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Internet Radio's 'Second Chance' Bogging Down in House
Posted by
Zonk
on Mon Aug 06, 2007 07:03 AM
from the fish-in-a-barrel dept.
from the fish-in-a-barrel dept.
An anonymous reader writes "Wired is reporting that the Internet Radio Equality Act is failing fast in the House, with negotiations breaking down over fair pricing for internet radio broadcasters. 'A legislative setback could make it harder to dislodge the new fees, which took effect last month after a federal appeals court refused to postpone the payment deadline. With the threat of congressional backlash fading, SoundExchange could find little incentive to budge from its current position ... SoundExchange has already proposed changes that could relieve small and custom-streaming sites from charges they could not possibly afford to pay, at least in the short term. Many expect a small-webcaster deal to be done by early September, when Congress goes back into session. But the deal on the table hasn't changed since SoundExchange extended an offer in May to charge them 10 percent of gross revenue under $250,000, or 12 percent of gross revenues over $250,000, with a revenue cap at $1.25 million.'" All very cushy for SoundExchange. Wired also points out that this is the same organization illegally lobbying for terrestrial radio royalties through 'third party' shell groups.
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Your Rights Online: Internet Radio In Danger of Extinction in United States 229 comments
An anonymous reader passed us a link to a Forbes article discussing dire news for fans of Internet radio. Yesterday afternoon saw online broadcasters, everyone from giants like Clear Channel and National Public Radio to small-fry internet concerns, arguing their case before the Copyright Royalty Board (CRB). The CRB's March 2nd decision to increase the fees associated with online music broadcasting will have harsh repercussions for those who engage in the activity, the panel was told. "Under a previous arrangement, which expired at the end of 2005, broadcasters and online companies such as Yahoo Inc. and Time Warner Inc.'s AOL unit could pay royalties based on estimates of how many songs were played over a given period of time, or a 'tuning hour,' as opposed to counting every single song ... [They] also asked the judges to clarify a $500 annual fee per broadcasting channel, saying that with some online companies offering many thousands of listening options, counting each one as a separate channel could lead to huge fees for online broadcasters." There was also a previous provision for smaller companies that allowed them to pay less, something the March 2 decision did away with; in the view of the royalty holders, advertising more than pays for these fees, and they're ready for higher payments.
[+]
Your Rights Online: Net Radio Appeal On Royalties Rejected 298 comments
Station writes "The Copyright Royalty Board has rejected a request to reconsider its March decision to impose an onerous royalty schedule on Internet radio broadcasters. '"None of the moving parties have [sic] made a sufficient showing of new evidence or clear error or manifest injustice that would warrant rehearing," wrote the CRB in its decision.' The recording industry and its royalty collection organization SoundExchange are jubilant over the ruling. '"Our artists and labels look forward to working with the Internet radio industry — large and small, commercial and noncommercial — so that together we can ensure it succeeds as a place where great music is available to music lovers of all genres," said SoundExchange head Simson in a statement. Noble words, but after today's ruling — which will take effect on May 15 unless the US Court of Appeals for the District of Columbia Circuit agrees to hear an appeal — there probably won't be much of an Internet radio industry left for SoundExchange to work with.'"
[+]
News: RIAA Claims Ownership of All Artist Royalties For Internet Radio 458 comments
ISurfTooMuch writes "With the furor over the impending rate hike for Internet radio stations, wouldn't a good solution be for streaming internet stations to simply not play RIAA-affiliated labels' music and focus on independent artists? Sounds good, except that the RIAA's affiliate organization SoundExchange claims it has the right to collect royalties for any artist, no matter if they have signed with an RIAA label or not. 'SoundExchange (the RIAA) considers any digital performance of a song as falling under their compulsory license. If any artist records a song, SoundExchange has the right to collect royalties for its performance on Internet radio. Artists can offer to download their music for free, but they cannot offer their songs to Internet radio for free ... So how it works is that SoundExchange collects money through compulsory royalties from Webcasters and holds onto the money. If a label or artist wants their share of the money, they must become a member of SoundExchange and pay a fee to collect their royalties.'"
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News: Small Webcasters Offered a Rate Break, Reject It 123 comments
Pontifex minimus writes "Music royalty collection group SoundExchange has offered an olive branch to small webcasters. They are willing to delay the exorbitant new rates set by the Copyright Royalty Board until 2010 for small webcasters in hopes that they can keep Congress from passing the Internet Radio Equality Act. Larger outfits, like Live365 and Pandora would not be affected and would have to pay the new rates. '"Although the rates revised by the CRB are fair and based on the value of music in the marketplace, there's a sense in the music community and in Congress that small webcasters need more time to develop their businesses," said John Simson, executive director of SoundExchange.' SaveNetRadio rejected SoundExchange's offer, saying that it 'throws large webcasters under the bus.'"
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The SoundExchange Billion Dollar Administrative Fee 127 comments
palewook writes "On June 7th, Yahoo, RealNetworks, Pandora, and Live365 sent letters to US lawmakers emphasizing they owe SoundExchange 'administrative fees' of more than $1 billion dollars a year. These fees would be paid for the 'privilege' of collecting the increased CRB royalties effective July 15th, unless the Internet Radio Equality Act passes Congress. SoundExchange, the non-profit music industry entity, admits the levied charge of $500 per 'channel' is supposed to only cover their administrative costs. Last year, SoundExchange collected a total of $20 million dollars from the Internet radio industry. Under the new 'administrative fee' RealNetworks, which hosted 400,000 unique subscribed channels in 2006, would owe an annual administrative charge of 200 million dollars in addition to the retroactive 2006 rate hike per song played."
[+]
Technology: A Reprieve for Internet Radio 108 comments
westlake writes "In the wake of Internet Radio's Day of Silence, SoundExchange has proposed a temporary $2500 cap on advance payments 'per channel/per station.' The Digital Music Association responded immediately in its own press release that it would agree to this, but only if the term for the new arrangement were extended to 2010 — or, preferably, forever. On another front, SoundExchange seems aware in its PR that it will have to concede something more to the non-profit webcaster, if it is to avoid Congressional action."
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News: Webcasters Call Bunk on SoundExchange DRM Ploy 109 comments
RadioFan writes "The settlement between webcasters and SoundExchange is starting to come apart at the seams, because everyone is realizing that SoundExchange wants to force DRM on Net Radio. DiMA, one of the largest Net Radio lobbyists, has fired back at Sound Exchange, calling them out for leveraging high royalty fees to push through DRM requirements that they failed to obtain in Congress via broadcast flag and anti-recording legislation. Was this whole thing a ruse to get DRM on net radio?"
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News: SoundExchange Backs Off DRM for Webcasters 63 comments
Radio Free Europe writes "The big news is not that SoundExchange has repackaged the same royalty proposal that small webcasters rejected in May, but that SoundExchange has dropped its previous insistence that DRM be a part of any agreement. 'On the bright side, it doesn't appear as if DRM is part of the terms this time around. Previously, SoundExchange stated that webcasters who agree to the deal must actively "work to stop users from engaging in 'streamripping'." This began a war of words between the Digital Media Association (DiMA) and SoundExchange, with DiMA accusing SoundExchange of using rate negotiations to push mandatory DRM. SoundExchange's letter leaves the much-maligned streamripping issue out of the discussion, clearing at least that hurdle.'"
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News: Internet Radio's "Last Stand" 316 comments
We've been discussing the plight of Internet radio for some time, as the Copyright Royalty Board imposed royalties that industry observers predicted would prove lethal to the nascent industry. We discussed Web radio's day of silence in protest, which won the industry a reprieve, and the futile efforts to find relief in Congress. Now it's looking as if the last act is indeed close. Death Metal Maniac sends along this Washington Post story with extensive quotes from Pandora CEO Tim Westergren, who said: "The moment we think this problem in Washington is not going to get solved, we have to pull the plug because all we're doing is wasting money... We're funded by venture capital. They're not going to chase a company whose business model has been broken." The article estimates that XM Satellite Radio will pay "about 1.6 cents per hour per listener when the new rates are fully adapted in 2010. By contrast, Web radio outlets will pay 2.91 cents per hour per listener." That's 70% of projected revenue for Pandora; smaller players estimate the hit at 100% to 300% of revenue.
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Oh REALLY? (Score:5, Funny)
Huh. Congress making deals with a known criminal organization. Who would have even thought that was possible?
what a choice (Score:3, Insightful)
Re: (Score:3, Funny)
In a weird way, I hope that this fails (Score:5, Interesting)
Re: (Score:3, Interesting)
And yet (Score:4, Interesting)
Parent
Re: (Score:3, Interesting)
I've visited Utah, New York (and some of the surrounding area), and Pennsylvania. They are certainly different, and if I were to wake up in any then I could quite quickly work out which it was without relying on maps or landmarks. The amount of cultural diversity I encountered, however, was about the same as I would get travelling across England. I realise I haven't been quite to opposite extremes. Going from central London to north Wales I find a cultural gradient at least as great as any found in the
Re:And yet (Score:4, Interesting)
Having lived in multiple parts of both, I can say that living in New England in the US most closely resembles living in a roughly single language version of Northern Europe. Architecture and cultural changes abound in relatively short distances. Once you move west out of NE and New York, it largely and quickly becomes large homogeneous areas. Communication in some can be difficult. I recall one time in Tennessee having to order by number because the counter help (definitely all locals, and quite possibly from the same small gene pool) could not speak in anything approaching an understandable dialect (similar to Cockney vs Scots, or Dutch vs Flemish).
I can also say that many of my co-workers in 2 places in Europe had never gone more than 15 miles from their birthplace. However, in all fairness, that 15 miles covered more than 3 major cities and multiple smaller towns, sometimes with great differences between them.
In Europe, you will also get a set of primary TV channels from all the surrounding countries, a really nice feature. Why US cable/satellite providers don't supply BBC, German, Spanish, and French direct feeds I'll never really understand, other than it interferes with the MAFIAA control over what is seen in the US.
Parent
Re:In a weird way, I hope that this fails (Score:5, Informative)
In New York City you can't eat any food with trans fatty acids, and in Chicago (which is probably more than 3 hours, but throwing it out here as an example), it gets tricky trying to get fois gras. And violent video games? Well, you can't play Manhunt 2...it was supposed to be released last month.
And even if those aren't things you care about, well, it's only a matter of time before they attack something you do.
Parent
Re:In a weird way, I hope that this fails (Score:4, Insightful)
That isn't weird. I want to see the RIAA and anyone who supports them boycotted out of business. As long as these groups are able to make money they will survive.
Parent
Re:In a weird way, I hope that this fails (Score:5, Insightful)
(Article [dailykos.com] on the DailyKos on this subject)
Which ever way you look at it, it's a lose-lose situation for internet radio, if the fees will go in effect.
Parent
I believe there is a way around this. (Score:3, Interesting)
Re: (Score:3, Interesting)
Re: (Score:3, Interesting)
In fact this won't kill internet radio, just current protocols. Instead we'll see superior p2p protocols where stations broadcast only torrent files and mixing instructions.
p2p radio has many advantages
- near zero bandwidth cost for broadcasters because listeners pay both directions
- synchronous usage keeps bandwidth prices down
- stations can learn/feed off one
Re: (Score:3, Interesting)
The RIAA will get paid anyways from artists who originally refuse to participate in their monopoly on entertainment. It is the only way for the RIAA to keep a stranglehold on their abusive business model. (BTW, it is the same tactic being used by the MPAA to keep regular Joes from making quality movies and independantly producing and distributing them via the Internet - HDCP technologies are not anti-pirate technologies - they are anti-competitive technologies)
Why doesn't
Re: (Score:3, Insightful)
Re: (Score:3, Informative)
Cause and Effect (Score:4, Interesting)
"Whether or not SoundExchange's lobbying efforts prove to be illegal, its presence as an advocate in this debate undercuts its role as neutral administrator of royalty fees set and approved by the Copyright Royalty Board."
The summary makes a *statement* that SoundExchange committed an illegal act. The article is less adamant concluding the SoundExchange should 'do the right thing'.
Huh?
Okay, this is slahsdot and summaries are not always concise about the cited article, but I would feel that given a case of braking the law, the Law, be that the US Attorneys General, a member of congress, or some other representative of the Law would take action. I personally feel that what is happening to online music is disgusting and agree that artists over time need to use the internet to get closer to their fans and potential audiences. That will not happen if bodies that control the money are not held accountable when they stray from the law.
Did they? Did they not?
It would seem, since no one is being taken to court on an illegal act, that they did not. That it were a civil issue why are music stations not suing for redress. Herer's a thought, if Wired thinks SoundExchange is breaking the law, report them to the law. Is that not what we do if we see a crime taking place? A lady is breaking into a car as I watch. I go over and ask, is this your car? "Um, I do own a car and this is a nice car" is the reply. I am suspicious so I what?
Write an article on how wrong it is to steal cars citing this lady as prime suspect...
or
report her ass to the law and let them figure it out.
For crying out loud...maybe journalism cannot file the report and instead they use the power of the pen to bring the issue to light. But if NO ONE takes action, either report on that (and ask why) or walk into a DA's office and demand that they be investigated.
(sigh)...I think I may make my sig "I hear the fiddle in the distance, and it is getting closer".
Re:Cause and Effect (Score:4, Insightful)
It's not that simple. If SoundExchange is violating the law, it is probably a civil matter and not a criminal matter. Law enforcement doesn't do anything and is not responsible for enforcing civil law, only criminal law.
If they are violating civil law, well, as for why music stations aren't suing...well, people with a legitimate legal beef don't always sue. There are plenty of reasons why they don't.
Look at this way: Microsoft violated the law with its Windows licensing scheme, right? I mean, a federal circuit court judge even said so, right? So why didn't the OEMs, who were harmed by this illegal licensing scheme, sue Microsoft? Mostly economic reasons. They didn't want to fight Microsoft's army of lawyers, sure, but they also didn't want Microsoft to cut them off from Windows and Office licenses.
I suspect there are similar reasons why music stations aren't suing SoundExchange.
Parent
Someone should point it out to Congress (Score:5, Insightful)
The difference is that this makes it quite a bit harder for Congress (or any organisation within the US) to take influence in the broadcast and avoid or at least monitor less desired broadcasts to happen. I mean, think of the propaganda ability of a net based radio that plays what its listeners want to hear. All you have to do is call your spin news and broadcast it once an hour, and between those news, just broadcast the latest and greatest hits.
Now imagine this radio station somewhere in the middle east.
10 percent of gross revenue under $250,000 (Score:3, Interesting)
Re: (Score:3, Interesting)
Why is Congress involved? (Score:5, Interesting)
First of all, Congress has NO power to set prices for any reason -- none. No government should ever set price caps or minimums. Doing so creates high prices and restricted inventories (or none at all). Let the market set pricing.
If the license-owners of music want to charge a given rate, let them. Those who can pay the rate will, those who can't will either move to different content, or pirate said content.
Here's where it gets exciting: piracy. With the huge number of people who want to transmit online, and the huge amount of countries and provinces to transmit from, it could be more expensive for the license-owners to go after someone streaming to 40 people than they'd get from the outcome. The amount of bandwidth on the web is virtually unlimited versus radio, and the reach is virtually unlimited. This means a virtually unlimited supply of music -- regardless of demand, the price will fall. If the license-owners think they can charge more than the market is willing to pay, they won't last long. The days of the power of copyright are quickly sliding through their fingers, into the open hands and mouths of those who want to spend their time providing a service that others want.
That service is NOT necessarily music, but a specific combination of music (and maybe commentary). It is THIS part of the service that the end users will pay for (either directly, or through advertising sponsorship). One specific song is NOT the important part, in fact it is the least important part. There are virtually unlimited songs to choose from, even in a given genre. There are NOT unlimited people who are talented in packaging these songs together into a format that someone else wants, and spend the same time marketing to the audience at large. The income is generated for the new labor created -- as the market should work. Old labor in the form of an easily copy-able song should fall to nearly zero. The bands who are played on these stations should be excited to get free marketing to promote their future concerts, personal appearances, or other live labor expenditures that they can sell in real time to their fans. Their labors, in real time, are worth way more than a pre-recorded, easily copied song worth zero or close to zero due to oversupply.
Get the tyrants in Congress out. These people have no understanding of the specific powers provided to them, by the People, through the Constitution. Congress does not have unlimited power.
Fine. Pay the royalties BUT.. (Score:3, Interesting)
Which part of the Constitution authorizes this? (Score:5, Insightful)