Wednesday, March 3, 2010

Another study shows that listening to free internet radio leads to music sales

ArsTechnica, quoting NPD analyst Russ Crupnick speaking at the Digital Music Forum East conference in New York this week:

"NPD noted that free Internet radio is tied to a 41 percent increase in paid downloads too. Not only could it be sating people's interest in hearing songs before they spend money (one of the major reasons to use P2P in the first place), but it's helping users discover new music as well."

That certainly goes along with all the email and comments we receive from listeners about how SomaFM has expanded their musical horizions and led them to buy more music.

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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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Wednesday, May 13, 2009

Performance Rights Act (HR 848) Approved, on way to passing

The House Judiciary Committee approved the Performance Rights Act (HR 848) today, with 21 in favor, 9 not in favor.

It includes these rates that apply only to over the air broadcasts:

Any station that makes less than $100,000 annually will pay only $500 annually for unlimited use of music.

Any station that makes less than $500,000 but more than $100,000 annually will pay only $2500 (half of the amount in the original version of the bill) annually for unlimited use of music.

Any station that makes less than $1,250,000 but more than $500,000 annually will pay only $5000 (unchanged since the bill was introduced)) annually for unlimited use of music.

The bill also includes a statement of "Parity for all radio services" which establishes a “placeholder” standard to determine a fair rate for all radio services that will encourage negotiations between the stakeholders

As I've mentioned before compared to AM/FM broadcasters, Webcasters currently get a really bad deal: A webcaster with 1.25 million in revenue would be paying about $140,000 while an over-the-air broadcaster would only pay $5000. A webcaster with $250,000 in revenue would be paying $25,000 a year while an over-the-air station would pay 1/10th that.

SomaFM joined over 300 other broadcasters in signing a letter to Chairman Conyers and Ranking Member Smith [PDF] asking them to amend the Performance Rights Act to extend small broadcaster protections to small webcasters.

On the webcasters side, Rep. Zoe Lofgren of California spoke passionately and convincingly of this need to extend small broadcaster royalty limits to small webcasters. Unfortunately, a specific webcaster inclusion was not put in this version of the bill, so we'll need to do more lobbying of Congress to get it included in the final bill.

In related news, The Webcaster Settlement Act of 2009 was also introduced. The text is basically the same as the WSA 2008, the biggest difference being instead of a specific date for submitting deals for publication (a deadline which has already passed) the new bill gives 30 days from enactment to finalize deals.

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Tuesday, May 12, 2009

Webcasters deserve the same deal as over-the-air Broadcasters

The terrestrial broadcast performance royalty bill, officially known as "The Performance Rights Act" (H.R. 848) [alternative link], will also be considered by the House Judiciary Committee today. Unlike webcasters, the rate would be $5000 a year for stations with revenues up to 1.25 million dollars. A webcaster with 1.25 million in revenue would be paying about $140,000 a year to play the same music.

Doesn't seem fair does it?

If this indeed passes, and there is a good likelihood it will, then we need to demand that webcasters who broadcast non-interactive radio streams should also get to pay those same rates.

Here's the relevant text from the bill:

SEC. 3. SPECIAL TREATMENT FOR SMALL, NONCOMMERCIAL, EDUCATIONAL, AND RELIGIOUS STATIONS AND CERTAIN USES.

(a) Small, Noncommercial, Educational, and Religious Radio Stations-

(1) IN GENERAL- Section 114(f)(2) of title 17, United States Code, is amended by adding at the end the following:

(D) Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that has gross revenues in any calendar year of less than $1,250,000 may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $5,000 per year, in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.

(E) Notwithstanding the provisions of subparagraphs (A) through (C), each individual terrestrial broadcast station that is a public broadcasting entity as defined in section 118(f) may elect to pay for its over-the-air nonsubscription broadcast transmissions a royalty fee of $1,000 per year, in lieu of the amount such station would otherwise be required to pay under this paragraph. Such royalty fee shall not be taken into account in determining royalty rates in a proceeding under chapter 8, or in any other administrative, judicial, or other Federal Government proceeding.'.

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Wednesday, February 18, 2009

Billboard: No Deal Reached For DIMA, SoundExchange

Billboard is reporting No Deal Reached For DIMA, SoundExchange:

The fact that the two parties did not reach a settlement comes as somewhat of a surprise. In the weeks leading up to the deadline, representatives from both parties expressed confidence a deal was imminent. However that changed early in the week, prior to the deadline, when talks fell apart during a conference call with all involved, according to sources. Exactly what issue sparked the fallout is unclear.
Doesn't this always happen at the last minute with SoundExchange negotiations with the internet broadcasters, both small and large?
"Pandora has threatened to shut down completely if it was forced to pay the full royalty rates, which raised the fees due to SoundExchange and other rights holders in some cases by 300%. RealNetworks previously said it would consider severely limiting the streaming radio options currently available to subscribers."
While I still don't think Pandora will completely shut down, they'll have to drastically change their service to a paid subscription service or one with audio ads every 2-3 songs.

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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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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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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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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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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 27, 2008

House Subcommittee on Courts, the Internet and Intellectual Property passed the Performance Rights Act

The fight between the RIAA and the NAB is heating up.  The RIAA scored one when the House Subcommittee on Courts, the Internet and Intellectual Property passed the Performance Rights Act. I have mixed feelings about this.  I don't like the fact that net radio has to pay high royalties while over the air radio doesn't.  On the other hand, I don't want to see AM/FM broadcasters forced to pay the same ridiculous rates that we have to pay. 
I really think this is going to backfire on the RIAA and it's major label members.

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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

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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Monday, March 10, 2008

Remote Broadcasting Lessons Learned

I though it would be great for SomaFM to do a lot of live coverage from SXSW this year- after all, it's one of the biggest music and media festivals in the world. So I had some grand plans, many which have failed so far.

Plan number one:

Live webcams looking at the Six Street club area, as well as looking at the convention center and Brush Square Park. We have the cameras; we secured places to locate them in the Courtyard hotel next to the convention center. Alas, we didn't expect a total failure of the hotel's ethernet network system. And our backup plan didn't expect the hotel's wireless system to become overloaded and crash multiple times a day.

In fact it's a good thing that I have a Sprint EVDO card to get wide area wireless access to the internet, or I'd have no internet connectivity at all. But even Sprint's EVDO network is getting overloaded during peak hours (e.g. 10am-midnight local time). Today, it took about 30 minutes to upload 30 photos, when it should have taken 2-3 minutes. Plan number two: Live "Austin Audio" from above Sixth Street. The street sounds here in Austin have to be heard to be believed. And I though it would be really cool to do a live broadcast of the sound of Austin from the hotel a block off Sixth street. So I brought a couple of portable streaming encoders with us, and some stereo microphones to mount on the balcony outside the hotel room. Except that there were no rooms at the hotel with a balcony, and worse yet, no opening windows in the room! So scratch that plan.

Plan number three:

Quickly edit the podcasts, interviews, and band recordings each night on the laptop and upload before morning. The problem here is that we normally use ProTools for doing all our editing and audio production, but since ProTools won't work on OSX 10.5, I couldn't run it on my laptop. (SomaFM has one dedicated "audio production" machine that runs ProTools and also has the master music library on it; but this machine has to run OSX 10.4.x for ProTools.) I ended up installing a copy of Logic, but since I haven't used it much, there has been a learning curve that I hoped would have been faster. Also, some of the audio processing plugins we use with ProTools weren't licensed for use on a laptop.

Plan number four:

Broadcast the Bay Area Takeover party on Thursday live. OK, this one might still happen but given the way things are going, I'm not expecting it to work. We are still going to try. I used to scoff at the NPR guys when they'd send a crew of 5 people to SXSW to report on it. There are 3 people from SomaFM here, but two of those people (Merin and Elise) are also here on behalf of their day jobs and have to give 2/3rds of their time to that. What we needed was an audio production person to do the first passes at editing all the material we're recording. Maybe next time we'll bring an intern. :-)

In retrospect, here's what I think would have made things work a lot better:

Get a couple EVDO to WiFi+Ethernet routers, so we don't have to rely on internet from the hotels or venues at all. And bring plenty of ethernet cabling, as you may not be able to rely on the wireless networks.

Bring at least one extra laptop for processing pictures and audio.

Bring extra batteries for the digital recorders!

Arrive a couple days early to test everything... arriving 24 hours before the event starts won't give you enough time to get everything ready.

Have one person who's job it to just provide production support - and who doesn't go to the panels and conference itself - someone whose only job is to get the stuff posted and edited.

I wonder how this list will change in the next few days... we're basically winging it at this point.

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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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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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Tuesday, October 23, 2007

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

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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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Tuesday, September 18, 2007

More Bullshit from RIAA via SoundExchange

RIAA has SoundExchange issue press release to try and trick congress into thinking the royalty situation has been solved. Nice work guys.

The reason many people are signing is because they fear lawsuits from the RIAA. RIAA representatives have been calling webcasters and telling them if they didn't sign by Sep 15th, they would be operating in violation of the law. That's the only reason they signed. It's like a Sporano's episode.

The only way that webcasters can escape the high royalty rates is by signing this current agreement and only playing SX affiliated label music. This means less independent music, and more big label music. Which is exactly what the RIAA wanted.

This agreement is useless to SomaFM because it doesn't even cover half of the music we play.

Here's the release:

Small Webcasters Embrace SoundExchange Offer on Discounted Rate - September 18th, 2007

Individual Agreements Allow Small Internet Operators Subsidized Rates Through 2010

Contact Richard Ades or Gregg Perry 202.640.5894 news@soundexchange.com

WASHINGTON, D.C. - SoundExchange announced today that significant numbers of small commercial webcasters have signed agreements that allows them to continue operating through 2010 with essentially the same terms they have enjoyed under the Small Webcaster Settlement Act (SWSA). These agreements - sent in late August and signed individually with each webcaster - guarantee the same rates through 2010 that qualified small webcasters have received since 1998 for the use of sound recordings owned by SoundExchange members. The agreements are retroactive to January 1, 2006, which is the beginning of the current rate period, and continue through December 31, 2010, at which time new rates will be set either through negotiation or by the Copyright Royalty Board (CRB).

"Giving small webcasters more time to build their businesses with below-market rates is something Members of Congress wanted us to get done, and we have," said John Simson, Executive Director of SoundExchange. "We hope that these small webcasters will continue to provide innovative kinds of programming and a rich diversity of music."

Twenty-four small webcasters have already signed the agreements with others indicating they are in the process of signing. Some opted not to sign the agreements because their business models benefit more from the regular commercial rates (due to their size and the difference in minimum payments). Others did not sign because they operate via webcast aggregators who handle payments on their behalf.

Qualified small commercial webcasters who accepted the offer are now able to stream sound recordings of any and all SoundExchange members at subsidized rates. SoundExchange represents more than 28,000 recording artists and 3,500 record labels, including all the major recording companies. As part of the agreement, small webcasters (defined as those earning $1.25 million or less in total revenues) would pay royalty fees of 10 or 12 percent of revenue. The agreement also includes a usage cap to ensure that this subsidy is used only by webcasters of a certain size who are forming or strengthening their businesses.

"It's a sacrifice our members are willing to make at the request of Members of Congress and in order to give the smallest webcasters below-market rates for an additional limited time," added Simson. "This is a great deal for someone who wants to start or build a webcasting business."

# # #

Gee. 24 webcasters signed this. If you're a webcaster and signed it, I'd like to hear your reasons for signing it.

The usage cap is also a joke: if you average more than about 6900 concurrent listeners- about the audience of a single commercial station in a mid-sied market.

There are thousands of small webcasters. And only 24 have signed on? That tells you just what a huge problem this really is.

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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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Wednesday, August 1, 2007

Notes from the Platform Equality hearing

Rep. Howard Berman, Chairman of the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property, held a hearing on "Platform Equality", which would end the decades long royalty exemption for terrestrial broadcasts.

House Hearing on Ensuring Artists Fair Compensation

Howard Coble (R-NC), Steve Cohen, (D-TN), Lamar Smith (R-TX) and Darrell Issa (R-CA) were among those voicing support for the proposal to end the terrestrial broadcast sound recording performance royalty exemption.

The three main arguments for this according to Berman:

    • The exemption was never justified under copyright law
      Calbe, Satellite and Internet have to pay these royalties. There should be no discrimination based on platform.
      US us the only major country that doesn't have a sound recording performance right.
  • Terrestrial broadcasters currently only pay royalties to the composers of the music; the "musical work". They do not pay for the use of the sound recording. In 2005, broadcasters paid $450 million in muscical work performance royalties.

    Issa stated that congress is preparing to reorganize section 114 of the copyright act. (This is the sections that covers royalties for internet, satellite and cable services and provides exemptions for some other uses, such as use of music in business environments.)

    Issa spoke a lot about HD radio, and the threat it makes to sale of CDs. He is under the impression that the 64kb or lower compressed digital audio sounds as good as CD. HD does not stand for High Definition. It stands for "Hybrid Digital". Unlike HDTV, which improved the signal quality delivered to consumers, HD radio is not a marked improvement. Signal to noise ratios are improved, but there are audible compression artifacts in the audio.

    Issa also talked about a flood of HD radio recording devices that automatically split tracks coming out soon. (I think he's extremely wrong on this, there is so little uptake on HD hardware, there are only 2 or 3 HD radios on the market right now, and they're selling very poorly. I've heard a statistic several times that say an American is more likely to be run over by a bus than they are to listen to HD radio in the last year.)

    Steve Cohen, who represents Memphis, TN,

    San Jose, CA representative Zoe Lofgren was the only rep to speak out on the importance of small, independent internet (and non-internet) braodcasters. While she's not necessarily opposing the rate, she wants a rate that won't hurt small and non-commercial broadcasters.

    (more later)

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    Tuesday, July 31, 2007

    UMG Prez: Indie labels enemies aren't big labels, they're webcasters

    Larry Kenswil, President, Universal Music Group/eLabs on why indie labels are missing the future:
    Any indie (and I mean a sound recording company, not an artist who chooses to give away music to make money other ways) who thinks webcasting should be used as promotion rather than a revenue source is missing what the future is about. All music use is substitutional for other uses. Everything you do in life substitutes for doing something else. Every bit of evidence we've seen shows that new media reduces sales in old media. Obviously, sales in new media haven't made up for it. On average, heavy satellite radio users spend less money on music (other than their subscription fees) than they did prior to subscribing. Likewise with internet radio. There's just less of a need to own. Promotion is fine, but if you need to get money in from the sound recording, I'll take payment any time. Indie labels are realizing that majors aren't their enemies. Their enemies are corporations who want to make money by performing music and not pay the performers for the privilege.
    I understand the big labels' position: they've got all this legacy content they need to monetize. But most indie labels don't have a bunch of legacy content; all their content is newer and they want to get exposure for it.

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    Monday, July 30, 2007

    Performance Right and Platform Parity webcast

    Tuesday, 31-Jul-07, Elise and I will be attending the hearing of the Subcommittee on Courts, the Internet, and Intellectual Property Hearing on Ensuring Artists Fair Compensation: Updating the Performance Right and Platform Parity for the 21st Century hearings will be webcast live(RealVideo)

    I'll post an archive link as soon as I get it.

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    Tuesday, July 10, 2007

    Sales of digital tracks up 49% in first half of 2007

    According to Nielsen SoundScan, sales of digital tracks are up 49 percent for the first half of 2007 compared to the same period in 2006.

    I guess all the promotional benefit of internet radio is really paying off - people can listen to a track on SomaFM and then click to buy the track instantly online at iTunes.

    Oh, wait. The RIAA says "Internet Radio confers little promotional benefit to most performers" and that's why net radio has to pay really high royalties.

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    Monday, July 2, 2007

    San Francsico Save Net Radio benefit very successful

    There was a benefit event for SaveNetRadio tonight in San Francisco, presented by SomaFM, BAGeL Radio, Sonic Living, The Owl Magazine, Pandora, Reap and Sow and Bottom of the Hill.

    Almost 300 people showed up and we raised $2000 though donations at the door, a bake sale, chili cookoff, a silent auction and raffle.

    Special thanks to the artists who performed: Ted of The Heavenly States, Matt of The Herms, HIJK, Miyako Ueki of Peloton, and thanks to Elise Nordling for being our MC for the evening and Corey Denis for "herding cats" and making the event happen.

    Raffle prizes care of SonicLiving, Griffin Technology, Logitech/Slimdevices, Peter Ellenby (Exclusive photos/art of the Shins & Death Cab for Cutie, singed originals), Show Posters by Jason Munn, The Owl Magazine, Willotoons, IODA, SomaFM and Pandora.

    I hope I'm not forgetting anyone. I'll try to get some pictures up soon.

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    Friday, June 1, 2007

    Motion for stay pending appeal filed

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

    PDF of Filing

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    Thursday, May 31, 2007

    WSJ: Online-Radio Royalty Fight Reaches New Pitch

    ``... the Internet Radio Equality Act, would replace higher performance-royalty rates, unveiled in March, which charge Webcasters a fee per song and per listener, with a rate of about 7.5% of revenue. While that could reap the record labels less money in many cases than the per-song, per-play fee schedule that Webcasters are railing against, it would still generate more than the music companies get from other sources. Satellite radio pays about 3.5% to 4% of revenue in performance royalties. Because airplay for years was seen as promotional, regular radio doesn't pay anything, though the record labels are trying to change that.``

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    Tuesday, May 22, 2007

    SoundExchange Settlement entails further negotiations

    I asked the PR contact at SX, "Could you please provide details on the revenue cap and a usage cap and any other modifications to the SWSA extension that SoundExchange is offering?" and the response I received was:
    "They are subject to negotiations."

    That's the entire response. Now I understand these are Washington, DC Blackberry-toting PR specialists and I did get this response later in the evening DC time, and you can't type long emails on those thumb-boards, but I expected a bit more.

    So they're offering a settlement BUT it is still subject to further negotiations.

    Not exactly how I define a settlement.

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    Thursday, May 17, 2007

    Ex-SoundExchange Lawyer on why Direct Licensing won't work

    Gary R. Greenstein, former general counsel for SoundExchange, explains via the Pho list why direct licensing won't work for most net radio stations:
    The Section 114 statutory license grants licensees the right to make digital audio transmissions of any sound recording released to the public with the consent of the copyright owner. A separately negotiated agreement with SoundExchange, on the other hand, would likely only grant the licensee the right to make transmissions of the sound recordings over which SoundExchange had the authority to license. From a practical standpoint this likely means that if a webcaster enters into an agreement with SoundExchange for a rate structure that differs from that adopted by the Copyright Royalty Board, then the webcaster would be entitled to pay the privately negotiated rates for those recordings licensed under the license entered into with SoundExchange while those sound recordings not covered by the license with SoundExchange would still need to be paid for at the rate adopted by the CRB. This could also mean that webcasters streaming non-SoundExchange covered recordings might have to continue to file for the statutory license, pay the CRB-established minimum fees for the non-SoundExchange covered recordings as those minimums are currently required whether you stream one song during a year or 1 million, and comply with the final interim recordkeeping regulations for those recordings that are not covered by a direct license.

    Because SoundExchange represents the four majors and a large number of independent labels, the amount of repertoire covered by a private agreement with SoundExchange would likely be substantial but for those copyright owners who have not authorized SoundExchange to license on their behalf, they would likely have a claim to the CRB-established royalty rates for the transmission of their recordings. An open question is whether those copyright owners would look to SoundExchange to pay them the full statutory rate (thus leaving SoundExchange's own copyright owners and artists with even less money) or might seek to go after the individual webcasters for payment of the full CRB-established amount.

    Each webcaster may need to evaluate their exposure to infringement liability if they stream recordings not covered by a direct license and fail to pay royalties under the CRB rates and the likelihood that any copyright owner(s) might file suit for such non-compliance.

    This is why politicians need to understand that a legislative solution is required, and that it can't be worked out between the parties privately. Private deals will not cover everything. Private deals would force broadcasters to play music from the major and largest independent labels only and would not allow them to play tracks that weren't covered by the agreement.

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    Monday, April 23, 2007

    Senator Dianne Feinstein has the wrong numbers

    Senator Dianne Feinstein is responding to letters asking her to support legislation helping internet radio, but her response sounds like it came right out of a SoundExchange press release:
    Under the Copyright Royalty and Distribution Reform Act of 2004, Congress - at the behest of webcasters - created the Copyright Royalty Board which consists of three judges. By law, the judges are a venue of last resort and are required to periodically set rates for various statutory copyright licenses in the event that webcasters and copyright owners are unable to reach voluntary agreements. In the absence of an agreement, the judges set a rate designed to approximate the fair-market value that webcasters should pay to artists and performers for streaming their music for the years 2006-2010. The new rate that was established is less than a 5 percent increase of the rate in effect from 1998-2005.

    Wow, talk about dancing around the numbers. For large webcasters which had revenues in excess of $5 million, or otherwise chose not to work under the percentage of revenue option in the Small Webcasters Amendment, the rates per song per listener increased only 5% from 2005 to 2006. But they go up 38% from 2006 to 2007. And more each year, until finally in 2010, they will be 150% higher (or 2.5 times more) than they were in 2005.

    Year Rate Year to Year Increase Increase since 2005
    2005 0.000762
    2006 0.0008 5% 5%
    2007 0.0011 38% 44%
    2008 0.0014 27% 84%
    2009 0.0018 29% 136%
    2010 0.0019 6% 149%

    The other thing she doesn't take into consideration is that the fact that small webcasters pay royalties based on a percentage of revenue, not per song per listener, but are no longer allowed to pay based on a percentage of revenue. These small webcasters (like us) are facing royalty payments that are several times our annual gross revenues! She goes on to say:

    Although a few webcasters have recently claimed that the process was unfair, it was not arbitrary and allowed representatives from all sides to make their cases. The judges began the proceedings in 2005, and heard testimony from dozens of witnesses and conducted a comprehensive review of tens of thousands of pages of evidence submitted by all interested parties over an 18-month period.

    Unfortunately, the hearings were largely in secret, and the " tens of thousands of pages of evidence" were not released. We have been told from parties to the negotiations that many of these pages of evidence included numbers from music download services, on demand streaming services, and other non-radio music services. Since radio is completely different than these on-demand and download stores, why should those numbers be used to set the rates for webcasters?

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