"Madame, bear in mind That princes govern all things--save the wind." -Victor Hugo, The Infanta's Rose

Tuesday, April 17, 2007

The death of internet radio

There's a few things that set me off on a rant, and today's topic is one of them. It's pretty lightweight compared to truly serious issues like global warming and Iraq, but as a former broadcaster it hits close to home for me. I love listening to music over the internet, and recent government actions will likely doom internet radio to extinction.

In a nutshell, internet broadcasters (like all other radio stations) pay royalty fees to the copyright holders of music they play. Previously, this fee was based on a percentage of the station's income from advertising. This is a logical method of doing business; a station making, say, $1,000 a month can afford to pay more than a station making $100 a month, or zero in the case of many so-called "hobby" broadcasters who run stations out of their homes strictly for fun instead of for profit. This has resulted in a wide and eclectic variety of streaming choices for the listener. Now, our good friends at the RIAA want all internet stations to pay PER SONG, PER LISTENER, regardless if the station doesn't make a dime. Please read the details below, and if you feel strongly enough, click the link to send an email to your congressional representative requesting reasonable royalty rates for internet broadcasters. Thanks.

Who, What, and When

Corporate interests are hard at working making sure you don't have a choice, because they make more money when you have no choices. On March 2, 2007, The CRB (Copyright Royalty Board, a division of the US Copyright Office) approved new royalty rates that will bury any small webcaster, and create a heavy burden even for big broadcasters like Yahoo, AOL Music and Pandora. How high will these rates be? In most cases, around 100% of a small webcaster's revenue! Yesterday (4/16), the Copyright Royalty Judges caved in to the RIAA and issued an order denying a rehearing which had been requested by numerous parties including National Public Radio, who objected to the new provisions requiring that noncommercial stations must pay the same royalty rates as commercial broadcasters. (Latest stories here.)

How did this happen?

The RIAA told the CRB that's what they wanted, and the CRB just gave it to them. The RIAA (Recording Industry Association of America) is a lobbying group formed by the five largest record labels. They are embedded in Washington D.C., and make sure laws are written to keep them rich, no matter what. They made headlines by filing lawsuits against elderly people, stroke victims, single mothers and children for trading music online, even though some of them didn't even have computers. They are currently involved in a massive campaign of extortion targeting college students, sending thousands of letters threatening them with lawsuits unless they part with four and five figure sums of money (conveniently payable via "MasterCard, Visa, and Discover") to avoid being taken to court. Check out the latest RIAA headlines.

The CRB is charged with setting the royalty rates that would be determined by a willing buyer and a willing seller in a marketplace transaction. They decided to jack up the rates far beyond a webcaster's ability to pay, despite decades of royalty rates being between one and two percent of broadcaster revenue. The new rates would force webcasters to pay outrageous fees even if they have no revenue whatsoever! Raise your right hand if you want to take away consumer choice, hurt working artists, damage small record labels and put small webcasters out of business!

This determined campaign of extinction is supported by most licensed broadcast stations, who see internet radio (along with satellite radio, personal mp3 music players, podcasts, and virtually all other alternate forms of content delivery) as a threat to their business. While commercial stations who stream audio over the web would also be required to pay higher fees under the new scheme, they have sufficient sources of income to offset or subsidize increased royalty fees. It's the "little guy" who will be forced to shut down, and that suits commercial stations just fine. Radio listenership has been declining steadily for years, and corporate broadcasters and the RIAA would rather litigate the competition out of business than admit that people are tired of hearing stupid commercials, inane DJ's, and the same tired old musical crap, picked by "programming consultants" and duplicated on cookie-cutter formatted stations nationwide.

Take Action Now:

Protect your right to hear eclectic independent radio and discover new artists. Your continued support and action is needed; for example, consider not purchasing new CD's (only used), and pass the word to anyone you know that loves or makes music.

You can help save internet radio with less than five minutes of your time by writing your congressional representative and telling them:

I do not support The Copyright Royalty Board's (CRB) March 2nd decision to substantially increase royalty rates. Not only will it impact my choices, but the Recording Industry Association of America's (RIAA) manipulation of these rates, and the CRB's indifference will hurt working artists, damage small record labels and force law abiding small webcasters, already paying a large portion of their revenue per month in royalties, out of business. This decision will also damage hundreds of small businesses providing goods and services to working artists, small record labels and small webcasters.

I respectfully ask that you evaluate the CRB decision and do whatever is necessary to establish a reasonable royalty rate for all the parties involved.

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