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).

It's still Payola

From the Pittsburgh Post-Gazette:

In the past, the radio industry was plagued by payola scandals: Stations took money from record companies in exchange for airplay. Now, a group representing recording artists is seeking to turn the pay-for-play strategy on its head: It wants radio stations to pay artists and their record labels when the stations play their music.

What they don't mention is that record labels who want to promote artists will be able to waive these royalty fees if stations agree to feature their artists and releases. Suddenly, we have a legal form of Payola available again.

While I agree that it's only fair for broadcasters to pay reasonable royalties for the sound recording of the music they use, I don't think that exemptions should be allowed on a track by track basis.

With BMI, ASCAP and SESAC (who license the underlying composition of the song) you can't "opt out" of paying the royalty; you have to pay it no matter what. It should be the exact same way with the sound recording royalty.

Internet Radio Hearing this Wednesday: Call your Senator and ask them to attend!

Just found this out a bit late:

This Wednesday morning (tomorrow), the Senate Commerce Committee will meet to hold a hearing on the future of radio in the United States. Representatives from broadcast radio, music industry, and Internet radio will testify before the committee about the current state of the radio industry and how royalty fees and other issues, like competition and innovation, affect the future of the industry. This is an unprecedented opportunity for Internet radio to explain its value to Congress, and we need your help to make sure they are listening.

Call the Senate switchboard at (202) 224-3121 and ask to be connected to your senator's office. If you don't know your Senator's name, just tell them your state, and they'l connect you.

Or look up their direct number on the senate site.

Here's what you should say:

• I am a constituent, and an Internet radio listener calling to ask that as a member of the Senate Commerce Committee, the Senator attend Wednesday's hearing on the future of radio.
• Internet radio has been a revolutionary force in the music industry since its creation and now empowers artist, consumers, and music lovers of every kind. The Copyright Royalty Board's unprecedented and ill informed decision to increase royalty fees for Webcasters by more than 300% has threatened to bankrupt this important industry and we need the Senator's help.
• The real future of radio for music lovers, artists, and the music industry as a whole is online. To save this industry and allow it to prosper, there must be parity and equality between webcasters, satellite radio, and broadcast radio. Today Internet radio pays a recording royalty fee more than twice that of satellite radio, and terrestrial radio pays none at all. To fix this unfair and inexplicable inequality, please cosponsor the Internet Radio Equality Act, S. 1353, pending in the Senate today.

Details on the hearing:

Full Committee Hearing on the Future of Radio

Wednesday, October 24, 2007, at 10:00 a.m. in Room 253 of the Russell Senate Office Building

Witness List

Mr. Mac McCaughan, Musician and Cofounder, Merge Records
Chapel Hill, North Carolina 27514

Mr. W. Russell Withers Jr., President, Withers Broadcasting Group
Mt. Vernon, Illinois 62864

Mr. Tim Westergren, Chief Strategy Officer & Founder, Pandora
Oakland, California 94612

Mr. S. Derek Turner, Research Director, Free Press
Washington, DC 20001

Ms. Carol Pierson, President and CEO, National Federation of Community Broadcasters
Oakland, California 94612

Ms. Dana Davis Rehm, Senior Vice President for Strategy & Partnerships, National Public Radio
Washington, DC 20001

More Details

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.

SaveNetRadio.org Press Release

For Immediate Release
Contact: Jake Ward (SaveNetRadio) 202 6833156
Thursday, September 6, 2007

Webcaster Coalition Welcomes Progress and Congress Back to Town
Negotiations to Save Internet Radio from Rate Hike Moving Slowly

WASHINGTON D.C. –In a statement released as Congress returned to Washington D.C. after the August recess, SNR spokesperson Jake Ward said that while some progress was made in August it was not enough, and should not satisfy Congress. “The recent “minimum royalty” agreement between DiMA and SoundExchange was a good start, but there has been no success reported on basic royalty rates that are agreeable and sustainable for any class of webcasters – large, small, public radio, traditional broadcasters or college radio. During the August recess SoundExchange unilaterally issued revised small webcaster licenses that it characterized as helpful but were soundly rejected by many, and the Internet radio industry is still teetering on a precipice.”

In late July, amid growing public support and an increasing number of cosponsors for the Internet Radio Equality Act, Members of both the House and Senate called on SoundExchange to engage webcasters in good faith discussions during the August recess.

“Though several Members of have called for negotiated resolutions, SoundExchange seems to be playing out the clock in order to avoid Congressional action. Now that Congress has returned to Washington we hope they will hold SoundExchange to its word and the modest progress will develop into a full-scale resolution before the end of September.”

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

PBS looks into the shaky future of internet radio stations

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

Where online music discovery is heading?

Widget provider RockYou inks music promotion deals with SNOCAP, Fliptrack, Pump Audio and Nettwerk Records. Here's how it works: Labels / distributors who want to promote music let RockYou use it for free (or for substantially less than the DMCA statutory rates). The "end users" can then use free music from this pool that's being promoted by the labels. But only the music from those labels.

So much for independent radio, where the music choices are made by music directors and DJs based not on economic issues, but based on what is truly the best music available.

But this is definitely the way that people will get music for free and without commercials. Maybe radio as we know it is dead, and these new distribution methods will be the only ones viable in the future?

Jia Shen, CTO and co-founder of RockYou! says in their press release:

“Artists have realized that giving users access to tracks as background music for their sites, slideshows among other widgets, only enhances the user experience, but more importantly, truly offers them an incredible outlet to be discovered and retain new fans. RockYou! currently showcases hundreds of artists music for people to sample and insert into their widget of choice.”

Just what we used to say about radio.

Artists and labels seek royalties from AM/FM radio

First they came for the internet broadcasters. Then they came for the over the air broadcasters.

From the LA Times, Artists and labels seek royalties from [over the air] radio:

Mary Wilson, who with Diana Ross and Florence Ballard formed the original Supremes, said the exemption was unfair and forced older musicians to continue touring to pay their bills.

"After so many years of not being compensated, it would be nice now at this late date to at least start," the 63-year-old Las Vegas resident said in Milwaukee, where she was performing at the Potawatomi Bingo Casino. "They've gotten 50-some years of free play. Now maybe it's time to pay up."

So let me get this straight: Mary Wilson, one of the Supremes, feels ripped off by over-the-air radio because they have never paid royalties for the music they broadcast. Yet if over-the-air radio would have never broadcast the Supremes, Mary Wilson would have never been at all famous, and would have to be doing something far less rewarding than touring to pay her bills.

The thing that bugs me about this- Mary Wilson and others like her got paid for singing on the records they made in the past. These were either "work for hire" or contracts where the performers received a percentage of the record sales. If the record never got airplay (or as some would say, free advertising for music), then the records wouldn't have sold nearly as well.

One more thing artists like Mary Wilson should keep in mind: if the royalties are so high that broadcasters are driven to make deals directly with the labels, then the artists and backup performers won't get anything at all; the labels will get everything.

AM and FM broadcasters are already talking about only playing music that they can charge record labels to broadcast, saying these are just music commercials. Oh, wow, isn't that a novel twist on Payola?