Thursday, April 8, 2010

Speaking at RAIN Summit in Las Vegas

Going to Vegas for the NAB show? I'll be attending and speaking at the RAIN Summit on internet broadcasting at the Renaissance Las Vegas Hotel, Monday, April 12, 2010, 10am-7:00pm. Hope to see you there!

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Friday, January 8, 2010

Hello dear radio station!

We get email messages like this, all similarly worded, all asking for free promotional items or photos or stickers, etc.
Hello dear radio station!
I like listening to your transmission!
For many years I'm your fan, your transmission is very interesting!
I would like to know more about your radio station.
I'd like to get your photo with your autograph DJ.
And then an address in Russia.

The funny thing is we get several of these a week, to various email addresses at SomaFM, all from different addresses and cities in Russia.

Some are more demanding, asking for caps and t-shirts for them and their friends; or asking for CDs and other free giveaways.

By now, we've probably received over 100 letters like this. At first, it was fun thinking that we had fans all over Russia. But then I noticed that all the messages were generic and none of them actually referenced our programming. Some say things like "I love Black Metal music!"... obviously they don't actually listen to our station.

Is it some fad in Russia to have overseas radio promo items?

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Tuesday, January 5, 2010

Phasing out 24-56kb MP3 streams

We're going to be phasing out our lower bitrate MP3 streams in 2010, and replace them with aacPlus feeds. 24-32k MP3 streams will become 32k aacPlus streams, which sound so much better than the existing 32k streams. 56k MP3 streams will become 64k aacPlus streams.

Eventually, we'll offer 32k and 64k aacPlus streams for all our channels, 128k MP3 streams for compatibility, and 32kb Windows Media streams.

iTunes 9 now has full support for aacPlus (AAC-HE) streams, and this was the main player that didn't support it. Since 1/3-1/2 of all our traffic is people listening in iTunes, this was something that held us back from making more of a switch to aacPlus before now.

We will also be adding Flash-based streaming this year, which will work well for many people in office settings where they can't install a media player.

The listener numbers for the low bitrate MP3s has drastically fallen over the last year, and I can't think of any reason to keep the low-bitrate MP3 streams running. If you think we should for some reason, leave a comment and let me know.

I'm hoping that we'll get more adoption of the 64kb aacPlus streams which frankly sound as good or better than the 128k MP3 streams.

Happy 2010!

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Monday, October 5, 2009

You have to pay them to play their stuff?

SomaFM listener Robert hits the radio royalty thing on the head:
Beginning with iTunes and through that my intro to your excellent station, I was not listening to music at all. For me was impossible to listen too on a lot of levels. So you introduced me to electronica, remix jazz and the like. Well now I am looking at my purchased iTunes library with  1700 + songs. I was thinking; "You have to pay them to play their stuff?", they should be paying you for bringing them customers like me , where else am I or anybody else going to hear this. Personally I like listening to music again, Thank You!
Most of the indie artists we play feel this way, and many of the independent labels feel this way too. For the most part, it's the big labels with lots of back-catalog that don't see the value in radio play.

If the royalties we pay were much lower (in line with what is proposed for terrestrial radio), this wouldn't be a big issue. But considering that SoundExchange is now pushing for higher and higher rates, there isn't much hope of our getting a royalty rate on par with what the terrestrial guys will likely get.

Looks like our ultimate solution will be directly licensing tracks from artists and indie labels, and play less and less music from the big labels. (We already play less than 20% of our music from big labels, so that won't be too hard.)

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Tuesday, September 8, 2009

Snow Leapord support for aacPlus

I just noticed that the Snow Leopard Quicktime player now plays aacPlus over http via a .pls file right out of the box. If you get info while playing an aacPlus stream, it doesn't say anything special to indicate it's aacPlus: just AC, 2 channels, 22050hz. But it really is playing back as a 44.1 stream (remember that aacPlus synthesizes all audio over 10khz).

Strangely, though, RTSP streams in quicktime are NOT playing back in aacPlus! The are played back only as AAC (and hence sound like they're 22khz files rather than 44.1.)

To try it out, open up http://somafm.com/groovesalad48.pls from within Quicktime Player. You don't get Metadata but you do get the stream in full fidelity.

Now try the RTSP version:

rtsp://64.202.98.91:554/gs.sdp

Also, seems that the new Quicktime X doesn't support QTL files anymore. (This breaks all the quicktime links on the SomaFM site, we can change them to .mov files).

PS- Rumor is tomorrow's announcement of iTunes 9 will include aacPlus playback. That would indeed be exciting is that was the case!

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Thursday, June 18, 2009

Some things broke, some things improved

When Apple release the new 3.0 iPhone software yesterday, we found a bug in the SomaFM iPhone App. Here's what happens:

Some channels don't get displayed in the listings, while others are being listed twice. Well, they're not really being listed twice, for some reason the wrong text and graphics is showing up in the wrong position in that list, so it will seem like some channels are listed twice. As a temporary work-around, you can get to missing channel by clicking on one of the duplicate entries.

We're working on fixing the bug now, but we have to wait for the approval process again, so it will likely be a week or longer before the fix is available in the store. Really sorry about that. You can vent your frustrations in our iPhone support area.

In better news, the iPhone 3.0 software brings better features to our WebApp. If you have the 3.0 software installed on your iPhone, you now have access to our aacPlus streams, which sound great over EDGE networks. We have aacPlus support for Groove Salad, Space Station Soma, Secret Agent, Indie Pop Rocks and Illinois Street Lounge right now, we're planning to get a couple more channels up real soon now (most likely Boot Liquor, Lush and Drone Zone).

We've also rolled out streaming on more Nokia platforms, including the 5800, and the new Palm Pre. I'm excited how the mobile platforms are really taking off finally! It's been a long time, but internet radio in your car and wherever you are is finally starting to become common.

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Monday, March 9, 2009

SXSW Road Trip

Merin and I decided to drive from San Francisco to Austin for SXSW. We're bogging about being on the road to SXSW and what we discover along the way.

We're also road testing internet radio (SomaFM on the iPhone especially) and finding that unfortunately there are too many places on the interstate in the southwest that it still doesn't work reliably.

In addition to the blog, we're posting some updates on SomaFM's twitter (be sure to follow @somafm!)

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Sunday, March 1, 2009

Rusty speaking at SXSW on DMCA issues

I'm speaking at SXSWi on "Rewriting the DMCA: How to Improve Section 114":

``This panel will discuss the ugly bits of the Section 114 compulsory license for digital/internet music usage, and what parts are in it for historic reasons that don't apply in todays world; as well as changes that both users of the licenses (webcasters) and content providers (artists, labels) would agree to.``

Tuesday, March 17th; 11:30 am - 12:30 pm Room Hilton E

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Monday, February 16, 2009

NAB and SoundExchange make deal.

Radio Ink and other journals are reporting that NAB and SoundExchange have made a deal:

"The new agreement keeps the per-performance rate structure but reduces the rates set by the Copyright Royalty Board for 2009 and 2010 by about 16 percent and establishes rates for 2011-2015. This year's rate is $0.0015 per streamed recording, moving up to $0.0025 in 2015. The CRB rates were $0.0018 for 2009 and $0.0019 for 2010."

For a station that plays music 24/7, and assuming 10 songs per hour, this equates to about $11 (in 2009) scaling to $18 (in 2015) per concurrent listener per month (or AQH persons) for their internet broadcasts... or in listener hours, 1.5 cents (2009) to 2.5 cents (2015) per listener hour per month for internet streams.

For a station doing 150,000 hours a month (205 average concurrent listeners per month) that would be around $2250 a month in SoundExchange royalties. 150,000 hours a month is typical of a lot of larger-market FM simulcast netcasts, to that's a typical number.

But we have way more listeners on net than that, and do more like 3 million listener hours (counting only US listeners). So SomaFM would be paying over $45,000 a MONTH at these rates. (Actually more, because without commercials, we play more songs per hour than an AM/FM station does.)

The only way this makes sense for broadcasters is if they're predominately talk or they're getting waivers in exchange for airplay of tracks.

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Monday, February 9, 2009

Does the New Administration change anything for radio royalties?

It seems that the RIAA, Recording Academy and MusicFirst think the new administration will be more on their side than the old administration:

Neil Portnow, CEO of the Recording Academy said last night at the Grammys:

“When it comes to protecting a musician's intellectual property and the right to earn a living, The Academy says, "Yes, we can!" And with a new Congress, we will champion the passage of pending legislation to ensure, that just like in every developed country in the world, all music creators are compensated for their performances when played on traditional radio.”

Historical datapoint: he DMCA was passed under the Clinton administration, and the DMCA is what has placed huge royalties on internet radio. The Performance Rights Act of 2009 will add those same royalties on over-the-air broadcasters that internet broadcasters now pay. While on one hand, I think it's great that there is equality for over-the-air (often referred to as terrestrial) broadcasters, but I'm concerned that rather than one fair, small royalty placed on everyone will actually end up being one really large royalty levied on all broadcasters, terrestrial and internet.

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SoundExchange Offers Settlement To Webcasters

Billboard is reporting that SoundExchange has made a new settlement offer to webcasters: but it's not the results of negotiation, it's a unilateral offer, and it's ultimately won't work for webcasters like SomaFM.

I'm quoted in the Billboard article saying:

"'We're disappointed with the offer,' says Rusty Hodge, founder of SomaFM. 'It effectively is worse that the previous [one]. Basically SoundExchange has done nothing to comprise with webcasters at all.'"

This hasn't been a negotiation. This has been a series of offers that gets worse each time. The original SWSA passed in 2002 was better than the current offer. The offer made about 18 months ago was the same as the current offer except that there were less strings attached; and because at that point, the offer only applied to SoundExchange member artists.

The current offer is just the same old offer with more restrictions and limitations. There has been no compromise. Every counter-offer webcasters make is met with a less-desirable offer from SoundExchange.

The really big issue for SomaFM is the traffic limits of 5 million monthly aggregate tuning hours. While that number sounds big, in January, we did did about 6.2 million. 5 million monthly tuning hours equates to 6720 average concurrent listeners. And the SoundExchange offer technically applies to US-only listener hours, which is about 50-55% of our listeners, so we're still technically under the limit. But this means that as we grow in the future we're going to hit that cap, and we'll be forced to limit the number of listeners we have.

The big RIAA labels are threatened by independent internet broadcasters and want to make sure that we're constrained to a niche market.

We're very disappointed with this so-called "offer".

The RIAA is still out to kill off independent webcasters like SomaFM.

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Wednesday, February 4, 2009

Conyers, Issa Re-introduce Bipartisan Performance Rights Legislation

This bill as it stands probably doesn't do much for webcasters, other than propose to take away the exemption for terrestrial broadcasters. I'm disappointed that it doesn't say that all forms of broadcasting will pay the same price, be it terrestrial or digital. Media Week has more on the story, including the response from the NAB, including this quote from NAB's letter to House Speaker Nancy Pelosi:
Three of the four largest record label conglomerates -- Universal Music Group, Sony Music Entertainment and EMI -- are internationally-based" and "although the big record labels have seen their revenues decline over the last decade, local radio broadcasters are not the reason the recording industry is losing money, and it should not be the industry to fix it.
 

Here's the text of the press release:  

WASHINGTON. D.C. – Today, House Judiciary Committee Chairman John Conyers, Jr. (D-MI), and Darrell Issa (R-CA), introduced The Performance Rights Act, a bipartisan measure that takes a first step at ensuring that all radio platforms are treated in a similar manner and that those who perform music are paid for their work.   

The legislation would amend an inequity in America's copyright law that exempts over-the-air broadcasters from paying those who perform the music that we listen to on AM and FM radio.  Webcasters, satellite radio providers and cable companies are presently required to pay for music they broadcast.   

"Beyond the fairness that this bill provides for performers, we have an opportunity to show the rest of the world that the United States practices what it preaches in protecting intellectual property," said Issa. "For the past 70 years Congress has ignored the constitutional mandate that we protect copyrights by completely exempting broadcasters from paying performers, while the vast majority of countries have no such exemption.  Our ignorance of intellectual property rights on this issue is a worldwide embarrassment and it must end now."   

"All those in the creative chain of musical production - the artists, musicians, and others who enrich us culturally - deserve to be justly compensated for their work," said Conyers.  "We have introduced the Performance Rights Act to ensure fairness so that any service that plays music pays those who create and own the recordings - just as satellite, cable and internet radio stations currently do. Working with the Senate, I hope that Congress may act quickly to pass this important legislation to level the playing field between different technologies and ensure rightful compensation to performers."  

  The Performance Rights Act is cosponsored by Reps. Issa, Berman, Waxman, Blackburn, Hodes, Wasserman Schultz, Weiner, Cohen, Nadler, Wexler, Peterson (MN), Johnson (GA), Schiff, Sherman, Shadegg, Jackson Lee, L. Sanchez, and Harman. Companion legislation was introduced Wednesday in the Senate by Judiciary Committee Chairman Patrick Leahy (D-Vt.) and former Chairman Senator Orrin Hatch (R-Utah).   

"In introducing the Performance Rights Act, we are sensitive to the needs of broadcast radio stations," said Senator Patrick Leahy (D-Vt.), Chairman of the Senate Judiciary Committee.  "I want to ensure that the performing artist, the one whose sound recordings drive the success of broadcast radio, is compensated fairly.  Our legislation, appropriately, permits noncommercial stations to take advantage of the statutory copyright license subject only to a nominal annual payment to the artists.  Similarly, we intend to nurture, not threaten, small commercial broadcasters.  Smaller music stations are working hard to serve their local communities while finding the right formula to increase their audience size.  I will continue to work with the broadcasters – large and small, commercial and noncommercial – to strike the right balance."    

"This legislation would ensure that musical performers and songwriters receive fair compensation from all companies across the broadcast spectrum - not just from Web casters, satellite radio providers and cable companies," said Senator Orrin Hatch (R-Utah), former Chairman of the Senate Judiciary Committee.  "It is an attempt to strike a harmonious balance between fair compensation for artists and a vibrant radio industry in the U.S."   

 

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Tuesday, October 7, 2008

Wasn't internet radio killed last year?

KG Writes in:
I thought internet radio was killed last year. What gives?

SomaFM and most other internet broadcasters have technically been operating "out of compliance" (that is, we're not paying the royalties we are supposed to be paying). At some point, we can't keep doing this... someone will sue us for copyright infringement. SoundExchange has informally agreed to not sue any broadcasters who continue negotiations with them, that's why stations are still on the air. Other large services like iMeem and Last.FM have made direct deals with the large record labels, in most cases resulting in the "Big 4" record labels owning a part of those companies. (And with that ownership comes influence over the music they feature.)

So making a deal with the big record labels is not acceptable for most broadcasters who strive to be independent in the music they broadcast.

We have continued to negotiate with SoundExchange (the agency that collects the royalties) over the last year, and are close to a settlement. Originally, one problem was that a SoundExchange settlement would only cover their members, and not apply to all music as the CRB ruling did, unless congress acted to codify any settlements. HR. 7084 which was recently signed into law, does exactly that: it tells the CRB that they have to codify any settlement internet broadcasters and SoundExchange agree to. This is the only way we can get the royalties reduced to a reasonable level.

Internet radio is running on borrowed time. But even without a deal, big, venture-capital funded services like Pandora will likely survive in a slightly altered form: they'll have to make deals with all the major labels which will cause them to lose some of their independence. But small stations like SomaFM will be put out of business: either by lawsuits from the RIAA if we continue to operate without paying the royalty fees or more likely by just not having enough money to continue our operations after paying all these royalties.

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Wednesday, October 1, 2008

H.R.7084 passed in the Senate!

Monday, September 29, 2008

NAB drops opposition to HR 7084

I just got a call from Dennis Wharton at NAB, who told me that the NAB is now supporting the bill.

From what I'm reading on cnet and a few other places, NAB was concerned that they wouldn't get their own deal in time and didn't want to have web-only broadcasters get an unfair advantage over them. But a compromise they asked for was simple: extend the date of the bill to Feb 15th, 2009, and they're all for it.

No problem! The date extension is useful to other groups as well who are trying to negotiate deals, and the only possible opposition of the date extension would possibly be SoundExchange- just because they want to see this settled ASAP and not to continue dragging on.

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Sunday, September 28, 2008

Zoe Lofgren supporting the Webcaster Settlement Act of 2008

Zoe Lofgren (D - CA) on the Webcaster Settlement Act of 2008. It passed in the house, but still needs to pass in the Senate, and the NAB is opposing it.

Don't forget: we still need to get it passed in the Senate!

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Saturday, September 27, 2008

Webcaster Settlement Act of 2008 passes in the House!

Thanks to everyone who called their representatives. The Webcaster Settlement Act of 2008 has passed the house, now it's onto the Senate. We'll need to call them in the next 24 hours and ask for the support of "HR 7084, The Webcaster Settlement Act of 2008" (it's still called HR even though it's in the Senate).

Look up your Senator's phone number and call them. You can leave a voice message after hours.

All you need to say is "Please support HR 7084, The Webcaster Settlement Act of 2008, in the Senate. I support internet radio and want to see a fair royalty agreed upon."

The Senate will resume Monday morning, September 29th, and will consider this in the morning. If we leave messages this weekend, we can show that there is considerable grass roots support for it, and it will greatly lessen the impact of the NAB's opposition to it. And calling on Monday as well is a good thing to do; as there is a good chance it won't be passed first thing.

Summary & Background

H.R. 7084 contains technical amendments to the Small Webcasting Settlement Act of 2002 (P.L. 107-321) which will permit commercial and noncommercial webcasters to negotiate royalty rates and terms other than those determined by the Copyright Royalty Board (CRB) in its May 2007 decision. That decision was the basis for legislation introduced last year and is currently subject to a legal challenge at the D.C. Circuit Court of Appeals, which has, thus far, upheld the market rates and terms set by the CRB.

The principal purpose of the legislation is to facilitate a reduction in Internet streaming rates, something H.R. 7084 will permit to be voluntarily negotiated by willing parties rather than imposed by Congress. Essentially, this bill will allow SoundExchange, the organization which collects royalties on behalf of the music industry, to reach a settlement with the Digital Media Association, the national trade organization for the online audio and video industries.

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Friday, September 26, 2008

NAB opposing Webcaster Settlement Act of 2008

According to CNET: NAB, the National Association of Broadcasters, is opposing the Webcaster Settlement Act of 2008:

(CNET quoting a NAB representative) "NAB has concerns related to Congress attempting to fast-track a bill introduced less than 24 hours ago that could have serious implications for broadcasters, webcasters, and consumers of music. NAB spent more than a year trying to work out an equitable agreement on webcasting rates, only to be stonewalled by SoundExchange and the record labels. We will continue to work with policymakers on a solution that is fair to all parties."

I don't get it, you'd think this would be in AM/FM's interests as well, as it will let NAB negotiate a deal and have it codified as well. This doesn't limit deals to a single, specific organization.

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Webcaster Settlement Act of 2008 introduced

DiMA and SaveNetRadio announced that H.R. 7084: “Webcaster Settlement Act of 2008” was introduced, and clears a path for private negotiations to continue while Congress is in recess.

Basically this bill says: when the parties agree to a settlement, the CRB publishes it in the Federal Register, and it becomes an option qualified webcasters can elect, by re-wording the Small Commercial Webcasters provisions from 2002 to be applied to all webcasters, and for the period of 11 years from 1/1/2006.

So effectively, this will allow any SoundExchange settlement to be codified, and apply to all sound recordings, not just those represented by SoundExchange. I think is a good thing.

Trade organization DiMA (who represents the larger internet broadcasters like AOL and Pandora) says:

This bill does not affect the scope of performance rights or any underlying copyright law, and it does not impact broadcasters. It only clears the path for private negotiations to continue while Congress is in recess. It is scheduled to be considered today under Suspension of the Rules in the House.

I just spoke with John Simson and he confirmed that SoundExchange supports this as well.

Kirt Hanson in RAIN says ``H.R. 7084 is a bipartisan bill introduced by Congressmen Inslee, Conyers, Smith, Berman, and Manzullo and apparently supported by SoundExchange, the RIAA, NPR, and DiMA. It is scheduled to be considered today under Suspension of the Rules in the House.`` http://www.kurthanson.com

Here's the Save Net Radio release:

WASHINGTON D.C. –Today, Congress introduced legislation that will provide critical life support into the negotiations regarding the drastically increased performance royalties for Internet webcasters. H.R. 7084, the Webcaster Settlement Act of 2008, authorizes SoundExchange, on behalf of copyright owners and performers, to negotiate an alternative royalty agreement before the end of the year with any Internet radio service. This legislation will benefit all webcasters, including NPR, college webcasters, small webcasters and broadcasters who put their stations on the Internet. Because Internet radio royalties operate under a government license, Congressional authority is required to allow any negotiated settlement to take effect.

“Passage of this bipartisan legislation will ensure that the progress in negotiations over the last several weeks between webcasters and SoundExchange can continue and, we hope, lead to a solution that allows Internet radio to survive and thrive,” said Jake Ward, spokesperson for the SaveNetRadio Coalition. “The SaveNetRadio coalition, and the thousands of webcasters, artists and Internet radio listeners it represents, thanks Reps. Inslee, Berman, Smith, Conyers and Manzullo for their sponsorship of this critical legislation and greatly appreciates their continued attention and leadership on this issue.”

H.R. 7084 is scheduled to be considered today under Suspension of the Rules in the House. This bill does not affect the scope of performance rights or any underlying copyright law, and it does not impact broadcasters, it only clears the path for private negotiations to continue while Congress is in recess.

BACKGROUND:

A March 2, 2007, decision by the Copyright Royalty Board (CRB), a division of the Library of Congress charged with establishing performance royalty rates for “digital radio” broadcasters, increased rates for webcasters by an unjustified and unprecedented 300 to 1200 percent.

Since the Copyright Royalty Board (CRB) increase royalty rates for webcasters 16 months ago, there has been an immediate and devastating effect on Internet radio services. Three of the most-listened-to services (AOL Radio, Yahoo! Radio and Pandora) have either left the business, limited listener access to their services, or announced they are likely to shut down in the near future if royalties are not significantly reduced. Just as importantly from the perspective of the artists that depend upon Internet radio, recent Arbitron data demonstrates clearly that royalty-paying webcast listening has diminished substantially since the CRB decision.

Legislation introduced last year to correct the discrepancy between Internet radio and cable and satellite radio providers by establishing an equal rate for all digital radio – cable, satellite and internet radio – at 7.5% of revenue is still pending with more than 150 Congressional cosponsors. The Internet Radio Equality Act (S. 1353/H.R. 2060) was introduced in the U.S. Senate by Ron Wyden (D-OR) and Sam Brownback (R-KA) and in the House by Congressman Jay Inslee (D-WA) and Don Manzullo (R-IL).

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Wednesday, September 24, 2008

The internet radio royalty issue is NOT settled, as some news sources have reported

The Internet Radio proceeding has not been settled. We are still trying to get a settlement with SoundExchange which can be approved by the CRB judges.

This ruling only applies to Section 115 of the copyright law, and covers "interactive streaming music and limited digital downloads," and it's only the royalties that cover the "composition" of the recording, not the sound recording. Interactive streaming is defined as music on demand, such as Rhapsody or Napster, and not services like Pandora or SomaFM.

Basically, this settled things for Rhapsody, iTunes, Napster and a few others; it doesn't affect streaming radio stations at all. :-( Our issue is with SoundExchange over the "sound recording" part of the copyright royalties, we already have a suitable agreement with the licensing agencies that handle the "composition" (BMI, SESAC, ASCAP).

Attorney David Oxenford discusses this in his blog:

While many press reports (at least some of which have already been pulled) have concluded that this is a settlement of the Internet Radio royalties proceeding - that is wrong. The Internet radio royalty proceeding involves Section 114, not Section 115, of the Copyright Act. Section 114 deals with a royalty paid to the performers, not the composers.

And it's not about paying the RIAA. The RIAA was on the other side of the table from the music publishers. Because Sound Recording copyright owners have to pay the composers when they release tracks (on CD or digitally). So in this case, the RIAA is the buyer, where as with internet radio, the RIAA is in the position of the seller (at least they claim to represent 80% of the sellers).

Internet radio is still in trouble. This did not solve things.

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Tuesday, September 23, 2008

Speaking on Panel at AES show in San Francisco 10/5/08

I'll be speaking at The Audio Engineering Society show in San Francisco, Sunday October 5, 2008; 9am - 10:45am. Yes, they cruelly scheduled me for a Sunday morning time slot!

The panel is titled, "Internet Streaming - Audio Quality, Measurement, & Monitoring". I'll mostly be talking about audio quality issues and a bit about monitoring (SomaFM developed a bunch of in-house tools to monitor our streams which work pretty well).

The official description: Streaming has become a provider of audio and video content to the public. Now that the public has recognized the medium, the provider needs to deliver the content with a quality comparable to other mediums.

The Moderator is David Bialik. Panelists include Geir Skaaden, Neural Audio; Skip Pizzi, Radio World; Ray Archie, CBS Radio; Rusty Hodge, SomaFM; and Benjamin Larson, Streambox Inc.

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Monday, September 8, 2008

Can Payola can save Internet Radio?

Doug Perlson writing in Silicon Alley Insider thinks that Payola can save Internet Radio from the high royalties that we currently face.

From strictly a financial-gain perspective, he may be right.

But for broadcasters looking for a long-term sustainable business, and not a short term financial gain (such as getting bought out by a larger company), this approach will not have success.

First off, "Payola" is not illegal in the net-radio space. In fact, it's already happening lots of places. The big labels have equity positions in several of the largest webcasters. You don't think those labels are influencing what gets played? Of course they do.

SoundExchange (the agency that collects the royalties for internet radio) is even encouraging this behavior, suggesting that stations work with labels to play the music that labels will let them use without royalties... except those deals are always more complex than that. (Basically, they give the labels control over what gets played. "You can use this particular music for free, only if you give x number of plays to these other tracks.")

I'm happy that some of the larger guys, like Pandora, have demonstrated their opposition to this. But many others, who are proponents of "direct licensing deals" are already playing the Payola game.

Music should be chosen on its artistic merit, not because of a opportunistic financial decision.

Payola, while technically illegal, has still been happening at AM/FM radio stations (under the guise of "independent promotion"). Many FM radio stations were so reliant on "promo money" that it was a significant part of their annual operating budgets- especially in mid and smaller markets. And while this practice has come under fire and largely discontinued just recently, many variations on the game sill exist, and you're fooling yourself if you think that labels have stopped using money to influence program and music directors.

Many people (including myself) believe that this is what has caused consumers to turn away from commercial radio: programmers were playing what they were paid to play rather than choosing the best material to play. So commercial FM became the land of the safe, proven hits of the past and the crap that the labels were paying to get played.

The people who say this would work for net radio have never been on the receiving end of the music promotion industry. There are tons of crappy records that labels (big and small) would happily pay to get played on the radio. But listeners are smart, and have plenty of options to choose what they want to listen to. They'll just start "tuning out" if this happens.

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Tuesday, September 2, 2008

Will Comcast's streaming caps impact SomaFM listeners?

I've gotten a lot of questions lately about Comcast's streaming caps, and how they might affect listening to SomaFM?

Comcast's cap averages out to about 770 Kbps continuous average bandwidth usage, or about half the capacity of a T1 line. Or about 6 times the bandwidth required to listen to SomaFM. So you could listen to SomaFM 24 hours a day, 7 days a week and use only about 1/6th of the bandwidth you're allowed to use under the new Comcast rules.

For most users, Comcast's limits won't affect them. The main people who will be affected are those who download and share lots of files. Even people who use lots of streaming video likely won't be affected by these limits.

So as far as listening to SomaFM goes, the limits being imposed by Comcast shouldn't affect you.

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Friday, August 8, 2008

SXSW Panel Idea proposals

I have proposed a couple panels for SXSW, which have been

Making Music Sound Better Online: Improving Flow and Presentation: Most music services present music like a jukebox, not a professional DJ. Songs stacked serially, not flowing together for various reasons: tonal balance, loudness levels, speed and intensity. We discuss improving that presentation: automated mixing and segue tools; "harmonic key mixing" tracks; improving sound quality of MP3s and alternative Codecs; audio processing systems keeping subjective loudness and tone consistent.

One thing I want to discuss on this panel is broadcast audio processing, and the FM "loudness wars", and why "loudness" doesn't really matter for internet audio but why consistent audio levels are really important. (It's one of my pet peeves, and there are a lot of big services that don't get that right now.)

Rewriting the DMCA: How to Improve Section 114: This panel will discuss the ugly bits of the Section 114 compulsory license for digital/internet music usage, and what parts are in it for historic reasons that don't apply in todays world; as well as changes that both users of the licenses (webcasters) and content providers (artists, labels) would agree to.

Many people agree that certain aspects of Section 114 are obsolete. Others think the DMCA should provide more protection and compensation for creators. Some want to simplify the rules, and others think it doesn't go far enough.

Imagine we could re-write Section 114 today, knowing what we now know. How would it be different? What would be the same?

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Wednesday, July 30, 2008

Internet radio sites push for lower royalties for artists

Austin American-Statesman:

Internet radio sites push for lower royalties for artists

"Satellite and cable radio stations pay royalties at a rate of less than 15 percent - far less than Internet sites - Kennedy said. Traditional AM/FM radio stations are exempt from paying royalties.

Sen. Ron Wyden, D-Ore., who has sponsored one of the Internet radio bills, said the royalty fee schedule improperly imposes the highest rates on the newest forms of technology.

'We are allowing the royalty process to serve as a tax on technology and that is discrimination against innovation,' he said."

Lots of information in the full article, the above was just a brief quote.

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Monday, July 28, 2008

San Francisco Music Tech Conference Video

I moderated a panel at the San Francisco Music Tech conference on a bunch of different streaming technology issues.

The plan was for this to be a discussion panel about where streaming technologies are going, and what can be taken advantage of now, and what's coming down the pipe soon. We can also talk about what is really needed, vs what "solutions" that the market is pushing right now.

You can't really see me in this video, only my hands in the left side of the frame!

Left to right:

John Richey - Wireless Music Delivery Expert, Apple (he's half out of the frame, sorrt).

Greg Ogonowski - VP of New Product Development, Orban

Tim Pozar - CEO, Late Night Software and former VP of Engineering, UnitedLayer

Chris Grigg - Head of Standards, Beatnick

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Thursday, July 10, 2008

iPhone streams updated for 2.0/3G

Until today, our iPhone/iPod Touch streams were only working on the current iPhones with the 1.x software. Now thanks to some testing by Mark Malone at Apple, we've updated our iPhone streams to work with the 2.0 software and the 3G iPhones coming out on Friday. So now our streams work on both old and new iPhones and iPod touches. While I haven't had a chance to test the 3G data network with a new iPhone, you should be able to use the WiFi streams when you're on the ATT 3G network. I'll be interested to see how it works out!

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Friday, June 20, 2008

We rolled out iPhone streaming today!

After a lot of testing, we rolled out iPhone streaming tonight. I'm still not completely happy with the look of our iPhone mini-site so you might see some changes in the near future, but rather than wait until everything was perfect, I decided to release it now.

So now when you go to somafm.com on your iPhone, you get an iPhone-specific site with links for both EDGE (32-56k) and WiFi (128k) streams.

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Thursday, May 15, 2008

Save Net Radio Press Release

INTERNET RADIO MAKES A COMEBACK IN THE SENATE The Grassroots Movement to Save Internet Radio from Extinction is Reinvigorated by Senate Judiciary Committee – Brownback Offers Industry Saving Legislation

Save Net Radio Press Release

WASHINGTON D.C. – Legislation introduced in the House and the Senate last year to bring parity and equality to the new radio market made a comeback today during a Senate Judiciary mark-up. The Internet Radio Equality Act (IREA), which would establish a flat rate for performance royalty fees paid by cable, satellite and Internet radio providers, was offered as an amendment to the Orphan Works Act of 2008 (S. 2913) by Senator Sam Brownback (R-KS) during a scheduled mark-up of the intellectual property legislation today.

The amendment, which was later withdrawn, signals the renewed efforts of Net radio webcasters to reverse an unprecedented 2007 rate increase by the Copyright Royalty Board (CRB) that threatens to bankrupt the industry. Expressing his “strong support for internet radio,” Chairman Leahy welcomed future consideration of Internet radio royalties.

“It has been more than a year since the CRB raised the cost of webcasting to an untenable amount,” said Jake Ward, spokesperson for the SaveNetRadio campaign, “and all we are is a year older. Last year, more than two million people called on Congress to take action, and 150 Members in the House and Senate heard them and signed on in support of the Internet Radio Equality Act, but we still don’t have a solution. In the past year, rates have been set for net radio’s direct competition, satellite and cable radio providers, at a rate three and four times less than their proposals to Internet radio. It is disappointing and absurd that while Net radio is fighting for its survival, the industry has been put at an even greater disadvantage. This is unacceptable and hardly the good faith negotiations the House Commerce committee directed SoundExchange to participate in more than nine months ago.”

“Senator Brownback has been a staunch ally of small businesses and independent artists whose livelihoods depend on Internet radio since this fight began a year ago,” Ward continued. ”The offering of the amendment today and Senator Brownback’s leadership and dedication to equality should serve as a reminder to other Members that Internet radio and its tens of millions of supporters are not going away quietly. We should all be in this together. This continued battle is perlexing but we are committed to fighting for fairness – fairness for artists, fairness for independent labels, and fairness for webcasters. In the coming weeks and months, SaveNetRadio will be directing our formidable grassroots to support legislation that ensures artists are fairly compensated while leveling the playing field for webcasters.”

Following a March 2, 2007, decision by the Copyright Royalty Board (CRB), a division of the Library of Congress charged with establishing performance royalty rates for “digital radio” broadcasters, to increase rates for webcasters by an unjustified and unprecedented 300 to 1200 percent, a national coalition of webcasters, independent artists and Net radio listeners began petitioning Congress to take action. The Internet Radio Equality Act (S. 1353/H.R. 2060), which would set the rate for all digital radio – cable, satellite and internet radio – at 7.5% of revenue, was introduced in the U.S. Senate by Ron Wyden (D-OR) and Sam Brownback (R-KA) and in the House by Congressman Jay Inslee (D-WA) and Don Manzullo (R-IL).

In November of 2007, SoundExchange formally proposed that cable radio services pay royalties between 7.25% and 7.5% of their revenue to sound recording copyright owners and recording artists. The following month, the Copyright Royalty Board, citing market constraints and a desire not to disrupt the industry, further reduced the royalty rate for satellite radio to 6% of broadcaster revenue –increased incrementally to 8% over the next five years. Cable and satellite radio generated $2 billion in 2006 while Internet radio produced less than $150 million. Under the current CRB ruling webcasters would pay an average 30% of revenue in royalty fees – and as much as 150% in some cases.

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Radio And Internet Newsletter reports: SENATE JUDICIARY COMMITTEE TO LOOK AT WEBCASTING ROYALTIES

SENATE JUDICIARY COMMITTEE TO LOOK AT WEBCASTING ROYALTIES:

"At a hearing of the Senate Judiciary committee this morning, Sen. Sam Brownback (R-KS) revived the issue of Internet radio performance royalties by proposing to add the Internet Radio Equality Act as an amendment to an unrelated copyright bill. Committee chairman Sen. Patrick Leahy (D-VT), while expressing his support for webcasters, countered by suggesting that the committee examine the issue in June in the context of broadcast radio performance royalties.

[RAIN will] have more details as they emerge. You can also check the SaveNetRadio website here: http://www.savenetradio.org."
I guess it may be time to go back to Washington DC again. Perhaps this time we can get some traction on that bill.

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Tuesday, May 6, 2008

SanFran MusicTech Summit

I'll be moderating a panel on new developments in streaming at the SanFran MusicTech Summit this Thursday, May 8th at the Hotel Kabuki. Our panel will start at 1:50pm in the Osaka Room (the downstairs room behind the Spring Room). With me will be:

John Richey - Wireless Music Delivery Expert, Apple
Greg Ogonowski - VP of New Product Development, Orban
Chris Grigg - Head of Standards, Beatnick
Tim Pozar - VP of Engineering, UnitedLayer

We're going to be talking about delivery methods. New codecs. Streaming to mobile devices. Internet radio hardware devices. How to determine if you really need a content delivery network. It should be real fun.

Here's a blurb about the summit:

The SanFran MusicTech Summit will bring together digital thought leaders from the San Francisco Bay Area, as well as from all around the country to the region which currently leads the way in innovating (both socially, and technologically) new ways of interacting with both music, and musicians. We will be working long term to help enable a sustainable, ongoing, Northern California based music and related technology market.

Register for the Summit here

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Tuesday, April 15, 2008

EVDO, Wireless Performance, Radio Remote broadcasts and violating your terms of service

As I sit here in my Las Vegas Motel Room (the Best Western Mardi Gras, selected only on the basis of price and proximity to the Las Vegas Convention Center, where NAB is taking place) I'm thinking about how bad wireless performance is in general.

Right now, I'm typing over EVDO, because the hotel internet - powered by Lodgenet's StayOnline - is completely dysfunctional ("timeout connecting to network"). This is the same StayOnline that gave us so much trouble at the Marriott in Austin when we were trying to cover SXSW. I guess I should learn never to depend on the in-room wireless internet at most hotels/motels, because if the hotel is busy at all - the network will be unusable.

But, we have an EVDO card! We bring our own bandwidth with us rather than rely on the hotel internet, because that way we can always have internet access over "Sprint's EVDO Rev. A networks with data speeds up to 3.1 Mbps!" Only it doesn't work that way. In fact, these days, we're lucky if we get 500kb down. Here's what I get from the Speakeasy Speed Test:

SafariScreenSnapz001.png
Not too impressive.

You see the problem happens when there are too many EVDO users. And for Sprint (like Verizon), that means all the people that have their multimedia phones. And there are more and more of those out there all the time, fighting for the finite amount of bandwidth at each cell site.

We really saw this last weekend, when we webcast from Yuri's Night. At first, the webcast worked great. We had plenty of speed. But as all the geeks started arriving for the big party that evening, the network started getting slower and slower. By 8pm, that stream (from Stage 2) rebuffered so much it was pretty much unusable.

We were doing the main stage broadcasts from WayneCo's Bus which is equipped with a Motosat satellite internet uplink, which usually only gets about 256kb max for uplinks, unless you pay a hefty additional fee (which uses multiple transponders). So we didn't have enough bandwidth to stream both from the bus, and had to resort to EVDO for the other stage.

waynecobus.jpg

WiFi was also out of the question. With 5 SSIDs visible, the only reliable one was the backhaul network for the ticket booths, and not connected to the internet. The public internet was so overloaded that it often disappeared for minutes at a time. And only once were we able to maintain a connection, and that was before the event started. So we couldn't WiFi between our encoding gear at Stage 2 and the bus.

Everyone is always making promises of the happy wonderful infinite bandwidth wireless future. But it's still a way off. In a crowded situation, WiFi is about as useful as a CB radio, OK for really short distances, but for useful distances (200 feet or more) it falls apart. In this case, we could barely get 40 feet out of the WiFi base station in the bus to a remote machine. Sprint's EVDO works great sometime (4am in the morning in places where there aren't many users, for example) but lately in many different places we've used it, the service is over subscribed and slow, slow, slow.

Verizon's EVDO works just as badly as Sprint.

Wayne de Geere, who graciously provided his bus as our base of operations, has a Verizon EVDO, which worked about as poorly as the Sprint one. We chose the Sprint service because of Verizon's Terms of Service actually prohibit streaming audio and/or video and updating webcams and pretty much anything actually useful you'd do with their service. Sprint's restrictions are pretty much limited to things that violate the law.

Bottom line: we should have brought lots of wire. And run 600 ohm balanced audio from the stages back to where we were. Or installed wired ethernet connections to each stage. Or used something like a Marti SRPT 30 analog remote pickup unit, the technology that terrestrial radio broadcasters have been using for 30+ years.

SRPT_30_MRTPMN.jpg
Low tech, old fashioned, but tried and true.

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Friday, March 28, 2008

Multicasting from the archives

Me, 5-Mar-99: ``Multicasting. It's close. And it is going to revolutionize internet radio.``

Man, I got that one wrong! Multicasting never caught on, not because the technology was bad but because there were never any business reasons for ISPs to enable multicast support in their backbone routers... there was no financial incentive for ISPs to support it; rather it was something that would ultimately cost them money to support it, and there was no way for them to effectively get paid for carrying the multicast traffic on their networks.

There was (and still is) no settlement model, hence no business incentive for multicasting. That's the main reason it never took off.

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Sunday, March 2, 2008

Nine years ago....

Nine years ago, "Soma FM" appeared in the Shoutcast.com listings; it's when we turned on our first server (with thanks to Sam Habash who setup our first server at Best.com).

Here's how I described our first channel: ``a mix of ambient groove and electronica with obscure 70s music and the occasional drop in``.

Within a year, we'd have 3 channels: Groove Salad, Drone Zone and Secret Agent.

We didn't register SomaFM.com until Feb of 2000, and the website - more like a "web page" - appeared around March of 2000.

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Friday, February 22, 2008

Internet Music Radio and Track Plays Chart 4.8 Billion Listening Hours in 2007

According to AccuStream Research: online music radio (live streaming channels and streamed individual track plays) generated 4.85 billion total listening hours in 2007:
Total listening hours averaged 404.2 million hours per month (excluding downloaded music), compared to a 320.5 million hour average in 2006, including leading music subscription services such as Napster, Yahoo Music and Rhapsody.

In 2007, SomaFM averaged about 5 million listener hours a month. (We've been averaging 6.4 million per month since December 2007.) If those numbers are right, then 1.23% of all net radio listening is to SomaFM!

They go on to say:

The two leading subscription services combined captured approximately 4% of listening hour share in 2007.

The two leading subscription services is apparently includes Napster, Yahoo Music and Rhapsody.

Now I think these numbers are for US only listeners. If that's the case, our US numbers are only about 40% of our total listeners. Still that gives us about half a percent of all US radio listeners, and one can extrapolate that we have about 1/4th the audience that Napster, Yahoo Music and Rhapsody each have.

Frankly, I find that a bit hard to believe, unless you factor in that most people listen to us for much longer times than they listen to the subscription services, or else the subscription services don't have that many customers.

Regardless, it's very exciting to see that we've been able to make such a dent in net radio listening. I hope we can keep playing the music our listeners love, and hope we continue to find new listeners and grow.

via Yahoo Biz

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Monday, February 18, 2008

SXSW Panel: The Trials and Tribulations of Using Music Online

Be sure to come by the panel I'm on at SXSW: The Trials and Tribulations of Using Music Online.
This panel will discuss the usage of music for various online formats, including (but not limited to) podcasting, blog MP3 postings, internet radio, and vlogs (or other video). This session will address the different copyrights, licensing, and royalties associated with different types of use. Learn how and why you need to get copyright and/or licensing clearance for the music you use, and which clearances you need for which uses in order to operate legally. We will also discuss copyright royalties, royalty payments, and royalty collectors, including SoundExchange, ASCAP, BMI, and SESAC.
Should be fun. If you've never met Richard Bengloff (who heads up A2IM and is on the SoundExchange board and will be on this panel), he's a great guy who is amazingly knowledgeable about the music business, and genuinely cares about artists and content creators. Rich and I don't always agree, but I learn something every time I talk to him.

I can't wait. The other folks on the panel are all great as well (Brian Zisk and Chris MacDonald) as well as our moderator Elise Nordling (who besides programming and hosting Indie Pop Rocks works for IODA, an online music licensing company).

Room 10
Tuesday, March 11th
3:30 pm - 4:30 pm
South by Southwest, Austin, TX

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Tuesday, December 4, 2007

CRB sets satellite radio royalty rates.

and guess what? They're lower than internet radio!

AP is reporting:

``Satellite Radio will pay a performance license rate of 6 percent of certain revenue this year for sound recordings played over its network, according to Copyright Royalty Board decision`` and ``also will pay a performance license rate of 6 percent of gross revenue subject to the fees for 2008, which will then increase by 0.5 percent annually before reaching 8 percent in 2012.``

Just to put that into context, Net Radio up until 2006 paid 10-12% of their revenue. And of course, unless we get a deal from SoundExchange that's codified by Congress, most net stations are going to pay what amounts to 300-600% of their revenues. That's right: 3-6 TIMES their revenues.

Perhaps it is time to start turning up the heat on Congress again to do something?

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Friday, November 16, 2007

No one is listening to over the air radio anymore.

Over the air radio continues to bleed listeners. Is is the technology? Is it the programming? Of course, I think it's the latter. Regardless, it's losing audience share. Why? More choices. And as soon as we have internet in cars, AM/FM listening will plummet even more.

Inside Radio 14-Nov-07 reports:

SafariScreenSnapz002.jpg Summer book Persons Using Radio (PUR) numbers declined to their lowest level since Arbitron began keeping statistics in Fall 1998. Radio usage dropped in every cell except 50-54s. Steepest declines continue to be among teenagers and young adults, as their attention is increasingly diverted to other media. That’s especially true among males, with Men 18-24 and 18-34 cells posting the biggest year-over-year declines. But the crowded media world is also taking a toll on the 25-54 money demo, which fell 15.1-14.9. There’s also a disturbing trend among female demos. In the Summer book not a single female cell saw an increase in listening. All but two (50-54 and 65+) declined. Compare that to male demos. While older women mirror the trend of listening less, the Summer book shows Men 45-64 were listening to the radio more.
via Hear 2.0

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Thursday, November 15, 2007

USA Today: Internet radio providers "close to settlement"

While I won't publicly comment on any negotiations that may be going on between SomaFM, SoundExchange and the RIAA, I'm happy to say that this article in USA Today sums it up well:
Net radio's future, which looked dismal earlier in the year after new copyright royalties were instituted, is apparently back on track. The proposed fees were so high many stations said they would be forced to go out of business. But Hansen says stations and record labels have been negotiating a settlement and are close to coming to terms.

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Tuesday, November 6, 2007

SaveNetRadio Press Release on SoundExchange's proposed rates for Cable radio services

WASHINGTON, Nov. 5 /PRNewswire-USNewswire/ -- The SaveNetRadio Campaign today expressed surprise and hope upon learning that SoundExchange has formally proposed that cable radio services pay royalties between 7.25% and 7.5% of their revenue to sound recording copyright owners and recording artists. This proposed rate, effective from 2008 to 2012, is virtually identical to rates endorsed by more than 140 cosponsors of the Internet Radio Equality Act, but rejected by SoundExchange and the Recording Industry Association of America. 54B44B3C-57B9-4DFD-B9F6-EC955947A077.jpg

"Perhaps this agreement means that SoundExchange agrees that 7.5% of revenue is a fair rate; they just prefer that the rate not be legislated," Jake Ward, a spokesperson for the SaveNetRadio campaign said. "The Internet radio industry has never asked for more than royalty parity and an opportunity to grow their businesses to the benefit of artists, consumers, and even record labels. Perhaps SoundExchange's agreement that cable radio should pay 7.5% of revenue is a precursor to an equivalent offer for Internet radio services. It is hard to imagine that recording industry interests would continue to reject Congressional legislation and webcasters' efforts to set fair royalty rates while simultaneously agreeing to the same standard for cable radio services."

The Internet Radio Equality Act -- H.R. 2060 and S. 1353 -- would vacate the March 2nd Copyright Royalty Board's decision and set a 2006-2010 royalty rate at a competitive level with royalties paid by cable and satellite radio services (7.5% of revenue.) The bill would also change the royalty rate-setting standard used in royalty arbitrations, so that the standard applied to webcasters would align with that applied to cable and satellite radio.

For more information on the SaveNetRadio coalition visit http://www.savenetradio.org/

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Wednesday, October 24, 2007

Washington Post: Web Radio Seeks Resolution

Good article in Washington Post:
SoundExchange has already proposed a fee schedule that is lower than the Copyright Royalty Board's rates for commercial webcasters whose annual revenue is less than $1.25 million, and Ades said about 30 companies have accepted it. SoundExchange and the Digital Media Association also agreed in August to cap the total amount of per-channel fees that a Web service would have to pay, an issue that was of particular concern for webcasters such as Pandora that have millions of channels set up by individual users.

Still, webcasters say that even if there are favorable results to the negotiations, they are hoping for long-term legislation that will force all radio platforms -- including traditional AM/FM radio, which does not currently pay any royalties to SoundExchange -- to pay the same rates.

Read entire article

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Thursday, October 18, 2007

Radio Royalty Update

Official Internet Radio Royalty Update: both sides still "in discussions". Nothing has changed there. The Internet Radio Equality Act is feeling doomed as congress is more interested in a long term copyright change.

I think what Congress is hoping is that everyone can keep "negotiating" long enough for them to pass the next set of laws. That forces net radio into an uncomfortable position- we're potentially assuming some huge royalty obligations.

I think we still need to put pressure on congress. But I think we've lost their ear.

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Thursday, October 11, 2007

Rusty on CNET TV live today

Rusty will be on CNET LIVE today at 1pm Pacific.

Update

I'll update the link when the archive is up. It was great to talk to CNET's Brian Cooley. Brian and I both worked at KPIX (CBS) in San Francisco and were responsible for getting them on the 'net back in 1995.

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Senator Clinton "backs webcaster compromise"

Wired is reporting that Sen. Clinton Backs SoundExchange/Webcaster Compromise, although the letter they print from her to her NY constituents isn't that much different from the letters coming from all other senators: namely, "we don't want to legislate, but back a compromise between webcasters and SoundExchange".

Alas the big problem is that if there is no change in legislation, only SoundExchange member artists and labels will be affected; stations will still have to pay the highest CRB rates for non-SX material.

And that's a serious problem because of how few of the artists played by independent webcasters are SX members.

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Wednesday, October 3, 2007

Can Internet Radio survive under current legislation?

No, it can't legally in the US.

We still have a long way to go to get legislation passed. Congress seems to have lost interest in us, and is satisfied now that a few very small webcasters have taken the so-called "offer" from SoundExchange (that only covers big label and SX-member artists, not useful for independent broadcasters!)

Meanwhile, attention has turned to the new bill which will put a royalty on over-the-air broadcasters as well. Alas, that royalty will be "penies on the dollar", well below the 10-12% paid in the past by webcasters, and way below the rates set by the CRB last March.

Paul Gathard at Daily Tech says it well:

Becoming a pirate internet radio station is no way to run a business or to live in peace and harmony with the law. The risk is far too great for rewards that are elusive at best for even well funded statutorily licensed internet radio stations.

If you have a passion for the medium and the music, the answer is new legislation. If you have an overwhelming desire to build an internet radio empire, the answer is new legislation. If you simply want to listen to your favorite internet radio station any time you want, the answer is new legislation. There will be few options or choices for any internet radio ambitions unless the current CRB ruling is overturned and a new law crafted.
Read the whole article...

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Wednesday, September 26, 2007

CNN: SoundExchange spent $50,000 lobbying

CNN:
SoundExchange spent $50,000 in the first half of 2007 to lobby against Senate and House bills that would nullify the new payment system set by a three-judge copyright panel in March, according to a disclosure form posted online Sept. 7 by the Senate's public records office.
Frankly, I'm surprised that they only spent $50k. And doesn't this money belong to the artists?

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Wednesday, September 19, 2007

Press Release: Webcasters Stand Firm

(Released in conjunction with SaveNetRadio and the stations listed below)

FOR IMMEDIATE RELEASE:

Webcasters Stand Firm

Deal With Us In Good Faith or No Deal!

Wednesday, September 19, 2007 SAN FRANCISCO, CA. – Thousands of webcasters stand firm by rejecting the most recent Copyright Royalty Rate proposal made by SoundExchange. The latest take it or leave it “offer” made by SoundExchange on behalf of the recording industry has done nothing to further negotiations with webcasters, and a mere 24 small webcasters have felt they had no choice but to give in to the record labels demands.

“The latest proposal made by SoundExchange is extremely disappointing, at a time where we need real progress, not hollow tricks.” SaveNetRadio spokesperson Jake Ward said. “While the clock continues to tick for webcasters, SoundExchange continues to play games with their good faith The resounding rejection of this offer should serve as a reminder to SoundExchange, and to Congress, that the webcasting community is intent on a lasting and fair resolution to this issue, and willing to fight for it”

We, the undersigned have made it very clear to the Sound Exchange exactly why this latest offer is unrealistic and unacceptable. Its terms are not viable for webcasters seeking to run profitable businesses. One such term is the newly added ATH (Aggregate Tuning Hour) cap which immediately makes many mid-level webcasters ineligible for the recently presented agreement. For stations with revenues far below the $1.25 million cap, but with healthy listener bases, this ATH cap forces payments at the CRB rates.

This deal is not feasible for anyone who wants to grow their business. It contains the aforementioned $1.25 million revenue cap, which limits growth and puts in place a dangerously low hard ceiling for revenue generation. The Small Business Administration revenue cap for over-the-air broadcasters to be considered a small business is $6.5 million – this would seem a fair cap, with precedent.

Also, the offer only covers copyright holders that are SoundExchange members, of which there are approximately 20,000. Between us, the undersigned webcasters played far more artists than that in the last year. Under the SoundExchange offer for artists not on that limited roster, webcasters would have to pay at the bankruptcy-level rates, which were set in the fatally flawed Copyright Royalty Board (CRB) ruling in March. Those CRB rates were condemned by webcasters, the press, and members of Congress and deemed as wildly out of line and detrimental to all parties concerned – including the RIAA.

We have asked for a reasonable, long term solution, not one that is subject to increase at the whim of the record industry every five years. 2010 is little more than 2 years away, and it would be difficult for any business owner to accurately forecast profits and build a successful business model with a huge expense variable looming in the future.

Although several of the webcasters listed below are currently involved in direct negotiations with Sound Exchange, the process remains exceedingly slow and increasingly unpromising. In the continuing absence of a genuine offer that would allow internet radio to continue to be the vital medium for new music discovery we implore our listeners and fans of internet radio to continue to urge your legislative representatives to pass the Internet Radio Equality Act (HR2060, S.1353).

For information on how you can contact your representative, please visit http://www.savenetradio.org.

Signed:

Jeff Bachmeier, .977
Val Starr, GotRadio.com, 100hitz.com
Rusty Hodge, SomaFM.com
Rick White, BigR Radio. 1faith.fm
Donnie Mowbray, 181.fm
Kurt Hanson, AccuRadio
Dave Landis, Ultimate 80’s
Bill Goldsmith, Radio Paradise
Ted Leibowitz, BagelRadio
Sal Amato, Dot1media
Brandon Casci, Loud City
Jim & Wanda Atkinson, 3WK
Ari Shopat, Digitally Imported
Mike Roe, Radio IO

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Tuesday, September 18, 2007

Thursday, September 13, 2007

No deal on the horizon

Some places are reporting that a deal is just about finalized with SoundExchange, but this is not correct. I think they're referring to the NPR/SoundExchange deal, which I hear is getting close to being finalized. But that doesn't do any good for all the other webcasters out there!

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Wednesday, August 8, 2007

Ray of Light For Internet Radio?

Jason Thomas at Crawdaddy Magazine has a great article on the state of net radio, here's a snippet:

The original laws were crafted in a time when technology was seen as having a limitless possibility to change everything about our lives, and much of the very things that the DMCA creates rules for were in states of infancy. Given the way the saga has unfolded over the last 12 years, the only way that harmony is going to be reached is either tossing out or amending the DMCA and, in doing so, re-evaluate exactly how the changes in technology have played out in the forms of digital media. There is little chance of fixing the tangle of existing legislation and Copy Right Board rulings, especially given the fact that webcasters have evolved into quite divergent forms with distinct business models, organizations and revenue/profit streams. Treating them the same would make little sense, and would open the door to fighting amongst themselves over a single rule that applies to them all as they have different interests. That is exactly what SoundExchange is hoping for.

I encourage you to ">read the whole article.

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Friday, August 3, 2007

Small Webcaster Revenue Limits

The RIAA defines small commercial webcasters as entities with less than $1.25 million in annual revenues. Exceeding this amount in a calendar year would disquality a webcaster for paying based on a percentage of revenues, and force them to pay on a per song, per listener basis which would be multiple times their annual revenue. This cap needs to be raised if the webcasting industry is to be allowed to grow. Revenue caps this low will force small webcasters to constrain their growth or else face debilitating royalty liabilities. We think this cap should be raised to at least $5 million. The US Small Business Administration "Table of Small Business Size Standards" defines a small traditional radio broadcasting network as a company with less than $6.5 million in annual revenue (and no limit to the number of employees). An internet broadcasting service is considered a small business if they have less than 500 employees and no revenue limits.

Why is it that SoundExchange insists on setting the revenue limits so low?

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Tuesday, July 24, 2007

IREA Update

Here's links to the updated co-sponsor list: S.1353 in the Senateand HR.2060 in the House. We currently stand at 5 Senate co-sponsors and 139 house co-sponsors. We need 51 and 218 co-sponsors respectively.

Thanks to Sally for reporting in on her calls to the Judiciary Committee this morning:

Durbin (no position) Feinstein (no position)
Biden (no position prior to vote)
Kennedy (staff still discussing this)
Feinfold (no position)
Leahy (no position)
Brownback (co-sponsor, they said he had just had a briefing on this)

You should continue to call your representatives! If they are already sponsoring the IREA, thank them for it and ask them to do what they can do to get the bill out of committee and ready for a vote. If they're not supporting it, reiterate your desire to have them support it.

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Sunday, July 22, 2007

How the RIAA wants your internet radio experience to work.

The RIAA is proposing mandatory DRM requirements for digital radio. The system they point out to for example is developed by Media Rights Technologies and you can see an example of it on their demo radio site.

To listen to radio protected with this DRM system (the one the RIAA is proposing), you must install the "SeCure X1 Recording Coltron" software.

To make a long store short here's the hoops you have to go through to listen:
  1. You must be running Windows. No MacOS, No Linux.
  2. You have to download their player which entails restarting your computer which installs special software to interact with your sound card. This may involve "root kit" technology.
  3. You can't use a stand-alone hardware player like the Roku or the Squeezebox.
  4. Use of the software is not allowed in certain countries due to US Export laws, including Iraq and Cuba. So US Forces cannot listen to internet radio in many overseas locations that they are deployed to.
  5. You can't use iTunes or Winamp to listen to streams.
  6. The software can't be installed on a "virtual operating system", so Mac/Linux users can't even use it under a virtual machine.
  7. The software doesn't work with external (USB) sound devices

I tried to check out their player and report back to see what it does, but my PC is a Mac running Parallels and it won't install. If you are adventurous, and have a PC, try installing their software and see what happens. My understanding on how it works is that it utilizes all the available DSP power of the WIndows sound manager, which keeps you from being able to record the audio with a loop-thru analog trick.

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Friday, July 13, 2007

Are the CRB rates going to be enforced on July 15th?

John Simson on (APM's) Marketplace just now said that he expects webcasters to be in compliance with the rates that take effect on Monday. This seems counter to what has been reported by others.

It's available as a podcast at Marketplace.org, it's about 10 minutes (or 1/3 of the way) into the July 13th episode.

The critical piece:

Tim Westergren at Pandora asks John Simson, "Are these rates going to be enforced on Sunday?"

To which Mr. Simspon replies, "There is a ongoing business discussion going on between us and the representatives of these companies, but while that discussion going on, we expect them to comply with the law as it is on July 15th and July 16th."

Eliot Van Buskirk at Wired has this to say in his latest post:

Here's the deal, according to SoundExchange. Payments under the new rates are legally due on Monday, but no lawsuits are going to be meted out on that day for webcasters who do not pay, as negotiations continue. Fees that are not negotiated away will still be due retroactively -- plus interest.
We have a truce right now with the RIAA and SoundExchange, but the "Peace Accord" is still to be worked out. We still might get a bomb dropped on us.

Please keep calling your reps. And if you haven't supported SomaFM lately, we could user your financial support right now.

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Thursday, July 12, 2007

U.S. Court of Appeals denies webcasters' "Motion to Stay"

RAIN is reporting the U.S. Court of Appeals for the D.C. Circuit has denied webcasters' "Motion to Stay" the new webcast royalty rates. This means that the new rates go into effect on July 15th, 2007 (which is a Sunday, so it will actually be that following Monday).

Our only hope now is that we can get a vote on HR.2060 before Friday. That basically means today, Thursday, July 12th, 2007.

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Wednesday, July 11, 2007

Representative Jay Inslee addresses Congress

Congressman Jay Inslee (WA-01), original cosponsor of the Internet Radio Equality Act, spoke on the floor of the U.S. House of Representatives in support of his bill. The following is the complete text of Congressman Inslee’s statement:

Mr. Speaker, I come to the floor of the House this evening to discuss the potential loss of Internet radio by Americans, a tremendous service that, because of Internet software and musical geniuses, 70 million Americans now enjoy the ability to listen to music by Web broadcasters over the Internet.

It is a tremendous service. It is as ingrained in a lot of Americans' daily lives as a cup of coffee and the morning newspaper.

Unfortunately, I have to inform the House that that service may be gone in a matter of a few weeks if we don't reach a resolution of a, frankly, wrong decision decided by the Copyright Royalty Board. What I am disturbed to report to my colleagues is that some time ago, March 2, 2007, we had a decision by a Federal agency, the ramifications of which would be to shut down the ability of Americans, on a realistic basis, to continue to enjoy Internet-based radio.

The reason this happened is that this board was given the authority to set the royalty that should be paid by Webcasters who stream out this great music, by the way, tremendously diverse music. One of the great things Americans love about Internet radio is you have such eclectic, different types of music, not just top 40. You know, I haven't progressed past the Beach Boys in the 1960s, but there are a lot of kinds of other music. Internet radio has been tremendous by allowing people to enjoy thousands of different genres and types of music.

But now this Copyright Royalty Board has issued a decision which will explode the royalty that these Webcasters are forced to pay to those who generated the music, to the extent that it will make it totally economically impossible for these businesses and these Webcasters to continue to stream music to the 70 million Americans who now enjoy it.

We need to fix this problem. We need to fix it urgently, because the decision will, this guillotine will come down on July 15 if either Congress doesn't act or an agreement is not reached between the parties to adjust this copyright fee that will have to be paid by the Webcasters.

So we need to fix this problem, and, in doing so, we need to do it in a way that is fair to the musicians and artists who create the music that 70 million Americans enjoy over the Internet. These artists work hard in producing this music. They share their genius. It's an artistic gift they have, and they share it with Americans. They need to be compensated fairly to allow them to maintain their business model as well.

Unfortunately, this was a wildly disproportionate decision by this board that is grossly unfair to the distributors of music and simply will allow them not to continue in business. And to give folks a feeling of how distorted this decision will be, I would like to refer to this graph which shows Internet radio per-song royalty rates under preexisting law starting in 2005, that started at $.00008 dollars in 2005, and by 2010, we will have foisted on us 149 percent increase in these royalty rates.

I am not sure any business model can tolerate a three-fold increase just in the per-song royalty rates that these folks are having to undergo. Unfortunately, this royalty rate means about a 300 percent increase for big Webcasters. But because of the particular rules here, it's a 1,200 percent increase for small Webcasters, so the small Webcasters, which are the vast majority of Webcasters will be hit potentially by 1,200 percent increases.

Now, this board, this Copyright Royalty Board has refused to reconsider their decision. What it means in the real world is the Internet going silent. Many of the stations a few days ago went silent to demonstrate and to protest its decision. I know Americans are disturbed by this, and they are now talking to my colleagues. I know thousands of them have communicated with my colleagues as a result of this, so we need to fix this problem.

I know in my district, I am from an area just north of Seattle, First District in the State of Washington, we have a Webcaster called Big R Radio. They stream to over 15,000 listeners who enjoy their product. But because of this decision, their rates are going to go up to a level, and you have got to understand how bad this is, the rates they would have to pay just for their royalties, not for their overhead, their rent, their salaries, the royalties they would have to pay for this exceed by 150 percent the revenues that this business is getting in.

Well, obviously, that's untenable, and this company will have to either go offshore or simply shut down if some change is not made. That is bad for Big R Radio, the company, and it's bad for the 15,000 people that enjoy their music right now. We need to fix this problem.

So the first damage that was done is this per-song radio royalty, but there was another, perhaps even more odious thing that this board did, the preexisting rule required a $500 charge, or, excuse me, a per-station minimum fee. This new ruling required a $500 charge for each streaming station that they offered. Webcasters, of course, stream under certain channels. But under this decision, there was no limit on the amount total in this per streaming channel that would be placed. Many, if not most Webcasters, have multiple channels.

So, if you look at what it will cost, just three of these Webcasters, Pandora, RealNetworks and Yahoo, because they are getting socked with this $500 per channel, and they broadcast literally thousands of channels with no limit, just those three Webcasters would have to pay $1.15 billion, with a B. These rates will dwarf the radio- related revenues by substantially more than $1 billion.

In other words, it will charge these businesses more than $1 billion more than the revenues they generate from this business. That's absurd. It's ridiculous. It has no relationship to economic reality, and it is a government glitch, a foul-up of the highest order that needs to get repaired.

This would result in 64 times more the total royalties collected by the group called SoundExchange that collects these royalties in 2006, an increase of more than, this is a pretty amazing number to me, 10 million percent over the minimum fee of $2,500 per licensee. Clearly, this is beyond the realm of economic reality.

Finally, this royalty board, the third thing that they did, they eliminated the percentage of revenue fees that many small Webcasters use to determine their performance royalty, which would be severely damaging to small Webcasters. So, to put this in perspective, in a global sense, I want to refer to what this will mean in total royalties.

If you look at this chart, you show total royalties in 2004 of $10 million. The estimated fee under the old royalty rule in 2006 would be $18 million. But under this decision, this flawed decision, it will actually be $1.150 million. So if you want to see the difference graphically of what the old royalty would be in 2006, this bubble would go to this supernova, I would call it, in 2006. This is untenable. It needs to be fixed.

Now, in order to fix this, Representative Manzullo and myself have introduced the Internet Radio Equality Act, it's H.R. 2060, and this bill would fix this problem by doing something that appears eminently fair to me, which would simply have the same rate to be paid by Internet-based Webcasters as broadcasters now pay over satellite radio, over cable radio and over juke boxes.

What we are simply saying is that we ought to have equality, fairness, that is why we named it the Radio Equality Act, by having parity, the same level, which is 7.5 percent of revenue, a transition rate, in 2010. This is something that is fair, equal, and economically realistic to allow 70 million Americans to continue to enjoy their radio over the Internet. And now, 128 Members of the U.S. House of Representatives have cosponsored this bill just in a matter of a month or two; and the reason they have done so is I think they have heard from their constituents who want to keep their service going and realize how ridiculously out of whack this particular decision was.

Now, I know it may surprise some Americans to know that government agencies can make mistakes, but certainly one was made here and we need to fix it, and we need to fix it quickly. On July 15, this decision will go into effect. I encourage my colleagues to look at this bill, H.R. 2060, the Internet Radio Internet Equality Act, and cosponsor it to add their voices to the choir to demand action by the legislature to fix this bureaucratic foul- up.

Obviously, this is supported by a large number of people, not just broadcasters. National Public Radio certainly has an interest in this. I know that many of my constituents enjoy it, and it is in great jeopardy tonight if we don't act. I know one station has already gone off the air because of this bureaucratic snafu. The NPR affiliate Rock Island Illinois- based WVIK served hundreds of thousands of citizens. They have switched off their Web stream because this is an economically untenable situation for them if it is not fixed. So what their constituents and their customers are now hearing over the Internet is silence. Silence may be better than some of the music my kids have listened to over the years, but it is not better than the thousands of stations and access that people have over the Internet. We want to keep that available for Americans.

I also want to say that why I think this is so important is diversity. One of the best things about the Internet is it gives you what you want, not what the broadcaster wants you to listen to. And, frankly, because of the consolidation of the industry and the radio over- the-air industry, we are hearing a lot more of the same thing over and over and over again. And some of it is great music. We are still stuck in the 1960s, many of us, and we enjoy it, but diversity and having access to Appalachian bluegrass or music from the subcontinent of India; I heard of a genre, it was basically heavy metal, hip-hop, country at the same time, and that is quite a genre. But this provides diversity for people, and they ought to have their multiple tastes enjoyed and that is really in jeopardy tonight.

Now, the other thing I want to say is that this decision will go into effect July 15, and these stations will be in great economic jeopardy beginning just in a week or so; and, unfortunately, some of them as of July 15 might shut off their streaming. Others are going to start to consider what to do. Some may consider going offshore, which is not a healthy situation for us for a variety of reasons.

But I want to assure the parties who might be involved in discussions in this that after July 15 it will not be the end of this discussion. If Congress is unable to act before July 15 and if the parties don't reach some resolution of this, July 15 will not be the end of this effort. It will not be the beginning of the end of this effort; it might be the end of the beginning of this effort, because as these stations start to shut down, Congress will be deluged more than they have already been deluged with voices of protestation exercising their right to petition their government for redress of grievances, and one of the biggest grievances people are going to have is they can't hear their radios over the Internet anymore. The 128 cosponsors we have today even before the sword of Damocles has fallen on the music is going to grow, and we are going to be back here to continue to grow this until we get relief.

So I am hopeful that the parties are talking to one another to try to reach an economically viable and fair resolution of this so that artists, performers, songwriters can continue to have a meaningful economic model, so they can continue to do their work and they will be compensated for it; that Web casters can have an economic model to allow them to stream it over the Web, and 70 million Americans can continue to enjoy the pursuit of happiness over the Internet listening to this great music. If that does not happen by July 15, we are going to be back here until it gets resolved and this chorus, this drumbeat will continue. We do not intend to let, in the words of Don McLean's song, not allow the music to die. It is, too, a part of the American culture, and I will encourage my colleagues to help out by cosponsoring this bill.

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RIAA Myths and Lies about Internet Radio

Kurt Hanson has published a table of Myths and Lies about Internet Radio, which counters the arguments put forward by the RIAA for drastically increasing net radio royalties. Next time you read a RIAA or SoundExchange press release, check it out for accuracy here.

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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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Tuesday, June 26, 2007

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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