The future of internet radio

[BiG D]

As a few of you are probably aware, internet based radio stations are in a bad way. If you're not, this will explain what's going on much better than I possibly could. Simply put, come July 15th many internet radio stations will owe millions (or in a few cases, billions) of dollars in royalties, marking anywhere from a 300% to 1200% increase to what they were paying before.

Some questions to (hopefully) prompt a discussion:

Why is some company allowed to represent all "artists," even those with no ties to a label?
Have internet radio companies just been getting off easy the last few years, and it has finally caught up with them?
What is a fair way to charge radio stations that profit from playing people's music? And how to we make sure this money is getting to the artists that deserve it?
And lastly, why is this portion of the internet charged when it uses copyrighted material, but other sites (ebaum's world leaps to mind) make thousands by using other's work without permission and without royalties?

 

[Traxata]

because some jock decided he wants to make money on other peoples work, and will end up forcing stations to close :[

 

[Dragon]

I just don't get why they even pay them, I mean, how can they force those net radio stations to pay?

 

[Ronin Storm]

The aspect of this entire situation (debacle?) that I find most interesting is that none of the media reports and editorials I've read support the CRB's (exorbitant) fees and all, in one way or another, lambast these changes. Some point out that Internet Radio should have seen this coming after the warm up battle in 2002 though, personally, I feel it should be illegal to charge retroactive fees; if you screw up and realise that you've under-priced a product or service then you take it on the chin and learn to do better next time. I have no idea how it can possibly be justified that anyone can make up fees and charge them after the fact. How about I acquire some sort of license for paper-clips or staples and then charge everyone for every item used in the past hundred years? Thousand years? Since the dawn of civilisation? That's pretty much the same arbitrary fee model and just about as justified.

As far as I can tell, though, the CRB aren't representing artists; they appear to be representing the RIAA, in fact. Who stands to gain from increased fees? If we follow the money, how much actually makes it back to the people who actually write or perform the music we love? And how much ends up in corporate pockets, greasing the wheels of the mainstream pop factories generating the same sounds over and over?

I find it interesting that Simson, of SoundExchange (the body who will be collecting the fees decided by the CRB) chooses to liken the wish to broadcast Internet radio with expensive hobbies such as golf and fishing; he indicates that participants in those two hobbies spend more than $500 annually on their hobby, so why shouldn't hobbyist Internet broadcasters... that assumes, of course, that these broadcasters would have had the funds to play golf or go fishing instead, which I assert they largely (almost universally?) wouldn't.

A very small number of people stand to get very rich off these changes. Will the performers that SoundExchange (partly) represent receive nearly triple royalties as a result? I'm betting they'll see a tiny increase and the rest of the funds will end up in CEO pockets.

I wonder how long it'll take, if all this goes through, for the RIAA to flex its insidious reach into Europe-based Internet broadcasters and start demanding ridiculous fees from them too? A lot of the artists I listen to are based in Western Europe and with small European labels (e.g. Out of Line). Does the CRB/SoundExchange claim to represent them too?

When this last kicked off, a settlement was reached at the eleventh hour. I'm hoping that this will happen again. There's movements in the US Congress that might work to overturn this madness... but it might all come too late.

Perhaps we were all better off with pirate radio anyway?

 

[PsiSoldier]

Hmm... If internet radio goes down the crapper I guess I'll have to resort to sailing the seven seas, lol.

 

[BiG D]

personally, I feel it should be illegal to charge retroactive fees; if you screw up and realise that you've under-priced a product or service then you take it on the chin and learn to do better next time.

I seem to remember reading that the American constitution expressly forbids enacting retroactive laws. As I understand it, the reason this is allowed is because back in 2005 when the previous "contract" ran out, the CRB hadn't decided yet what to charge. They somehow got everyone to agree to pay them retroactively for what they eventually decide is the new rate. It's terrible, yes, but pretty much in line with what I expect from the RIAA.

This being said, I'm surprised we're not seeing some aggressive legal action from yahoo, who reportedly will owe $1.15 billion per year (+ the retroactive charges since 2005) with these new rates.

 

[DocBot]

then again, this is american legislation, yes?

meaning web radio from other countries would still work fine?

 

[thatbloke]

then again, this is american legislation, yes?

meaning web radio from other countries would still work fine?

Yes but how long till the RIAA starts trying it on in Europe?

 

[Ronin Storm]

Yes but how long till the RIAA starts trying it on in Europe?

That's one of my concerns, for sure. The MPAA have already shown willingness and capability to affect policies of European governments; I wouldn't be shocked to find the RIAA in the same position.

Also, for us in the UK, our government just does whatever the US tells us to anyway so we'll be following suit within months, if not ending up with even more insane fees/rules here.

 

[BiG D]

Just a quick update: SoundExchange has made a small compromise, for now.