The increase in royalty rates for Internet radio stations scheduled to go into effect May 15 makes me very nervous. I don't think I fully understand all the issues, but I know I definitely don't trust major record labels to protect artists' interests. Here's what I'm reading:
BoingBoing calls it an Internet radio crisis. Reader comments urge people to contact their representatives through Savenetradio.org. And they provide talking points, so you just have to dial a number and read the script. Sweet!
Here's an excerpt from an interview on Truthdig with the guy who founded Pandora, which I listen to pretty much nonstop every day at work:
Sinnreich: The RIAA and SoundExchange argue that higher rates are necessary in order to adequately compensate recording artists as CD sales and other traditional music channels continue to lose customers to the Internet. What’s your take on this?
Westergren: I’m a musician myself, and I’m a huge fan of paying artists for their work. Our position is that we’re happy to pay it, but it has to make sense for the business. You’re right—CD sales are really dropping dramatically, and there’s a fair bit of panic going on. But that’s coupled with a serious misperception about the economics of online radio. SoundExchange and the RIAA say that since Internet radio’s getting bigger, a bigger piece of the webcasting pie needs to go to artists. In reality, revenue might grow, but that doesn’t mean it’s going to become much more profitable. You can’t squeeze blood from a turnip.
Sinnreich: So you don’t think they’re malicious so much as misinformed.
Westergren: They’re definitely misinformed. But there’s another piece of the story. Half of the money we pay to SoundExchange each month goes to the labels, and half goes directly to the artists. If these new rates do stick, then the only way webcasters will stay alive is to start striking direct licensing deals, at lower rates, with the major record labels. If those deals are struck, then all of that money goes directly to the label, and goes under the umbrella of traditional record deals, where only a very small percent ends up going to artists [emphasis mine].
Sinnreich: So you believe that one of the strategic reasons the RIAA has for supporting these higher rates is so labels can offer a competitive lower rate directly to webcasters, which would mean more income overall for labels and less income for artists?
Westergren: That’s exactly right.
And an excerpt from Newsweek.com:
As you read these words on your monitor, there is a decent chance that you’re also streaming a little online radio. After all, with an estimated listenership of approximately 50 million Americans per month, Internet radio has become a go-to destination for a fuller spectrum of music, an alternative to FM’s mind-numbing monotony. And if you are one of those listeners, mark May 15 on your calendar: it might well be the day that the music dies.
Last month the trio of Library of Congress judges that oversees copyright law’s statutory licenses decided that May 15 will be the date royalty fees owed by Web radio operators will be recalibrated. The Copyright Royalty Board changed rates from a percentage of revenue to a per-song, per-listener fee—effectively hiking the rates between 300 and 1,200 percent, according to a lawyer representing a group of Webcasters. "If this rate does not change, it will wipe out the vast majority of Web radio," Tim Westergren, founder of the music discovery service Pandora, tells NEWSWEEK. "If this stays, we’re done. Back to the stone age again." (Royalty Board Chief Justice James Sledge declined to comment on the case, which lawyers say they intend to appeal.)
4 comments:
This is the inevitable cash-grab by purveyors of dead media (record labels). The RIAA's perspective is that since Internet radio is more convenient than buying a CD, you should pay for that convenience. Every SANE person's perspective is, "It costs you nearly NOTHING to broadcast over the Internet. YOU should be paying US to listen to Good Charlotte."
The same ballyhoo happened when Edison started selling recordings on wax cylinders. The musicians, whose sole income came from live performances, were soiling themselves with rage. "Nobody's going to want to listen to live music when they can play it any time they want to on one of these here newfangled wax cylinders!" Then AM radio came along and they soiled themselves again. "Who will buy our wax cylinders if you can listen to music for free out of that devil's box?"
All this fee structure is going to do is further marginalize independent artists and create a covert distribution network where there was none before. I for one welcome our new pirate radio overlords.
Yeah it's the same old song and dance from the greedy corporate music industry. it's not enough that they exploit artists and throw them away when they're done with them (and straight to debtors prison), but they have to drive the final wedge and stick it to their fans as well.
What this should do is make more artists go DIY and not sign to labels in the first place. Ani Difranco did it, and anybody else with enough drive can do it too.
The problem parallels that of the surrealists and DADA in the post WWI era. Both art movements attempted to kill "art" but failed to bury "it," resulting in the zombified vampire of modernism that not even Foucault could "kill" with all the "quotes" at his "disposal."
The music business is an elaborate confidence game. People pay $10.99 for a CD because they're told that's how much it's worth and their only point of reference are music stores. Implement .99 cent downloads for only the songs you want, and that equation changes. Distribute DRM-free on peer-to-peer and it changes again. The labels made money hand over fist when they went from LPs to CDs: per unit cost dropped exponentially and product price doubled or tripled. Now the chickens have come home to roost. The question isn't how can we further subsidize the buggywhip-and-laudanum distribution system, but how quickly can we destroy it.
Clearly, we must kill internet radio in order to save it. People aren't stupid. Audiences and artists will find a way to reach eachother. Distributors are the parasitic middlemen that need to be exterminated. The first rule of being a parasite is to not kill your host. If Ashley Simpson isn't the musical equivalent of lymphatic cancer, I don't know a horse from a hacksaw.
Good point! If internet radio dies, maybe it will open the door wider for the indie and DIY artists.
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