Royalties - a Royal Pain?

In the world of webcasting the following occured:

Determination of Rates and Terms for Webcasting for the License Period 2006-2010 in [Docket No. 2005-1 CRB DTRA] Digital Performance Right in Sound Recordings and Ephemeral Recordings

(...denied were the requests for a new hearing by a coalition of webcasters on grounds that there was lack of any new evidence.)

So, as it now stands, commercial webcasters must pay per song as follows:

2006 - $0.0008
2007 - $0.0011
2008 - $0.0014
2009 - $0.0018
2010 - $0.0019

Non-commercial webcasters must fork over $500 in advance annualy per channel or station up to a total of 159,140 aggregate tuning hours ("ATH") per month. After that, they pay the above rates per song played.

Yikes! (Guess I won't be launching any web-radio stations anytime soon.)

And, just who the hell is going to start up a NON-COMMERCIAL station when they gotta pay $500 per year at minimum?

SaveNetRadio.org is obviously and understandably pissed. As I write this, they have a clock on their website counting down (at 15 days, 22 hours and so many minutes/seconds) to the "day the music dies".

All of this revenue for the webcasting licenses is to be collected by SoundExchange (an RIAA appointed/affiliated entity, despite any "official" claims to the contrary.) Terrestrial radio pays NOTHING to SoundExchange. Traditional broadcast radio pays ASCAP/BMI for licensing which theoretically/supposedly goes to pay the artist and publisher.

This new ruling by the Copyright Royalty Board asks webcasters to pay the money (via SoundExchange) to the copyright holder of the sound recording. (RIAA labels for the most part.) Something seems bass-ackwards to me.

Does the RIAA hope to earn any real money from this arrangement? Surely they are not THAT stupid. If these rates stand, NOBODY (likely not even the likes of Yahoo Music!) are going to play ball. Everyone will simply close shop and webcasting will be dead. I wonder. Is this what the Recording Industry wants?

H.R. 2060, The Internet Radio Equality Act was introduced by Representatives Jay Inslee (D-WA) and Donald Manzullo (R-IL ) in an effort to "save" the Internet radio industry.

"While the record industry may try to fight this bill, it's actually in their best interest: They're better off getting 7.5% of the revenues of a thriving new medium — plus all of the positive exposure for new genres and new artists, and associated CD sales, that Internet radio is providing — than 50% to 200% of nothing, which is what they'll get if the CRB decision stands and U.S.-based webcasting essentially shuts down on May 15th... " (www.KurtHanson.com)

Hmm... I am almost tempted to hope the bill does fail. If royalty rate increases can rid Internet of the RIAA's music, the world would be a better place. After all, there is nothing to stop indie music from being heard on Internet radio when the indie artist directly "opts in" with the webcaster. (Side-stepping the whole corrupt system in the first place.)

Support Local and Independent Music!

--Shmoo

Check out my pal George's thoughts about this webcasting controversy over at his site: http://azoz.com