Monday, July 9, 2007

RIAA blocking IREA, holding up any settlements

I've heard "off the record" now from several sources that the RIAA has been the party behind a large mis-information push about the Internet Radio Equality Act.

One example is claiming that the biggest internet radio services are giant corporations. With the exception of Yahoo and AOL, most of the largest internet broadcasters - in terms of listeners - are all independent operations.

As Bill Goldsmith at Radio Paradise says:

SoundExchange has been challenged many times, by numerous people (including myself) to give ONE example of a webcaster currently online in the U.S. who could operate successfully under the CRB rate structure. They have never done so, because there are no stations that meet that criteria.
Instead, the RIAA brings up misleading statements of how most webcasters are all billion dollar corporations who could easily afford these rates, yet won't state facts. (I've asked members of the SoundExchange board as well as their news department to name the 20 major webcasters and gotten no response.) WHY? Because they can't name them because they don't have the facts to back it up.

Additionally, the RIAA is holding up settlements that could be enacted (and congressionally codified). Independent artist representatives on SoundExchange's board support a settlement that's favorable to independent internet broadcasters, but since the majority of the SoundExchange board is controlled by the RIAA and the musician's union (which represents session musicians performing on RIAA label recordings), nothing is happening.


It should be obvious. The RIAA wants to force all webcasters to make direct deals with the Big 4 labels, because that's the way the Big 4 labels get control back. They want to control what you hear over the air.

Don't let this happen.

Get on the phone right now and call SomaFM's home town representative, House Speaker Nancy Pelosi's office at (415) 556-4862 and ask Speaker Pelosi to demand that the RIAA come to a fair settlement with small webcasters. Remind her that otherwise, the RIAA will end up forcing small webcasters out of business through impossibly high royalty rates. Also remind her that the majority of the "Big 4" labels represented by the RIAA are foreign-owned, and will be putting American companies out of business.

Call her office now. You can leave messages after hours.

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Anonymous Anonymous said...


Sad to say this to you but unless you put large amounts of cash in her coffers, none of them really give a crap about you and me. I'll bet if you look hard enough there is a fairly large amount of cash in the Pelosi et al bank accounts that have come from RIAA

July 9, 2007 7:20 PM  
Blogger Fred said...

According to several SoundExchange staff members, SoundExchange and the RIAA openly held joint strategy sessions before and during the CRB hearings. Given that, it shouldn't come as a surprise that the RIAA is driving the settlement negotiations on behalf of that organization. You have to wonder where all those "independent" and "artist representative" Directors have gone.

July 9, 2007 9:19 PM  
Anonymous foodandart said...

Rusty, I've not been listening to your stations since this fiasco hit the horizon as I don't want to burden you financially any more than you are. I've been scanning your playlists and taking notes of what you program and looking to find it from the music shops - used is better, but that may be a flawed tactic on my part. I didn't realize that the bulk of the artists you play are non-RIAA acts.

Is there a way that you can identify an artist on as not being affiliated with the RIAA? Or if it's easier, can you list the ones that ARE so I can avoid purchasing them? If I know that I can buy a CD and the RIAA c*cksuckers aren't getting a red cent of it.. well, I'd purchase CDs with much more gusto than I am now. Might even buy some new ones too.

Here's a thought.. Have you considered the idea of off-shoring your station's webcasts? Is this a tenable action to take - esp. if you figure out a way to get renumeration to the various associations that represent the acts you program?

Is a direct approach WRT you making deals with the acts and labels you program another way to throw up resistance to this joke - if you have a direct deal with any given non-RIAA label to pay them straight - contractually, there has to be a way to broker an exclusivity that shuts the RIAA out of the equation entirely. One that still gives you the freedom to play the acts that get you your listeners.

This is, after all, business - you CAN get around the RIAA in a completely legal fashion - if you're willing to think like a money-worshipping snake - Disney got around corporate taxes - hundreds of millions of dollars worth - by changing the definition of it's business model and incorporating Disney Enterprises as a holding company.

If they can do it, why not you?

A private, legal deal is a private, legal deal.


July 9, 2007 10:21 PM  
Anonymous Anonymous said...

Anyone who tries to do almost anything, under this current administration is a moron. Best bet is indeed to look into hosting your servers in a free country.

July 10, 2007 1:12 AM  
Anonymous Anonymous said...

i think stopping this RIAA nonsense should go completely viral.

You know, post this all over the place, in the real world, and in the wired. Make it so it CAN'T be ignored. Make it so everywhere they look, there is a reminder of this crap. Maybe its time to paint over some billboards? Maybe hijack a television station? Do a proactive prostest for a change? Cuz you know gathering and chanting doesnt do much anymore. The public has sort of built up a tolerance for it.

July 10, 2007 1:22 AM  
Anonymous Dr. Vekk said...

I am surprised Apple Inc. hasn't helped with this any. Because now their "radio" feature on iTunes is suddely totally useless...

July 10, 2007 1:25 AM  
Blogger Rusty Hodge said...

Dr. Vekk: Apple doesn't seem to care too much about their Radio feature. They'd rather you buy all your music from the iTunes music store. But they are supporting DiMA, a trade association that's supporting the SaveNetRadio coalition, so Apple is indirectly helping out.

Foodandart: Check out

Anon: We can't just host the servers somewhere. The law says that anything transmitted to listeners in the US is liable for the royalties. We could try and go underground, but that wouldn't last for long, and it would be very hard for us to collect any money to pay our expenses. Read past entries in my blog for more info about that.


July 10, 2007 1:38 AM  
Blogger Nufuhsus said...

GawD this sucks!

July 10, 2007 4:44 AM  
Anonymous Clayj said...

Rusty, I hate what the RIAA is doing to SomaFM and every other Internet radio station... I've given you money in the past (love my t-shirt) and I will absolutely hate it if you're forced out of business. I just called Speaker Pelosi (never thought I'd be calling her) and asked her to back the IREA.

I am curious, though... what is there really to stop you from taking SomaFM completely offshore, to Antigua or the UK or some other place? How can the RIAA collect royalties from someone who's not in the US? I listen to Chill (a UK Internet radio station) a lot at work and it seems to me that the RIAA can't touch someone who's not in the US.

July 10, 2007 9:07 AM  
Anonymous Anonymous said...

Rusty -

Aside from what's already been stated about the obvious influence the "MAFIA" (Music And Film Industries of America - I love that) has had over this impending implosion, you mentioned in an interview put out over a video podcast that you wondered if you blocked U.S. listeners from listening, that the royalty rates may not apply. First, that cracked me up.

Second - Forbes did a cover story some time ago on someone who set up online casinos and poker rooms from offshores (the Caymans, the Bahamas, I don't remember). One way or another, he's got some 95% of his traffic coming from the US, he's completely illegal per US conventional law, and no one can touch him, because his entire operation stems from offshore.

I'm not advocating that you up and move your life to another country just to do what you want to do without the threat of over-excessive financial retaliation, but could there be a way that the technical operations themselves be moved international that could work through a loophole? People set up dummy corporations all the time. Just because you live in the states doesn't mean you haven't handed "control" of the stations over to an international party.

I can't help but be reminded of the former stations of England who set themselves up on ships to broadcast offshore.

Anyone else with not a lot of spare change to throw into the efforts, but still looking to make an impact: SPEAK OUT. The monster still thrives because people keep buying CDs *DESPITE* this blatent abuse of power! This article ( -, "Woman: I'm no music pirate") is but one example of thousands of a flagrant drive to extort people by way of the 'legal system'. People: Stop buying new CDs! Shop at used stores, excluding those that have bent to the RIAA/state sanctions of tracking sales and royalties. Don't purchase from ITunes - the RIAA doesn't make as much, but they still see cash flow. Every nickel, quarter, and dollar that is turned over to the RIAA and labels in profit increases their power and gives them that much more.

We're the consumers here - We have the power. They /rely/ on us to perpetuate the cycle. The system is beyond corrupt - this is not new information. But we can put an end to it NOW.

Rusty - You have the greatest radio stations on the net, with the best independent numbers I think I've ever seen, playing some of the best music I've ever heard. I bought a Squeezebox just to hook up to my living room stereo to pump SomaFM through my house all day long. It's obvious you're a fighter, and you're trying to win rights the right way, and not by undue influence or throwing your weight around. You're an admirable person, and I want to see what you're fighting for come out on top. My rep is already on board with the IREA, but I'll be calling Speaker Pelosi and my senators again today.

Good luck.

July 10, 2007 9:09 AM  
Anonymous Dan said...

What's the big deal? The RIAA can't tax what they don't own. If the rates go into effect, all internet radio should go completely independent. It could be the first strong push for new artists to sign with independent labels.

July 10, 2007 9:14 AM  
Blogger beth said...

I just called Speaker Pelosi and was told "yeah, yeah, I'll put you down! Lots of people are calling, phones are ringing off the hooks" But they never asked my name. And they practically hung up on me.

It seems like if they listened to us something could change. Although I'm not certain that they are.

Best of luck! I will sorely miss you if somafm is no more!

July 10, 2007 9:21 AM  
Blogger Leith said...

Sad to say it the United states is not a free county at all. It is full of money hurger white colar crooks. They are all so misleding and vague it make me sick.

July 10, 2007 11:08 AM  
Blogger Rusty Hodge said...

``What's the big deal? The RIAA can't tax what they don't own.``

Yes they can. They got provisions put into the DMCA that allow them to collect (and in theory, distribute) royalties on all music played over internet radio. In theory, we can make licensing deals with every independent artist, but that's 8000 deals we'd have to make and there is no practical way we could do that. Only a handful of artists to date have granted us rights to play their music without royalties.

Unfortnately, even the larger independent labels think they're smelling money and want to charge us lots of money to play their music. Incl

We'd have to drop 90% of our music. Some of our channels couldn't exist any more at all.

July 10, 2007 12:42 PM  
Anonymous Anonymous said...

What happens if, despite our best efforts, we are unable to stop this. Will SomaFM go off line? Will it operate on a limited or pay-per-listen system? I don't know what I'd do without groove salad!
We're all behind you!!

July 10, 2007 2:41 PM  
Blogger *daisy said...

hey rusty-

longtime listener, first time poster. I just want to give a shout out and tell you what awesome music you guys play- I've been busy on the phone making all the phone calls I can to help make a difference by the 15th, and posting the info to all my sites to help and get others motivated. What's going to happen if all this goes through? Is Somafm closing up shop, or is there some alternative where you could charge a flat fee for listening/subscribing? I know you said many of the playlists won't be able to be sustained with the new royalty rates...

I am so saddened by the idea of no more Secret Agent radio (as it's just the most wonderful channel of music ever programmed). Thank you SO MUCH for all the wonderful work you've done so far, and I truly hope somafm can survive this, no matter what the outcome of the july 15th deadline...

July 10, 2007 2:45 PM  
Anonymous DomPierre said...

This is why the US isn't competitive any longer, large corporations stifle competitiveness and creativity and entrepreneurism.

Is the EFF involved to counter this?

July 10, 2007 6:57 PM  
Anonymous Clay said...

Think there's any chance to get Speaker Pelosi to watch this 90-second video?

July 10, 2007 7:07 PM  
Blogger Darrell said...

"In theory, we can make licensing deals with every independent artist, but that's 8000 deals we'd have to make and there is no practical way we could do that."

Rusty, actually this is the ONLY solution, in my opinion.

The recording industry will never change its ways. It has always been about legal and financial rape and pillage, and it always will be. Even if SomaFM somehow survives the current onslaught, you know that you'll just have to do this again in a few years when the current rates expire.

The only long term solution is to cut the recording industry out of the equation. This is exactly what StillStream has done, and I would HATE to see SomaFM fall without seriously looking at this option.

There is really no reason you can't automate the process of allowing artists to grant SomaFM waivers (this is exactly what I've done) and then you can play their music all day and night without having to pay any money to SoundExchange, BMI, ASCAP or whomever.

The two catches are:

1. An artist who belongs to BMI or ASCAP has signed away their right to give away their own music. Thus, if they sign your waiver it probably will not keep BMI and ASCAP at bay. It *will* keep SoundExchange at bay, however.

2. Some countries have non-waivable PRO licensing schemes, meaning an artist cannot waive the license fee even if they want to. I don't know of a way to get around that.

I know that it is risky to switch to an all-independent non-commercial format, but PLEASE consider it. I can promise you that if a station the size of SomaFM goes all-indie, the recording industry is going to notice. And the satisfaction of knowing you'll never again be under their thumb is worth a lot.

Anyway if you wanna talk about this option and the experience I've had with it at StillStream, please give me a holler. But whatever happens, do NOT shut down SomaFM without considering this option. It *can* work.


July 11, 2007 12:14 PM  
Anonymous Steve said...

Want to get depressed? Go ahead and call Pelosi's office? You'll talk to some dingbat who pretends he/she is taking down your comments, but is really trying to get you off the phone as quickly as possible. And you'll have the same experience in calling your Congressperson and State Senators. So should you do it? Hell yes! But I really really wonder if this feedback is getting passed on.

July 11, 2007 12:42 PM  
Blogger Luke said...

Dusk approaches on the era of internet radio broadcasting. From adolescence I grew up listening to net radio, watching it evolve from small stations with 20 or 30 concurrent users to stations with 1000+ listeners at a time. It's finally grown big enough to be a blip on the radar of big industry and it's time now for them to swoop down and crush it.

I owe my inspiration to become a musical artist and performer entirely to independent internet radio. It has shown me a world in which all languages come together to express a common and often profound meaning.

It seems that just as music is starting to come back to life, it's going to be destroyed once again by the interests of large media conglomerates.

Fuck you RIAA. Fuck you and your boy bands, your watered down rock music and your mediocre R&B. Fuck you for standing in the way of those who wish to express new and interesting ideas, hoping to influence new generations of creativity.

July 11, 2007 3:09 PM  
Anonymous Anonymous said...

Now if SomaFM moved its servers out of USA to my island Curacao, you don't owe them zip! Contact me at webmaster (at) for details

July 11, 2007 4:51 PM  
Blogger Rusty Hodge said...

Again, it's not where the servers are. It's where our business operations are. :-(

July 11, 2007 4:57 PM  
Blogger kentauros said...

I assume the RIAA will get their way by the looks of it. That said, I would say it's about time we redefine "radio". Until the legislative climate is partial to getting the RIAA out of the business of Internet Radio, we're going to have to understand that it is effectively dead in the USA.

So, I propose the following idea, even if it may not work (I'm not a geek nor a codemonkey, so I don't know if I'm even using the proper terms.)

Streaming by Torrent.
Using the model of torrent-sharing, find a way of breaking up streams in a similar manner. You won't be able to do dj-mixed shows but all the music you currently offer could end up "out there" available for streaming per cut. Once a cut is in the network, it would be available to the swarm and users could stream it from multiple sources, just like a torrent file. And since the individual stream would be broken up by the swarm, no one person would be sharing the entire cut. Were someone to intercept one stream from a swarm, it should be just gibberish, right? (If I understand how torrents work, that is.) And since a user can only listen to one stream at a time, other cuts could use their computer for distributing themselves in the swarm, whether it's one the user wants to hear or not. I liken it to how SETI uses an individual's computers during CPU idle time to process data.

A user could also "broadcast" a cut they like, torrent-style and the client software would break it up appropriately for the swarm. I could see Pandora creating such a client so you could end up with your own "radio station" compiled of music somafm likely would have played anyway.

Of course, this would mean artists would get no royalties, it would likely be considered illegal, but with streams sufficiently broken up, there would be no way of proving (that I know of, as I am also not a lawyer) that any one individual is breaking copyright law by illegally sharing or receiving copyrighted music.

If such a thing could work, I figure the "MAFIA" (I like that term, too) would be thwarted in their money grab and a new form of Internet Radio would endure.

July 11, 2007 6:33 PM  
Blogger Dustin said...

Please call Ms. Pelosi...It's real easy. You will talk to some sort of assistant (don't bother asking her if she knows anything about the bill). I would just have a canned comment ready at which point the asst will politely reply "thank you for your comments...i'll be sure to pass this along to Ms. Pelosi". Not sure if what you say matters too much, but maybe if enough people call in support of the SOMA FMs of the world, it will have an affect. Let's hope the people talk and money walks!

July 13, 2007 4:16 PM  

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