May 09, 2007

Support H.R. 2060; Save Internet Radio.

For those of you who are new to the issue, there's a nice background piece by Michael Minn here:

In 2005, the digital royalty was 0.07 cents per song streamed (per listener) and small webcasters were able to calculate royalties as a percentage of revenue rather than on a per-song basis. This made it possible for small, often niche, webcasters with limited revenue streams to be financially viable, although most webcasters did it for love rather than money and usually lost modest amounts of money on their webcasting ventures. A typical small Live365 webcaster paid around $600 per year in digital royalties.

On March 2, 2007 the Library of Congress' Copyright Royalty Board (CRB), which oversees royalty rates, got rid of the revenue-based royalty provision, mandated a minimum royalty of $500 per channel per year, and established a higher royalty rate that will increase to 0.19 cents per song streamed per listener in 2010. For a webcaster that broadcasts 15 songs an hour to 500 listeners, that will increase the royalty to over $72,000 a year in 2010. For the six largest Internet-only broadcasters (who are financially marginal, at best), the royalty increase will represent over 50% of their total income. Pandora.com's founder, Tim Westergren, told Newsweek, "If this stays, we're done. Back to the stone age again." My favorite station, JazzPlayerRadio, has already left the web because the new rates will be applied retroactively to the first of the year.

Lest you think that some stations could survive by webcasting music from independent labels and producers, the RIAA has secured legal authority to administer a compulsory license that covers ALL recorded music. This means SoundExchange can force a royalty payment for ALL webcast music, with the provision that an independent label or artist can then join SoundExchange (for a significant fee) and get the money that was extracted on their behalf.

And for you NPR fans, this affects you. NPR is spearheading the effort against the new royalty because they have a significant number of listeners via the web. The new rules would be an accounting nightmare for them because only a portion of their programming is commercial music, but figuring out who is listening when a Justin Timberlake bumper plays on All Things Considered is really hard. For more details on NPR's role in this, see this article on NPR's initial appeal of the royalty increase.

From Mary McCann, Radio IO's The Bone Mama (as well as my sister-in-law, and felow PT Cruiser owner) come these ideas for nullifying the Copyright Royalty Board's decision:

An Easy "How-To Guide" for Making that Fateful Phone Call:

On March 2nd the Copyright Royalty Board set the rates that internet radio must pay for the years 2006-2010. My company and similar-sized operations will go from paying 11% of our revenues to 294% of our revenues, which means we will be upside-down unless HR 2060 passes. The first payment is due on July 17th, so immediate attention is desperately needed! This is a death match for the beautiful medium of internet radio. The issue is access to the net and audiences for artists—not to mention my access to rice and beans. I'm asking you to make a phone call. It really makes a difference!

We have 51 sponsors today; there were only seven 10 days ago, before we went to Washington, D.C. One rep from Arizona is on board, and thatís all from that state. There are a handful from California, including the representative for Marin County, and we have a good early showing from Illinois. The bill is bipartisan: it was started by a guy in Washington state, Rep. Jay Inslee. You can look here to see whoís on board.

Call your Representative's office in Washington, D.C.—or call your local office in the case of your own representative. Ask to speak to the staffer who handles copyright or Internet issues. (If you enter your zip code at http://www.congress.org, theyíll give you your reps name and numbers.) They are used to people who don't call them for a living, and they're very easy to speak with. On the other hand, we have word that certain senators with ties to big record labels are blocking the IP of our coalition site. This is one of the reasons that e-mail is not a good option for working on this issue.

Here are some of the coalition's script ideas. Mix it up, but the main goal is to ask the reps for co-sponsorship. You really will be saving Internet radio—and my job in this baby industry.

1) "I am a constituent, and Iím calling to ask Congressman/woman ________ to save Internet radio by co-sponsoring H.R. 2060, the Internet Radio Equality Act."

2) "The Copyright Royalty Board's decison to increase royalty rates for webcasters is going to turn off my internet radio, and I do not want that to happen. Please ask Congressman/woman ________ to co-sponsor H.R. 2060, the Internet Radio Equality Act."

3) "I believe artists should be compensated fairly for the music they make, but putting my webcasters out of business will only hurt artists more. They depend on Internet radio to get their music out to fans and build new audiences. When the webcasters go off the air, so do artists. Please co-sponsor H.R. 2060, the Internet Radio Equality Act."

4) "Internet radio is one of the only bright spots of diversity for independent music. We need internet radio. Donít turn it off. Co-sponsor H.R. 2060, the Internet Radio Equality Act."

5) [If you are an artist] "Internet radio enables artists like me to reach fans throughout the country and the world, and enjoy exposure and airplay that we might not receive otherwise. I'm asking you to co-sponsor H.R. 2060, the Internet Radio Equality Act."

Or my least favorite: 6) "My friend Mary McCann will be out of a job unless H.R. 2060 passes, and then she won't be able turn me on to fabulous artists any more. I mean, where else can a person with the handle of The Bone Mama get a job? As a geisha?"

One of the artists who lobbied with us on the Hill, SONiA, had her manager run the numbers for promoting her next tour, should H.R. 2060 fail to pass. Without the support of Internet radio those costs would go up 600%.

Broadcast radio does not even pay this copyright fee. They are exempt; satellite radioís rate has been locked in at 7.5% of their revenue for this same time period. We arenít even asking for broadcast radioís rate, but simply parity with satellite radio—hence, the name: the Internet Radio Equality Act.

Thank you, from the bottom of my heart.

She is from Illinois, and our family members live mostly in the Upper Midwest and on the West Coast—that's why she focuses on Western States and Illinois in this guide. But the problem is national in scope—and, by implication, international, given the leadership role the U.S. has in internet development, and the fact that internet radio transcends national boundaries.

It is hard to see this as more than a naked power grab from those in broadcast radio who want to retain their monopoly. Please don't let them get away with it: support H.R. 2060. And hurry: this may come up for vote in the next few days.

More here.

Posted by Attila Girl at May 9, 2007 03:25 PM | TrackBack
Comments

This power grab thing is absolutely disgusting.

Posted by: k at May 10, 2007 02:29 AM


(1)How does this royalty scheme compare with the royalties paid for over-the-air transmission?


(2) "RIAA has secured legal authority to administer a compulsory license that covers ALL recorded music"...if this means what it sounds like it means, then it is absolutely unjustifiable and represents, in effect, a government-authorized antitrust violation.

Posted by: david foster at May 11, 2007 01:58 PM


Of course, Ayn Rand always maintained that all trusts were set up by the government (e.g., most railroads).

Posted by: Attila Girl at May 11, 2007 10:10 PM


Actually it's not a power grab by broadcast radio at all. This is bad for broadcasters and webcasters alike, because many broadcasters are webcasters too. In reality the RIAA wants to kill streaming radio.

I work for a broadcast group in Seattle with 5 stations and we're hoping this bill passes. If it doesn't, we'll have to stop webcasting.

Posted by: Chris M at May 12, 2007 10:04 PM




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