Friday, June 29, 2007

Internet Radio lacks a viable businss model?

David Lazarus, San Francisco Chronicle :
Well, there it is. Internet radio sites may be cool and convenient, but, like so many dot-coms before them, they lack a business model capable of withstanding real-world cost pressures.
The difference is that the dot-coms you refer to didn't have their costs legislated by the government, and more importantly, didn't have costs drastically different for them just because they operate on the internet. It's not like Pets.com had to spend more money on the products they sold because they were an internet company, and the law said that internet pet supply dealers had to pay more for the products they sold than brick and mortar pet stores.

All other commercial users of music pay based on a percentage of their revenues. Unfortunately, the DMCA legislated that internet broadcasters would be treated differently, largely because when the DMCA was written there weren't really any internet broadcasters to lobby for fairness. The other guys, namely the satellite radio people, made sure that they got treated fairly in the law.

We're trying to fix this now. The Internet Radio Equality Act is all about royalty equality. There is nothing real-world about government-mandated prices for one industry that do not exist in other (practically the same) industries.

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SoundExchange represents less than 10% of artists

John Simson quoted in the Hartford Courant: We [SoundExchanve] represent over 20,000 performers and over 3,000 independent labels and the four major labels.

Johnny Floater over at Live365 tells me that there are 250,000+ artists that get airplay on Live365. On SomaFM, we've played 8000 different artists this year, and we have only 11 different channels. Because SoundExchange doesn't publish a list of their member artists and labels, we can't compare our playlists to see how much of the music we play is by SoundExchange member rightsholders. But I bet we play a lot of stuff by artists and labels that aren't affiliated with SX.

There are also over 8200 artists on SoundExchange's "unpaid artists list"; artists that SoundExchange has collected statutory royalties for but hasn't distributed because you have to join SoundExchange before you can get paid. And if these people don't join within a certain point of time, they lose their royalties and SoundExchange gets to keep that money.

Bottom line: this is why we can't make a deal with SoundExchange. A deal with SoundExchange would only cover their members, and that's less than 10% of the artists out there. It would be fine if we were playing Top 40 or Big 4 label releases, those guys are all covered. But we play "long tail" stuff, and much of it is likely not going to be by SoundExchange members.

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Thursday, June 28, 2007

Future of Music Coalition

FMC, in their recent newsletter (note: not in their archive yet but will be soon), has reiterated four key points about the Internet Radio royalty situation:

(Update: I should not that I'm merely presenting this as information, and I'm not endorsing everything here. I think it is a good starting point for discussion, which is starting to take place in the comments. Make sure you read the comments to this post!)

1. Internet radio is an incredibly valuable music platform for musicians, fans and labels

FMC supports the continued growth of internet radio. It has the unparalleled ability to develop loyal, worldwide audiences for niche musical genres -- from 60s rock to contemporary classical to southern blues. Small and noncommercial webcasters in particular have proven to be a valuable promoter of both independent music and genres that are routinely ignored by commercial broadcasters.

2. Performers and labels should be paid.

We have and always will support the digital performance royalty As webcasting continues to grow, and as consumers increasingly trend towards paying for /access/ to music delivered to them via subscription services, satellite radio, etc, the digital performance royalty becomes an even more important revenue stream for artists.

3. Rates proportionate to the size of the webcasters.*

We also believe that the "one size fits all" approach that was part of the March 2007 rate setting decision would be harmful to the small and non-commercial webcasters. There's a vast difference between the staffing and revenue generated by a volunteer-run internet radio station and an AOL or Clear Channel. These differences in resources and revenue - not to mention motivation for running a station - makes a tiered system the most sensible solution.

4. Streamline the reporting process.

FMC continues to believe that it's important to develop a reporting process that ensures that even the smallest webcaster can file timely and accurate playlists with SoundExchange. For years we have urged the development of an authentication database, managed by a neutral third party, through which copyright ownership and performer information would be verified. Such a database would reduce filling time and errors on playlists, thus making sure more money flows directly to artists.

To summarize, FMC believes that large commercial webcasters should pay rates comparable to their size and revenue, and we call on the other parties to adopt reasonable rates and reporting requirements for clearly-defined categories of small, noncommercial and hobbyist webcasters that will ensure the future development of this medium.

In the end, whether through legislation, court action or negotiation, FMC hopes that the webcasters and SoundExchange can work together to strike a balance that recognizes the value of webcasting to creators and listeners, but also properly compensates performers and labels for uses of their work.

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San Francisco Podcasters Meetup

A bunch of nice people at the SF Podcasters meetup got to hear me go on about internet radio royalties.




(photo credits)

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Congressional Hearing on Internet Radio Equality Act

Video coverage of the House hearings on the Internet Radio Equality Act.

Part 1

Part 2

part 3

part 4

Part 5

Part 6

Part 7 - Mr. Lee from the American Federation of Musicians

Part 8 - Cincinnati Public Radio, Inc CEO & General Manager

Part 9 - Are webcasters trying to make a marketplace solution?

Part 10

Part 11 - The Lemonade analogy

Part 12 - Tom Lee, SoundExchange and President of AFM

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The Economist: A battle over music royalties threatens a nascent industry

From The Economist:
The quest for higher royalties may actually be doing record labels more harm than good. People generally do not buy music unless they have already heard it. Internet radio makes it easy to zero in on a preferred genre, so listeners are more likely to discover music they would want to buy. Many online stations even provide links to online music stores—free of charge.
Hey SoundExchange: wake up. Don't kill off this industry. You need it.

(Maybe if SoundExchange would focus on trying to extract royalties out of the companies not paying them at all, instead of trying to get more from the ones who are paying now, they could increase their revenues and not hurt the current net radio industry.)

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Wednesday, June 27, 2007

Listener Questions: Will this really affect SomaFM?

A listener writes:
The question I have though is how badly are "ambient" stations like Soma going to be hurt? The music labels that put out this kind of music are not the big boys. I think most of them would realize that this type of broadcast is their best bet for getting heard. Aren't the royalties up to them? As for playing top 40 on the internet. Who cares. Let them have it.
This law covers any and all copyright works, not just recordings owned by the big labels. The RIAA and big labels had a great influence over this law, but it applies to all copyrighted works. In order to play them without royalties, we need to get waivers from the copyright holders. So far many of the copyright holders are reluctant to grant us waivers.

So, we would have to go back and execute licenses directly with every copyright holder whose music we play. That would be a few thousand licenses we'd have to do. Many of the copyright holders won't sign these licenses without having a lawyer look at them, and many of them don't want to pay a lawyer to look it over. Some have already said they won't grant a waiver, even though they like us to play their music.

The reason the statutory law exists is so that radio stations won't have to enter into distinct legal agreements with the hundreds (or in our case thousands) or copyright owners of the material they play. We could easily keep one or more full time paralegals busy managing all the music licensing. It would also put large delays in the time from when we pick a song to play and when we're legally allowed to play it over the air.

Ironically, direct licensing works best for people playing the Top 40. You can enter into blanket direct licenses with the Big 4 labels pretty easily. But their license terms encourage you to play the music they're pushing heavily and discouraging you from playing the songs they're not pushing.

I believe that it is best for the listeners when we choose music based solely on its artistic merit, and not on any financial concerns. If we're playing a song just because it costs us less to play it than another song, isn't that the same as us taking payola to play a song?

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Tuesday, June 26, 2007

Overloading SaveNetRadio's servers

From this evening's Tech Daily (a DC-based tech policy digital news mag):
According to a SaveNetRadio spokesman, Web traffic reported by Capitol Advantage's Capwiz program by late morning was "far more" than the back-end service provider had ever experienced in a single day. The firm reportedly was "diverting all the resources they have to handle this traffic," the official said. Capwiz is considered one of the most robust Web-based advocacy services in Washington and works with about 1,500 organizations. "It's definitely the highest traffic we've seen in a long time for any sort of single issue," said Mark West of Capitol Advantage.

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Tremendous amounts of news coverage today

Web Radio's 'Day of Silence' Protests Royalty Increases (FOX News)
NEW YORK — Web radio broadcasters across the United States were preparing for a 'Day of Silence' on June 26 to protest the US government's plans to boost ...

Web radio sites go silent in protest (Business 2.0, CA)
New licensing fees could doom Internet radio, but webcasters are fighting back with a 'Day of Silence.' Business 2.0's Chris Taylor investigates. ...

Web Radio Stations Hope Silence Speaks Volumes About Fee Hike (Washington Post, United States)
By Mike Musgrove No, music fans, there isn'ta problem with your Web connection -- it's just that many Internet radio stations are deliberately offline today ...

Online Webcasters go silent to protest higher music royalties (Malaysia Star, Malaysia)
NEW YORK (AP) - Dozens of online music broadcasters will go silent on Tuesday to protest a new set of royalty rates that many smaller companies say would ...

Online Webcasters go silent to protest (The Age, Australia)
Dozens of online music broadcasters will go silent on Tuesday to protest a new set of royalty rates that many smaller companies say would put them out of ...

Internet Radio Outlets Protest Royalties (Forbes, NY)
AP 06.25.07, 5:50 PM ET Dozens of online music broadcasters will go silent on Tuesday to protest a new set of royalty rates that many smaller companies say ...

Internet Radio Observes Day Of Silent Protest (Information Week Weblog, NY)
The intent of the protest is to demonstrate what will be heard on July 17th, the date that 17 months of retroactive royalty payments are due. ...

World Wide Web Net Radio Goes Silent To Protest Royalty Hike (CIO Today, CA)
By Jennifer LeClaire Internet-only webcasters and broadcasters that simulcast online are protesting royalty hikes in a "Day of Silence," alerting their ...

The Sounds of Silence Will Be Heard by Millions (Top40-Charts.com, NY)
WASHINGTON, DC (Top40 Charts/ SaveNetRadio) - The regularly scheduled programming of millions of Internet radio listeners will be temporarily interrupted ...

The Day the Music Died on the Net (CIO Today, CA)
By Hiawatha Bray The Digital Music Association, which represents Internet broadcasters, has asked a federal court to suspend the Internet radio royalty fee ...

Web radio broadcasts 'sound of silence' in rate-hike protest (Manila Times, Philippines)
Internet radio listeners will tune in to the sound of silence on Tuesday as webcasters protest a sharp rise in royalty fees that critics say will force ...

Internet radio stations observe 'Day of Silence' (PopMatters, IL)
by Brad Kava SAN JOSE, Calif.—When 29 million music listeners turn to their favorite Internet radio stations Tuesday, many will be greeted with the sound of ...

Web radio broadcasts 'sound of silence' in rate-hike protest (PhysOrg.com, VA)
A man listens to the radio on his computer. US Internet radio listeners will tune in to the sound of silence on Tuesday as webcasters protest a sharp rise ...

Web radio broadcasts 'sound of silence' in protest (Middle East Times, Egypt)
LOS ANGELES, CA, USA -- US Internet radio listeners will tune in to the sound of silence Tuesday as Webcasters protest a sharp rise in royalty fees that ...

Internet radio stations to protest royalty hikes (calendarlive.com, CA)
By Jim Puzzanghera, Times Staff Writer It's a protest staged by online radio stations to preview what they say will happen when substantially higher royalty ...

Webcasters go silent as protest (Deseret News, UT)
AP NEW YORK — Dozens of online music broadcasters will go silent today to protest a new set of royalty rates that many smaller companies say would put them ...

Online Webcasters Go Silent To Protest Music Royalties (6abc.com, PA)
NEW YORK (AP) - June 25, 2007 - Dozens of online music broadcasters will go silent on Tuesday to protest a new set of royalty rates that many smaller ...

Federal Discord Over Royalty Hikes (ABC News)
Artists wail against royalty fee increases for Web broadcasters who offer a rare promotional service for independent musicians. ...

Day of silence for Net broadcasters (San Jose Mercury News,  USA)
By Brad Kava When 29 million music listeners turn to their favorite Internet radio stations today, many will be greeted with the sound of silence - but not ...

Day of Silence (Macworld, CA)
By Christopher Breen If you’re accustomed to listening to streaming Internet radio or streaming music services such as Pandora, you may be surprised to ...

If You Like Online Radio, Call Your Congresspeople -- Seriously (Wired News)
By Eliot Van Buskirk June 26, 2007 | 10:39:49 AMCategories: Save Net Radio With all the lead-up to today's "Day of Silence" for webcasters in protest of the ...

Utah Public Radio shuts down Webcast for a day (Salt Lake Tribune, United States)
AP Posted: 8:54 AM- LOGAN - Utah Public Radio will shut down regular programming on its Web stream to protest music royalties for Internet radio. ...

Is Silence Golden? (InformationWeek, NY)
Since a bunch of badly-disguised radicals trespassed on a merchant ship and tossed some of its cargo into the waters of Boston Harbor, people have come up ...

Day of Silence: Internet Radio Goes Dark (Washington Post, United States)
If you listen to music, news or other programming via the Internet, you're likely to find a soundstream of silence today. The Day of Silence is a one-day ...

'Day of silence' for US web radio (BBC News, UK)
Web radio broadcasters across the US will hold a "day of silence" on Tuesday in protest at plans to hike royalty payments when music is played online. ...

Tiny Web radio stations squawk over royalty fees (San Francisco Chronicle,  USA)
Internet radio DJs are replacing their eclectic playlists with a "Day of Silence" today, a protest against new royalty rates they say could decimate the ...

A kind of hush all over Web radio (San Diego Union Tribune, United States)
Thousands of Internet radio stations will stop the music today for the National Day of Silence, a nationwide protest of an impending increase in royalty ...

A Royalty Pain (Hartford Courant, United States)
By JANICE PODSADA, Courant Staff Writer Charles R. St. James is one of thousands of people who operate an Internet radio station. At any given time, ...

Don't silence us (Boston Globe, United States)
By Seth Kroll | June 26, 2007 FAMILY JUNCTION is a band made up of five childhood friends. We decided that, after college, we were going to take on the ...

Net radio battles royalty ruling with silence (Globe and Mail, Canada)
To paraphrase a well-used joke: if an Internet radio station falls in cyberspace, does anybody here it? That's the question many online radio listeners ...

Tomorrow: Day of Silence for Internet Radio (Wired News)
By Eliot Van Buskirk June 25, 2007 | 12:44:33 PMCategories: Save Net Radio Internet radio stations will broadcast no music tomorrow (June 26) in observance ...

Protest will silence some online music (Boston Globe, United States)
By Hiawatha Bray, Globe Staff | June 25, 2007 A swath of the Internet is set to go silent tomorrow, as online music broadcasters shut down to protest a plan ...

Internet Radio Will Go Silent on June 26th (Slashdot)
Spamicles writes "Thousands of US webcasters plan to turn off the music and go silent this Tuesday, June 26th, to draw attention to an impending royalty ...

Thousands of Webcasters Go Silent to Protest Higher Royalty Rates (Digital Media Wire, CA)
Washington - Thousands of US webcasters on Tuesday went silent, staging a day-long blackout in protest of sharply higher music royalty rates set to take ...

Webcasters to SoundExchange: No, It’s Not an All-Day Listening ... (All Things Digital, CA)
If things continue as they are, the Buggles may have to re-record their 1979 New Wave masterpiece with a new lyric: “Imbeciles Killed the Radio Star. ...

The Real Digital Divide (Huffington Post, NY)
Our government just doesn't get the Internet. And that really is a shame, because it makes grassroots web culture like Internet radio vulnerable to the ...

Internet Radio "Day of Silence" hushes thousands of stations (Ars Technica, MA)
By Jacqui Cheng | Published: June 26, 2007 - 11:51AM CT Today is June 26, and that means that it's the Internet radio Day of Silence. ...

Internet Radio Protest (Today's THV, AR)
You could be hearing the sounds of silence on your favorite Internet radio stations -- and we're not talking about the Simon and Garfunkel song. ...

Internet Radio Day of Silence is Time to Make Noise (Audio Graphics, OH)
What will tens of thousands of people do today when they find their online radio station silent? If SaveNetRadio organizers' predictions are correct, ...

Internet Radio (Digital Silence, PA)
We've been following this story for awhile and now comes another phase. If you listen to music, news or other programming via the Internet, you're likely to ...

Web Radio Goes Silent In Protest (FMQB, NJ)
As expected, tens of thousands of Webcasters across the US have silenced their streams today in protest of the impending hike in royalty fees. ...

Internet radios to observe 'Day of Silence' to protest rate hike (What is the Word, India)
The SaveNetRadio Coalition has announced that Internet broadcast stations across US will observe a day of silence in protest against the recent price hike ...

US web radio broadcasters launch silent protest (CBC New Brunswick, Canada)
Internet radio broadcasters across the United States are holding a "day of silence" on Tuesday to protest plans to raise royalty payments for music played ...

US online radio webcasters have "day of silence" in protest of new ... (Shiny Media, UK)
Web radio broadcasters in the US are having a radio "day of silence" in protest of the Copyright Royalty Board's plans to raise royalty payments for music ...

The sounds of silence will be heard by millions (Vallejo Times-Herald, CA)
By Cyndi Combs/Times-Herald staff writer Regular programming of millions of Internet radio listeners is expected to be temporarily interrupted today when ...

A Moment of Silence...for a Good Cause (Film Fodder)
This is way off-topic...but, I have previously posted on the plight of internet radio and the efforts of SaveNetRadio.org to repeal the royalty rate ...

Web Radio Day Of Silence Today (Digitaltrends.com, OR)
By Christopher Nickson If you’re tuning into web radio today and can’t find anything to listen to, don’t be surprised. Many web radio broadcasters are ...

Radio Silence (BroadbandReports.com, NY)
Today, Internet stations around America are participating in an Internet "Day of Silence" to protest a freshly passed royalty rate hike system lobbied for ...

Bid4Spots Voices Support for Internet Radio Broadcasters on This ... (Business Wire (press release), CA)
ENCINO, Calif.--(BUSINESS WIRE)--Bid4Spots (http://www.bid4Spots.com) today announced that it stands in solidarity with Internet broadcasters on this “Day ...

NEW: Internet radio stations launch protest (Gainesville Sun, FL)
By ANTHONY CLARK Thousands of Internet radio stations are going silent Tuesday to protest proposed royalty increases they say will put many Webcasters out ...

Yahoo Turns Off The Radio (WebProNews, KY)
A Day of Silence has swept across the bandwidth of a number of music webcasting services as they protest new royalty rates that could put them out of ...

Radio silence protests fee plan (Albany Times Union, NY)
By CHRIS CHURCHILL, Business writer Radio stations and music broadcasters are warning that a plan to sharply increase the royalties paid for online ...

Web Radio Goes Silent in Protest (Aversion)
A coalition of Internet radio broadcasters has gone silent today to protest royalty rate hikes for webcasters. The Save Net Radio coalition, which includes ...

Webcasters protest with silent treatment (New York Daily News, NY)
By DAVID HINCKLEY Thousands of Internet radio streams will go silent today in protest of new music royalty rates that Webcasters say could drive almost all ...

Webcasters to protest planned royalty hikes (Ventura County Star (subscription), CA)
By Jennifer Muhmel, jmuhmel@VenturaCountyStar.com People trying to listen to their favorite Internet radio stations today might be greeted with silence as ...

Web radio going silent (Attleboro Sun Chronicle, MA)
BY TED NESI SUN CHRONICLE STAFF Listeners who turn on their favorite Internet radio station today expecting to hear Bob Marley, the Monkees, ...

Internet radio going silent to protest royalty increase (Daytona Beach News-Journal, FL)
Thousands of US-based Webcasters plan to turn off their music and go silent today to draw attention to an impending royalty rate increase they say will ...

A day of silence (MSU State News, MI)
If you turn on your favorite Internet radio channel today you might find it eerily silent. Today, Internet stations around America are participating in a ...

The Sounds of Silence Will Be Heard by Millions (PR Newswire (press release), NY)
WASHINGTON, June 25 /PRNewswire-USNewswire/ -- The regularly scheduled programming of millions of Internet radio listeners will be temporarily interrupted ...

Internet Radio to Hold National 'Day of Silence' Tomorrow (Zeropaid, CA)
Thousands of US webcasters plan to hold a "Day of Silence" to draw attention to their industry's plight and protest an impending dramatic escalation of the ...

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Yahoo's Ian Rogers speaks out

Yahoo's Ian Rogers speaks out about the CRB royalty issues:
The CRB made a mistake, handed Sound Exchange a loaded gun, and gave them the option to shoot Internet radio dead. How the CRB came from the testimony presented to this outcome is a complete mystery to everyone involved. I’m guessing Sound Exchange is nearly as puzzled as we are at this point.
He also talks about how it affects big guys like Yahoo, and offers a bunch of insight into the whole CRB rate setting process, and offers some insight like:
I’ve also had the pleasure of meeting with our representatives in Congress and understanding their position. Congress doesn’t like to set rates, and I think we’d all agree that we’d prefer they didn’t micro-muck with the economy at this level. Instead, they set up a process and a standard, we all went through the process, and they’d like to think the outcome served the needs of the people. Our continued protest just sounds like “wah! the rates are too high! wah!”, which they’re sick of hearing and I don’t blame them. So we’ve been working hard to show them that the conversation here isn’t just “hey, we aren’t making as much money as we used to” but really “um, we are losing a lot of money on Internet radio, and we’re going to have to change our offering in such a way that it’s going to lose a lot of its great diversity of programming at the very least or that it’ll go away entirely at the very worst.” But it’s a tough slog and has taken a lot of convincing.
It's nice to see someone in Ian's position willing to honestly discuss this issue.

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The music industry's view of internet radio

Broadcast consultant Mark Ramsey:
The music industry doesn't care if a zillion websites play their product online. They care that a handful of megasites do - and pay for the privilege. They care that if the Internet becomes the medium by which their content is monetized, then the only folks still standing who can afford to offer their content are the ones who can monetize it.
Lots of interesting comments to this article worth reading as well.

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Thursday, June 21, 2007

Wall Street Journal: Web Broadcasters Plan Protests Over Royalties

Wall Street Journal reports:
Music fans tuning into their favorite Internet radio stations next Tuesday might hear nothing but silence.

Web broadcasters are planning to turn off their music for the day to protest higher statutory royalty rates payable to artists. Some of the largest services, including Live 365 Inc., Pandora Media Inc. and Yahoo Inc.'s Yahoo Music, are participating in the blackout, which organizer Kurt Hanson of online-radio service AccuRadio has dubbed "Day of Silence."

Alas, AOL and Clear Channel aren't participating. AOL was originally going to support it, but the executive management said no. (Apparently they didn't want to piss off their subscribers and XM.) Although it makes you wonder: AOL and Clear Channel say they can't afford the new streaming rates, but then they go on to say they can't afford to turn their streams off for a day?!

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Congressional feedback on the Internet Radio Equality Act

Jason Stoddard over at Live365 sends out some feedback from congress about the Internet Radio Equality Act:

Congressman Jay Inslee (D-WA), original sponsor of H.R. 2060

"The good news is that momentum is growing in Washington, D.C. Since its introduction in April, well over 100 members of Congress have recognized the important service webcasters provide by cosponsoring the Internet Radio Equality Act. With your continued help, that number and congressional support will keep growing as we approach July 15."
Congressman Donald Manzullo (R-IL), original sponsor of H.R. 2060
"We have had an amazing response to the Internet Radio Equality Act here in Washington, DC. Please urge your listeners to contact their Members of Congress so we can continue to build support and keep the music playing."
Senator Ron Wyden (D-OR), original sponsor of S. 1353
"Webcasters are valued members of the Internet community, and I will do all that I can to ensure that these royalty hikes don't go into effect. This effort is part of a broader issue that I am fighting for and that is the importance of protecting e-commerce from unfair discrimination. In order for this effort to succeed, we must all continue to work together to preserve Internet radio."
Senator Sam Brownback (R-KS), original sponsor of S. 1353
"The Internet Radio Equality Act (S. 1353), which I recently introduced with my colleague Senator Ron Wyden, is fundamental to the survival of the new and innovative technology of webcasting. The recent decision of the Copyright Royalty Board, which goes into effect on July 15th, will decimate an entire industry. Millions of Americans listen to Internet radio regularly, and artists whose music would not receive airplay on commercial terrestrial radio are beginning to receive royalty checks for the first time. Despite what the critics would have you believe, Internet radio benefits artists and I applaud the innovators who have made this technology possible. Senator Wyden and I recently sent a letter to Judiciary Committee Chairman Patrick Leahy requesting that the Committee quickly move to consider our bill and correct the section of the Copyright Act that allowed for this disastrous decision."

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Music First: Radio does not sell records

According to a study by Stan Liebowitz for the Center for the Analysis of Property Rights and Innovation linked (but apparently now removed) from the Music First coalition website's FAQ states:
Radio does not have the positive impact on record sales normally attributed to it. Instead, it appears to have an economically important negative impact, implying that overall radio listening is more of a substitute for the purchase of sound recordings than it is a compliment.
Screenshot of flash based site

A more detailed abstract of the study:

This paper undertakes an econometric investigation of the impact of radio play on sales of sound recordings using a sample of American cities. The results indicate that radio play appears to have an economically important negative economic impact, implying that overall radio listening is more of a substitute for the purchase of sound recordings than it is a complement. This research exposes an important fallacy of composition in applying to the entire market a conclusion based upon the positive relationship between radio broadcasts of particular sound recordings and the sales of those particular sound recordings. This finding imposes a more complete view of the implications of economic suggestions to allow the radio/record market to function unhindered by government regulations.
Unfortunately, I didn't get to read the full study before they took it down. (Maybe they took it down because they didn't have the proper copyright clearances to publish it on their site, oh the irony.) But radio Consultant Mark Ramsey, who did read the whole thing, makes this comment:
Even if we accept the conclusion that some radio listeners don't buy music and further accept that radio satisfies whatever need they have, the author of the study doesn't acknowledge the tangible difference between the stealing of music via P2P and the fact that radio stations do indeed already pay considerable license fees to play the music industry's content on the public airwaves. This notion that radio is getting something for nothing is downright offensive.
After a bit of searching, I tracked down an online preliminary version of this report (PDF) if you want to read it yourself.

Stan Liebowitz has flip-flopped about similar issues in the past, writing a paper for the CATO institute that said MP3s were killing music, then saying in 2002 the decline in music sales was in sync with the overall decline in the economy, but then in 2003 blaming MP3s for declining music sales again, based on data supplied by the RIAA.

I guess I'm just curious about how the record industry thinks people find out about new music, if it's not over the radio, or from file sharing, or what. How many people are going to want to buy something they haven't heard about?

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Non-comm WMPH Boycotts Music First Coalition Artists

The Music First Coalition is a lobbying organization created by SoundExchange and the RIAA to get get copyright law changed so that over-the-air broadcasters will have to pay additional royalties for broadcasting music much like internet and satellite radio service do.

This boycott sure didn't take long to happen:

The National Association of Broadcasters is fighting efforts by musicFirst, a new coalition of recording artists, including Christina Aguilera, Rihanna, and Natasha Bedingfield, demanding performance royalties from radio stations. "Congress has long recognized that radio airplay of music generates millions of dollars in revenue for record labels and artists," said Dennis Wharton, NAB spokesman. "Were it not for radio's free promotional airplay of music on stations all over America, most successful recording artists would still be playing in a garage."

WMPH and many other stations across the country are saying NO to this insatiable greed. The musicFirst coalition of artists is attempting to hurt the radio stations, disc jockeys, and fans that have always been their greatest ally. Radio has done so much to promote their careers by playing their music frequently, interviewing them, and mentioning their concerts and events on the air. Artists make their money by record sales and performing at concerts. Without radio's free publicity for over 60 years, most artists would likely be neither rich nor famous.

I wonder how long it will be before Clear Channel and CBS do the same?

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Wednesday, June 20, 2007

Why save internet radio?

Bruce Hagen writes in the Petaluma Argus-Courier:
The power of Internet Radio did for music and news what eBay did for retail commerce: it lowered the barrier for entry. Musicians out on “the long tail” didn’t have meet Clear Channel or Wal-Mart popularity thresholds to get a world-wide audience (long tail is a term for what you see when you plot the volume of music sales by artist. U2 is on the peak at the upper left; Toast Machine is out at the lower right, on the “long tail”). Combine this global reach with the search and collaborative filtering power of “Web 2.0”, and the radio business is revolutionized.
Full article

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Rep. Mike Doyle on Mashups

Rep. Mike Doyle (Pittsburgh) thinks that Congress should explore ways that music "mashups" could be legally sanctioned.
Here's your chance, said Rep. Mike Doyle, a Democrat whose district includes Pittsburgh. "You always hear about big powerful interests coming to Washington and writing legislation behind the scenes. How would you design a bill?" The question was directed to the congressman's lunch companion—Gregg Gillis, who under the nom de laptop Girl Talk creates digital hip-hop tunes that mash up hundreds of songs. Gillis, 25, has been gaining fame for his feverishly inventive creations. But while his last CD made the best-of-year list in Rolling Stone and Pitchfork, he can't sell it on iTunes and lives in fear of a ruinous copyright lawsuit by a label representing one of the dozens of performers he's sampled without permission.
Full article here

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Monday, June 18, 2007

Is SoundExchange allowed to be in the lobbying business?

SoundExchange is authorized by the U.S. Copyright Office (through the DMCA) to collect and distribute royalties for the performances of sound recordings over digital mediums.

So why are they now in the lobbying business? Who is paying for this lobbying? Apparently it is coming out of the royalties they're collecting from satellite and net radio broadcasters.

Maybe we should ask the Copyright Office to investigate this possible misuse of funds?

Sunday, June 17, 2007

SoundExchange starts new lobbying organization

SoundExchange starts new lobbying organization: the Music First Coalition to go after over-the-air broadcasters and remove the exemptions they were granted in the copyright act.

Mark Kadesh is the executive director of the Music First Coalition, a new lobbying coalition started by SoundExchange to go after over-the-air broadcasters for more music royalties.

Mark Kadesh, previously the Chief of Staff for Senator Dianne Feinstein, recently joined Bartlett Bendall, and they've changed their name to Bartlett, Bendall & Kadesh.

You can see why Senator Feinstein hasn't been too receptive to internet radio issues; her former chief of staff seems to have been in bed with the RIAA lobby.

And SoundExchange is one of Bartlett, Bendall & Kadesh's clients, as is the RIAA, MPAA and NBC Universal as well as Universal Music Group.

Their current and past clients include:

ALDRICH CONTEMPORARY ART MUSEUM
AMGEN, INC
APPLIED DNA SCIENCES
BICKEL & BREWER
BLACK WARRIOR - CAHABA RIVERS LAND TRUST
BOND MARKET ASSN
CALIFORNIA HEALTHCARE INSTITUTE
CITY OF CALERA, ALABAMA
COALITION FOR FAIR & AFFORDABLE LENDING
COUNTRYWIDE FINANCIAL
EASTERN HEALTH SYSTEM INC
EQUIFAX
FEDERAL HOME LOAN BANK OF ATLANTA
FEDERAL HOME LOAN MORTGAGE CORP
FINANCIAL SERVICES INSTITUTE
FIRST DATA
GENENTECH, INC
HUMAN RIGHTS CAMPAIGN
INTEL
LINCOLN CENTER FOR PERFORMING ARTS
LOVE TERMINAL PARTNERS
MAINE MEDICAL CENTER
METLIFE
METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA
MORGAN STANLEY
MOTION PICTURE ASSN OF AMERICA
NATL CENTER FOR VICTIMS OF CRIME
NBC UNIVERSAL
OPTIMAL GROUP INC
PMI GROUP INC
RESOURCES LEGACY FUND FOUNDATION
SOUNDEXCHANGE
SOUTH COAST AIR QUALITY MANAGEMENT DISTRICT
SOUTHEASTERN ECONOMIC ALLIANCE
SOUTHERN CALIFORNIA EDISON
UNIVERSAL MUSIC GROUP
WASHINGTON MUTUAL BANK
WESTERN UNION

(Source: US Senate Registrant/Client List and Senate Identification Numbers)

They also list their current clients on their web site, which includes the RIAA.

There is some lively discussion about this over at the Slyck Forums.

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Friday, June 15, 2007

SoundExchange board member: "I sincerely am starting to hate the Internet"

Great quote today in the LA Times by Jay Rosenthal (SoundExchange Board Member and co-legal counsel to the Recording Artists' Coalition):
To some this may sound crazy, but I sincerely am starting to hate the Internet. I know you see the Internet as some incredible invention that has opened the door to unlimited distribution of music—and your lofty goal is to bring music to as many as possible. But all I see is a tidal wave of artist abuse. And the thought of webcasters emulating the Groskters of the world, and being given a free pass just reinforces my view that the Internet is not becoming a beacon of light, but a cesspool of darkness. I don't think it is overstating it by concluding that illegal file sharing is the direct cause of the greatest campaign of copyright infringement in history, and has resulted in the music industry's being devastated.
They hated the cassette recorder. They hated the CD Burner. Soon they'll hate people who hum songs.

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Wednesday, June 13, 2007

PBS looks into the shaky future of internet radio stations

In "Radio Paradise Lost?," NOW on PBS looks into the shaky future of Internet radio stations pending a decision to dramatically increase royalty fees on July 15. Will it begin to drive these often small, independent outfits -- including some of you --- out of business? Please feel free to direct your users, listeners, and other followings to see the report for free as it aired on Friday, June 8

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Tuesday, June 12, 2007

Save Net Radio benefit Sunday, July 1st

If you're in San Francisco, on Sunday, July 1st we will be sponsoring an early evening (6pm-10pm) event at Bottom of the Hill to benefit the SaveNetRadio cause. The event will feature semi-acoustic mini-sets from Ted of The Heavenly States, Matt Lutz of The Herms (amongst other performers), raffles for tickets, tee shirts and other cool stuff. Elise from SomaFM's Indie Pop Rocks and Ted from Bagel Radio will be sharing the DJing duties. IODA, SonicLiving, The Owl Magazine, and MyOpenBar are all helping to co-sponsor, it is going to be a great way to spend an early summer Sunday evening.

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Saturday, June 9, 2007

The SoundExchange Billion Dollar Administrative Fee

(While this won't affect SomaFM right now, it does affect many mid-sized broadcasters like Pandora and Live365; and it will affect future personalized SomaFM stations we're working on.)

c|net: ``When the CRB decided earlier this year to change the rules for Internet broadcasters, it also decided to levy a $500 minimum annual fee per Internet radio "channel." ... But since some of the larger Internet radio services potentially offer their listeners hundreds of thousands of unique "channels" (RealNetworks' Rhapsody offered more than 400,000 in 2006 alone, according to a company spokesman), the companies view the ruling as forcing them to multiply that mandatory minimum payment accordingly (for Real, that would amount to $200 million).``

What will this admin fee pay for? One notable fee: more lawyers. And more lawsuit. They'll be able to go after all the MP3 bloggers, the music podcaters, the 5000 tiny stations in the Shoutcast.com directory who aren't licensed with SoundExchange, etc. Then they'll probably start going after all the restaurants and stores that playback background music from an iPod without paying the annual $10,000 "ephemeral" fee for business establishment services.

Slashdot has also picked this up.

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Thursday, June 7, 2007

HR.2060 update

We are up to 109 co-sponsors as of this morning on H.R. 2060. Senator Susan Collins from Maine signed on as a co-sponsor on the Senate side this morning. Good work everyone, and please keep calling!

Tuesday, June 5, 2007

tricky lawyers and new media

Fred von Lohmann (on a mailing list, quoted with permission):
The history of the 20th century makes it clear, time and time again, that new media businesses are built by "tricky lawyers" helping their clients to plant a business in the lacunae and DMZs of copyright law. Broadcast radio, cable TV, jukeboxes, VCRs, MP3 players, are just some examples. In many of those cases, the legal rationales were far more outlandish than the DMCA rationales being invoked by Web 2.0 companies (in several cases, the lawyers lost the battle, but the businesses won the war).

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Friday, June 1, 2007

Motion for stay pending appeal filed

DiMA and SaveNetRadio.com have filed a motion for a stay pending appeal. If granted this will push back the looming July 15th payment deadline.

PDF of Filing

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