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July 13, 2007 2:32 PM PDT
FAQ: Net radio's mixed signals
Last modified: July 14, 2007 9:12 AM PDT
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On one hand, Webcasters large and small, commercial and noncommercial, have been fighting a decision earlier this year by the U.S. Copyright Royalty Board that they argue, if left untouched, could put them out of business. They've also landed support from thousands of independent musicians who say they rely on their services to pick up listeners they wouldn't otherwise reach.
On the other hand, commercial artists and record labels allied with a recording industry royalty collection body called SoundExchange argue the changes are necessary to ensure fair compensation for their work. So far, both the CRB and federal courts haven't disagreed.
Private negotiations have been ratcheting up as the deadline for the new payments approaches, and discussions about a number of alternative offers to the CRB decision appear likely to continue into next week. Encouraged in part by a closed-door Capitol Hill meeting on Thursday, the negotiators have been expressing increasing confidence that a resolution can be reached, although it's unclear whether that will happen before Sunday.
CNET News.com has compiled a list of answers to the pertinent questions listeners may be asking.
What's this I've been hearing in the blogosphere about Webcasters being saved from complying with the July 15 deadline? Didn't a federal court just deny that request?
It's true that on Thursday, the U.S. Court of Appeals for the District of Columbia rejected a petition by large, small and noncommercial Webcasters to delay the onset of the new fees. From there, it gets more complicated.
Later that day, Webcaster, SoundExchange and recording industry representatives met with about half a dozen members of Congress on the Hill. At that meeting, SoundExchange Executive Director John Simson outlined a number of offers that his group has made to Webcasters. One of them was characterized by published reports as a pledge to delay enforcing collection of the new fees until all of the negotiations had ended, which prompted much rejoicing among the blogosphere.
The trouble is, Simson's statement was misinterpreted, SoundExchange spokesman Richard Ades told CNET News.com on Friday. What Simson really meant was that SoundExchange has already offered to freeze "small" Webcasters' required payments at historic levels through 2010.
"Assuming that those negotiations conclude successfully, then the small Webcasters would be paying the old rates, so it would not make sense for them to start paying the new rate," Ades said. But if the negotiations break down, then the new rate prevails, he added.
In short, nothing is set in stone yet, and SoundExchange is urging all Internet radio operators to "follow the law"--and perhaps to consult an attorney as well.
Then what does all of this mean for Internet radio listeners? Will I have fewer choices for music come July 15?
It's still not entirely clear.
Some who frequent smaller stations may have already noticed disruptions. According to the advocacy group SaveNetRadio, which has been lobbying for changes to the new rules, hundreds of stations have already shuttered their operations out of fear that they couldn't keep up with the new rates. Various published reports have named a year-round Christmas song station and a couple of jazz channels among the casualties.
Others have said they're encouraged by reports about the perceived progress being made in negotiations with SoundExchange and may rethink shutting down. But as we've already noted, small Webcasters haven't yet secured any formal immunity to the higher fees.
Representatives from some of the larger services--Yahoo's Launch, Live365 and Pandora--told CNET News.com that listeners probably will not notice any changes, at least at first. Others, like AOL Radio, still weren't exactly sure what's going to happen. National Public Radio said there won't be any immediate changes to the way its stations stream online music to their listeners, thanks to a last-minute agreement with SoundExchange. But the deal is only temporary, and negotiations are expected to continue over the next few months, NPR said.
Opponents of the new rates have warned that if they don't manage to broker a timely compromise with SoundExchange, the variety of independent Internet radio stations that consumers see today will diminish.
Back up for a second. How much are these rates going up, anyway?
The breakdown is as follows: The decision set rates for 2006 at 0.08 cents per song, per listener, which means Webcasters will have to cough up the difference between what they've already paid and what they owe under the CRB ruling. Then the rates climb to 0.11 cents in 2007, 0.14 cents in 2008, 0.18 cents in 2009 and 0.19 cents in 2010. There's also a $500 per "channel" minimum payment for each service.
See more CNET content tagged:
Webcaster,
negotiation,
recording industry,
Internet radio,
blogosphere
2) If i produce a peice of music and want it to be played on any computer/internet device when reccomended by a DJ why can't i label it free to air so that i don't get any royalties for it when played on the radio just when somone wants to purchase it.
Asking these questions and more my mind wanders down the murky path of the corrupt music industry and i wonder if any of it really wants individuals to prosper in the most influential art there is or whether music must conform to the propergander of the day/hidden islamic empire.
these royalties? A broadcast is a broadcasts! It is obvious these
internet broadcasters want to make a profit on this.
I am not sure how many user's actually use a radio service?
I would say the only one's that should maybe get a beak would be
FM or HD radio stations which simulcast their station on the
internet. Copy right material is just that! No matter where or how
you listen to it!
It's a sad period for the history of the internet when it used to be full of research, development, meaningful communications, and overall common sense.
Nowadays it's just a giant 'rent me' or 'buy me' space for zillions of billboards and I think I can liken this to any highway going into Las Vegas - the desert used to be a beautiful place until Wayne Newton and Carrot Top started popping up along the way.
Back to the topic at hand: SoundExchange has zero authority as far as I'm concerned to try and collect fees from public radio stations that do not broadcast any copyrighted material, even anything that is allowed by the original copyright holder. If I make an audio file that I want to post for free use on the internet, as long as the broadcaster is in agreement to cite the source, I have no problem letting it go. I don't want/require/need/desire SoundExchange going after money I'll never see.
That's like me trying to sell fruit on a public street corner and a guy in a silk suit telling me I need to pay a 'tax' to him and his boss or I risk losing more than just my business.
There are a few words to describe what is happening and they all imply organized crime mentality:
- Extortion.
- Racket.
- Blackmail.
- Swindle.
- Theft.
- Strong arm.
- Bleed.
- Intimidate.
- Muscle.
The sad part of this is that the United States Government, who is supposed to be for the people, by the people, is turning a blind eye to the people who just want to exercise their first amendment rights in the most inexpensive means possible.
If that's the case, then I want Hugo Chavez for president. At least you know where he stands.
These companies have colluded repeatedly in price fixing, artist contract abuse, and illegal payola to promote sales.
Do not buy music from these parasitical entities!
Rejoice as each year their sales and profits slip and we can look forward to their demise. The times have changed and their existence is akin to buggy whip makers.
There is plenty of compelling music offered by independent labels and artists. The Big Five give you manufactured boy bands, bimbo faux pop divas, mindless rap and hip hop prattle, and aging dinosaur wrinkly rockers.
If the confiscatory increase in royalty payments results in internet stations shutting down there will still be those that play music that is not part of the copyright payment scam. Let the idiots shoot themselves in the foot yet again! If they insist on extorting payments from stations to advertise their music then refuse to play or purchase any of it! Let the power fall!
Let net radio stations choose to play all independent music, or be part of SoundExchange. I think this free market solution would soon remove SoundExchange and the RIAA from relevance.
pay up to millions would kill net radio. They are killing some of
the best and most outreaching type of marketing for the artists
music. Were talking global. Far better than any FM station could
reach out to anyone. So now this is it. Unless Congress gets off
there ASS and stops this GREEDY non-sense net radio will be
dead and the only ones that will lose out is the artists that they
claim are supposed to be paid. Well now they will get NOTHING!
Because no broadcasters will be found as no one can AFFORD IT!
So now they will lose two ways, no money and no GLOBAL
advertising. I see nothing good coming out of this except the
death of internet radio.