What if I am streaming my own personal music? What about if a band I'm in, streams out songs (assuming unsigned band)? Can I be reading this correctly? I find it hard to believe that if I stream audio that isn't copyright protected...I have to pay anybody squat....

          um, his point is radio should be free, I agreed with is point in that case. In summary, no, you aren't reading that correctly.

        • by fritsd ( 924429 )
          Not ANY streaming audio, just in the USA I thought. The world is thankfully a little larger than that.
      • The big problem I have with these "protect the artists" groups is who actually gets the money. If I have an internet radio station that only plays Wham!, why should any other artist get paid a random amount of money. Dammit, George Michael and Andrew Ridgeley should get paid! SoundExchange, Klaus Meine, Calvin Broadus, Jr, and Amy Winehouse should keep their hands to themselves.

        In this day and age, computing costs by individual song played shouldn't be a big deal.
    • I think I know a good amount most net radio stations should be paying... $0

      Why? If they are playing copyrighted music, why should they not follow the same rules as the commercial stations?

      Most of the sites that I've been to have some form of advertising. If they are using music to bring people to their site and they are making money by ad views, their purpose is not a whole lot different than commercial stations. They just make a bunch less money at it.

      If the sites make money - over and above operating cos

      • Why? If they are playing copyrighted music, why should they not follow the same rules as the commercial stations?

        and if they aren't playing copyrighted music?
      • "If the sites make money - over and above operating costs - their hold on the moral high ground is a bit shaky."

        What if Joe Sixpack just wants to stream music off his site...for free? No revenues collect at all? No ads, just doing it for fun?

        • That's a tough one, but it kinda falls under the "not making any money at it" clause - at least to my point of view. Which means less than nothing to the licensing groups.
      • by QRDeNameland ( 873957 ) on Thursday August 16, 2007 @05:46PM (#20254665)

        Why? If they are playing copyrighted music, why should they not follow the same rules as the commercial stations?

        OK, do you know how much over-the-air commercial radio stations pay to the RIAA for recording royalties? It *is* $0.

        It seems to be a little known fact, but regular over-the-airwave radio, since its inception, has only had to pay songwriting royalties (i.e., those collected by ASCAP, BMI, and SESAC) for any songs they broadcast, but have never had to pay recording royalties ("mechanicals", in the trade). Why? Because it was always seen as a mutually beneficial arrangement: the radio station gets to sell advertising time over free use of the recordings, the copyright holders of the recording get free exposure which helps them sell records.

        The whole point here is that they *do* want different rules for internet radio...that the RIAA thinks internet radio *should* pay mechanical royalties over-the-air broadcasters don't, and they've been doing this for over 12 years now, and it most definitely *has* hurt internet radio.

        • Then my first statement still applies - just a bit differently.

          If commercial radio stations aren't paying any royalties or fees, then the Internet radio stations should be given the same consideration.

  • by leventhal ( 1092007 ) on Thursday August 16, 2007 @04:12PM (#20253607)
    They've already got the net radio groups between a rock and a hard place. They haven't started collecting yet but they're pushing for DRM and baiting with reduced rates for small broadcasters [arstechnica.com].
  • by AVee ( 557523 ) <slashdotNO@SPAMavee.org> on Thursday August 16, 2007 @04:13PM (#20253631) Homepage
    It is all about control, not about net income. So killing 90% of the web radio stations is better than a higher income because it is easier to control a few radio stations and because those pesky small independent stations will be the first to go down.
    When that has been dealt with the income issue will be revisited. Raising income is a lot easier when your monopoly is still intact, maintain the monopoly and the income will come anyway. Currently it is the monopoly that is being defended and any plan which does not include maintaining the monopoly is a bad idea, even when it increases revenue.
  • by Fallen Kell ( 165468 ) on Thursday August 16, 2007 @04:24PM (#20253747)
    We already know that the reason for the extremely high rates are because the RIAA really wants this simply to have DRM used on the streaming stations. That was already proved in recent negotiations over the rates. Since the RIAA's lobbying efforts in having the FCC mandate DRM onto the medium failed, they are now trying to do the same thing by forcing licensing fees that are extremely high on the stations.
  • If the proposal is, indeed, a "fairer" way to charge stations I don't see any indication that the RIAA would be interested in accepting the notion. "Fair" or "reasonable" doesn't seem to be part of how they operate [theregister.co.uk].
  • please, none of this understanding the details or technological change or economic nuance...

    if we have a problem: sue sombody!

    problem solved, end of story
  • by DimGeo ( 694000 ) on Thursday August 16, 2007 @04:32PM (#20253817) Homepage
    The summary of the article reminds me of this priceless Idiocracy quote:
    "Joe stated his case logically and passionately, but his perceived effeminate voice only drew big gales of stupid laughter."

    http://www.youtube.com/watch?v=b2izZYZVhEA [youtube.com]

    I rest my case.
  • I don't think this is idea of giving the RIAA other fairer options is going to work. I don't beleive for one second that the RIAA has not looked through all their options- including fair ones, liberal ones and harsh ones and resolved upon this- giving them a strongly worded letter trying to persuade them wont work, they know this isn't fiar. Basically, they want pay per listen because theats what they'd like to do selling their music and is just another step in that direction.
  • And in France? (Score:2, Interesting)

    I wandered across a pretty spiffy net radio site.. Ill spare the site from slashdottedness.. and thought to myself, well, theyll be gone soon. They offer low quality free streaming and high quality paid streaming around 15 bucks a year. I decided to see what the EULA said and found it was all based (at least company-wise) in France. If I recall correctly (which is a stretch) I recall France being very liberal with online music and formats and whatnot. I would think more net radio would just wander to more h
    • by Dan667 ( 564390 )
      What is the url. Might as well start looking off shore as I do not have very much confidence in the US Congress helping this situation.
      • OK.. I guess Ill not listen for a few days.. musicovery.com

        I am in no way affiliated with them.

        The only prob I find is their application (flash) hanging every so often.. but youll see its worth their novel approach.

        Let the server overload begin..sigh..lol
  • The rates should not be per-performance, but per-minute. So if the station plays a given song, it will pay based on the length of the song times the number of listeners. This matches well with advertising being a consistent amount for a given amount of time, so it should track with the revenue that the webcaster would be seeing.

    I do agree with the argument that the webcasters should be providing more detailed information on what is being played. That would give more accurate distribution back to the arti
  • Can't a web radio station continue to operate without paying royalties as long as they stick to independent labels? What is the history of indie labels enforcing radio royalties and such?

    I say let them raise the rates and then spread the word that internet stations just need to avoid all labels in the RIAA to avoid getting slammed.
    • This is the solution to this insanity on so many levels..
    • by multisync ( 218450 ) on Thursday August 16, 2007 @04:56PM (#20254081) Journal

      Can't a web radio station continue to operate without paying royalties as long as they stick to independent labels?


      No. The royalties are collected for all songs played, even those from independent labels. Independent artists have the option of registering with SoundExchange so they may receive royalties collected on their behalf, less SoundExchange's fee.

      • by RingDev ( 879105 )
        There has to be some cut off though... I mean, talk radio doesn't pay a SoundExchange fee... do they?

        -Rick
        • There has to be some cut off though... I mean, talk radio doesn't pay a SoundExchange fee... do they?


          They do if they play music.

          And, by the way, no "radio" stations pay these royalties, only web stations. You probably knew that, but if you didn't, you do now.
          • And, by the way, no "radio" stations pay these royalties, only web stations. You probably knew that, but if you didn't, you do now.

            Thank you...I pointed this out upthread. Even with all of the anti-RIAA sentiment on /., the fact that over-the-air radio does *not* have to pay any royalties to the RIAA seem to get completely lost in this discussion.

          • by RingDev ( 879105 )
            Wow, thanks for the heads up. I thought they did have fees, but they were based on revenue and had an insignificant impact on the overall cost of station opperations.

            -Rick
      • So then net radio stations should just stay away from SoundExchange artists altogether and find a way to deliver royalties directly to the artists that are left.
        • Re: (Score:3, Informative)

          by multisync ( 218450 )
          The Digital Performance in Sound Recordings Act of 1995 and the Digital Millennium Copyright Act of 1998 grant the copyright holder of the "performance" of a song the right to collect a royalty each time that "performance" is played on an Internet webcast. It doesn't matter whether the copyright holder is a member of SoundExchange or not, the royalty is collected regardless.

          An artist apparently may choose to negotiate deals with webcasters. I am not sure exactly how this works, but it would require the webc
          • I've speculated about this before, but could webcasters switch to playing only Creative Commons licensed music? Wouldn't the Creative Commons agreement constitute a contract between artist and broadcaster, thus bypassing SoundExchange?
            • Rights holders and webcasters apparently have that option, but I don't know how it works, and whether the royalties would not be collected at all, or if you would have to apply to SoundExchange to be reimbursed for fees that are obviated by an existing agreement.

              This also reminds me of discussions I read here re: the Zune attaching DRM to music files you "squirt" to your friends, regardless of the wishes of the copyright holder who may have licensed the work under something like Creative Commons.

              Another thi
              • Rights holders and webcasters apparently have that option, but I don't know how it works, and whether the royalties would not be collected at all, or if you would have to apply to SoundExchange to be reimbursed for fees that are obviated by an existing agreement.

                Here's how I envision it working:

                SoundExchange: You owe us [unholy sum] based on the number of listeners and number of songs broadcast.

                Webcaster: Here's a copy of the agreement we have with the artists we broadcast. Shows Creative Commons li

      • by shish ( 588640 )

        The royalties are collected for all songs played, even those from independent labels.
        I'm tempted to set up a web radio station playing nothing but music I've composed and played myself, then wait for them to take me to court. But then I can't afford a team of well paid lawyers, so they'd probably win :-/
      • by Svartalf ( 2997 )
        Which is actually bogus. If I, an Indie, WISH to have my music given airtime without royalties, then it SHOULD. If I've got arrangements with the performers I'm streaming over the wire, I shouldn't HAVE to be required to participate in that racket- which is all this is.
        • Re: (Score:3, Insightful)

          by multisync ( 218450 )

          I shouldn't HAVE to be required to participate in that racket- which is all this is.

          You don't. I over-stated the rules in my earlier post, as was pointed out here [slashdot.org] An independent artist could negotiate deals with webcasters and I suppose notify SoundExchange that they do not wish royalties to be collected on their behalf (or maybe the webcaster would advise SoundExchange of which artists they have deals with, I'm not sure exactly how it works).

          It would be a lot of work for independent artists who either repr

      • Can't a web radio station continue to operate without paying royalties as long as they stick to independent labels?

        No. The royalties are collected for all songs played, even those from independent labels. Independent artists have the option of registering with SoundExchange so they may receive royalties collected on their behalf, less SoundExchange's fee.

        There is nothing that prevents Independent labels from writing their own contracts with internet radio station which explicitly block SoundExchange from collecting fees.

        • Yes, as has been discussed elsewhere in this thread, any station may negotiate their own agreements with the rights holders of the performances they play and bypass SoundExchange.

          Whether or not a commercial or listener-supported station could sustain itself by exclusively playing performances they have negotiated separate deals for is another matter, but technically, yes they have that choice.
    • So far as I understand, no. Not without incurring headaches. SoundExchange will still try to collect royalties
      to pass on (minus handling fees). That's one of the major sticking points here, they're tied to the RIAA but
      claim to be acting on everyone's behalf.
  • by overshoot ( 39700 ) on Thursday August 16, 2007 @04:48PM (#20253989)

    He contends that his proposed rate structure, if implemented, would actually result in higher total revenues to SoundExchange than their current proposal would, after it kills off 90% of Net radio stations.
    Yeah, but would his proposal accomplish the RIAA's main objective, which is killing off Net radio?
    • Besides which, sound exchange is supposed to be non-profit. The revenue should only cover operating costs. The more stations to administrate over, the more operating costs.
  • by msimm ( 580077 ) on Thursday August 16, 2007 @04:53PM (#20254049) Homepage
    When the answer is simple (complex). You either rely on the whims and foresight of another (bad business strategy) or you chose your own route. The RIAA holds its control over the net radio market by a hair. Simply because no-ones really challenged them, on their own ground.

    Begging is going to get you very little, but working directly with the very labels and artists in an organized fashion and you'll be able to by-pass the RIAA in this regard (largely) altogether. Setup a foundation to be a industry friendly clearing-house to handle limited blanket licensing in terms the industry finds acceptable. Most labels want protection (from piracy and misuse) but also want exposure. With a little will (and funding) I think there would only be a few majors that would hold out. The same ones that want the market to be smaller in the first place. Which really would be a win-win. RIAA exclusive labels/artists could limit their exposure and practice the same kinds of influence they've become accustomed to. Smaller or more open labels and artists could continue to gain exposure and change the very markets the RIAA is trying to limit.
    • Setup a foundation to be a industry friendly clearing-house to handle limited blanket licensing in terms the industry finds acceptable. Most labels want protection (from piracy and misuse) but also want exposure.

      I recently registered broadcastbroker.{org,net,co.uk,org.uk} with exactly this in mind. Please get in touch if you're interested in taking this further.

      • Probably if I was still in my twenties. Something like this would either take massive amounts of work (read: loads of free time and thankless dedication) or lots of capital (which is the direction I think it would need to go, to sell it and provide a level of confidence to an industry that relies on lawyers and contracts).

        Not that I'm trying to be discouraging. It may well be easier then all that or maybe you've worked out a great way to make it happen (or maybe you're just dedicated enough). I already wo
  • Greedeo killed the Net Radio Star!
  • Wide Response? (Score:2, Interesting)

    by RetroGeek ( 206522 )
    First of all I would never, ever, advocate this.

    However, as a talking point:

    Consider if the ripping of CDs was not done, as it currently is, in a small casual fashion. What if the entire Internet community made a concerted, extensive, and prolonged effort to copy and post CD tracks?

    Not just the few thousand or so which currently do it, but millions?

    Do you think that would get anyones attention?
  • by zzatz ( 965857 ) on Thursday August 16, 2007 @05:27PM (#20254469)
    Not the radio listening audience, the audience for the open letter.

    The author isn't trying to persuade the RIAA to be fair, that's impossible. That's why he wrote an open letter; a letter to the public ostensibly addressed to, but not really intended for, the RIAA.

    The music business and its RIAA front will not change their agenda. They've given Congress their marching orders, accompanied by bales of money. Politicians understand that voters often vote for the candidate with the largest budget for ads. And it's not just the direct campaign contributions, it's that most of the music business is owned by media companies, the companies that own the TV and radio stations, newspapers, and even web sites that politicians advertize with. Why do you suppose that newspapers NEVER challenge the RIAA spin on any story?

    The letter is intended for the public, and voters in particular. Politicans need cover before standing up to the RIAA. When voters write and call, that helps counter the RIAA fundraising. Float a fair and reasonable proposal, and shift the burden to the RIAA of explaining the RIAA plan.

    Write or call your elected officials. Many would like to do the right thing. Give them hope that doing the right thing won't end their careers.
  • My music is traditional (pre-1950) jazz, sometimes called Dixieland. Most of the CD's in my collection were purchased directly from the bands during live performances or came from labels that are not RIAA members. Money paid to RIAA's royalty collecting entity does not go to those bands or labels unless they join the entity at substantial cost, most likely exceeding the value of joining.

    Very little of the money paid to RIAA that is supposed to go to artists and songwriters actually gets to traditional jaz
  • by pravuil ( 975319 )

    I listen to this station a lot ( Radio Kansas [radiokansas.org]). They have several local programs that can't be heard anywhere else. It's wonderful programming but the funding comes from community support (i.e.: contributions). As stated on their online streaming service:

    Music rights holders and streaming radio stations continue to negotiate fees and documentation procedures. The additional paperwork may include data on listener usage and musical performances that our current system simply cannot provide. We will restore

  • by Anonymous Coward
    From: senator_obama@obama.senate.gov
    Date: Aug 11, 2007 5:50 PM
    Subject: Message from Senator Barack Obama
    To: f@1c0bird@gmail.com

    Thank you for conveying your strong feelings about the Recording
    Industry Association of America (RIAA) and their contributions to
    political candidates.

    First, as a candidate for president I do not accept contributions
    from any federal lobbyists or political action committees. Thus, I
    have not accepted any contribution from the RIAA for this campaign.

    Second, I fu
  • I don't know if anyone else here has noticed, but I had been listening to Podcasts of some music programs from broadcast radio-- as they essentially allowed me to time-shift programs that I otherwise would miss. Once SoundExchange extortion appeared, these podcast posts on the radio station websites dried up.

    However, while I'm disappointed I can't listen to those radio programs anymore, I'm thinking this could ultimately end up being a boon to free independent music streams that aren't connected to broad

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