Internet Radio about to Take A Massive Hit...
It was announced late Friday that the music industry powers that be have
come up with legislation that will increase..by amost doubling..the amount of royalty
fees that webcasters must pay for music licensing.
There is a minimum increase of $500 per channel per year, retroactive to 2006. Plus,
there is a pay-per-performance rate in addition, that increases every year through 2010.A small webcaster that pays $300 to $400 through Live365 will be looking at an additional $50 or so each month. Just add $500 to whatever you're paying now, for STARTERS.
On MySpace, I've encouraged artists and listeners to visit SAVE NET RADIO to read more about this impending legislation and what you can do to help. Internet radio as you know it is in serious jeopardy. If someone doesn't step up to the plate - then SoundExchange 9or is that SoundExtortion?) and the RIAA could very well silence about 98% of the streaming stations you enjoy today. If the RIAA had existed in 1934, there probably would be no AM and FM radio businesses, as they would have been strangled to death before they got off the ground.
For those who know what payola is, and has been in radio's past - this doesn't seem much different. Except now the DJ's have to PAY to PLAY. It's payola in reverse - so I've named the whole thing "aloyap."
I just learned about all of this yesterday - on Saturday, March 3. On March 1 I had made a post
here about starting a possible new PRO internet station. I've removed that post for a reason - the costs of that second station jumped from about $1990 to around $3000. It would, under the new rates, require at least $316 per month to break even - with no listeners. As the Total Listening Hours (TLH) increase, so do the rates.
I've been a webcaster for almost six years. We have taken hit after hit from these folks. Every time, I've followed the rules..and gotten sideswiped time and time again. WJJD does not
sell airtime or advertising.
In February, just for WJJD, there were already some bumps:
1.) The need to buy a domain name and rebuild the entire website, which is still not quite completed;
2.) No revenue from our "expage" sponsor links;
3.) No donations from listeners came in.
On the books, February has a net loss of just over $110. WJJD can't sell advertising to try to make this up..we just have to absorb it. But I can't absorb much more.
Upon hearing of the new rates, I've decided NOT to pursue the new format PRO station. I WILL move forward to take WJJD to the Pro level. But I'm sticking to one stream.
I just hope we don't have to sell overnight infomercials in order to pay the webcast fees!
posted by Alan @ 11:04 AM
3 comments
3 Comments:
Inhibiting the growth of webcasting was the goal from the outset, with passage of the anti-webcasting provisions of the DMCA. The impossibly burdensome music use reporting requirements and now these grossly unreasonable compulsory license fees are part and parcel of the over all effort to put an end to webcasting.
The problems lies with the music industry's addiction to its traditional sales-based revenue model and the negative policy implications that has for consumers, technology firms, consumer electronics makers, and digital audio service providers of all types (not just webcasters). There can be no doubt but that public policy should support the opportunity of music industry rights holders to derive substantial revenue from their contributions to culture and to commerce. By the same token, however, the industry has no right to demand that public policy support its desire to do business in a particular way.
What's really needed is an alternative to the music industry's sales based revenue model.
I recently published a White Paper (available at bennettlincoff.com/fixing_what_is_badly_broken.pdf) in which I propose such an alternative. Mine is a comprehensive approach to rights licensing and rights management that does not depend on the efficacy of digital rights management (DRM) technology for its success. Specifically, I suggest that the rights of songwriters, music publishers, recording artists and record labels in their respective musical works and sound recordings should be aggregated so as to create a single right for digital transmissions of recorded music. The digital transmission right would be a new right, not an additional right. It would replace the parties’ existing reproduction, public performance and distribution rights (and, in those territories where it applies, the communication right).
Ownership of the digital transmission right in individual recordings would be held jointly by the songwriters, music publishers, recording artists and record labels who contribute to the recording. Each rights holder would have authority to grant non-exclusive licenses for digital transmissions of those recordings on any terms they and their licensees find to be mutually acceptable. The only limitation on this authority would be the obligation to account to co-owners pursuant to whatever arrangements they make among themselves for the division of royalties earned from this newly-established right.
The digital transmission right would be enforceable only against those directly involved in providing digital transmissions of recorded music. Accordingly, consumers would not incur any liability merely for surfing the web, accessing streaming media, or downloading music files. Neither would copying for personal use require authorization. Similarly, software developers, technology firms, consumer electronics makers, and telecommunications and Internet access providers, as such, would have no liability under the digital transmission right. On the other hand, service providers would need licenses if they operate web sites, social networking services, P2P file-sharing networks or the like that provide digital transmissions of recorded music.
Consumers would only need licenses if they act as service providers in their own right; that is, whenever they are responsible for the digital transmissions at issue. By way of example, consumers would need authorization if they operate music-enabled personal or hobby web sites; or if they upload music files to a web site or service that does not have its own license under the digital transmission right authorizing this activity by users of its service (known as a “through-to-the-user license”); or, if they offer recordings to others through participation in a P2P file-sharing network, or similar service, that does not have such a through-to-the-user license.
The right would be implemented through a combination of free market transactions between individual right holders and service providers and voluntary collective rights administration. The best results for all would flow from a marketplace in which collective licensing is the norm and direct licensing the exception. The division of ownership of rights that I suggest will tend to encourage rights owners to work together through collective licensing organizations. I also suggest solutions to the complementary issues of how to license transborder transmissions and on what basis to distribute royalties each from those transmissions. In my view, overall success for the music industry will depend on the presence in each territory of at least one collective organization whose catalogue encompasses all or nearly all recordings and which is authorized to grant worldwide rights at its local rates for all digital transmissions of recorded music that originate from its territory.
Through the digital transmission right implemented as I suggest in the White Paper, digital transmissions of recorded music could be made available from the largest number and widest array of licensed sources, anytime, anywhere, to anyone with network access. Consumers would be free to enjoy music when, where and how they themselves decide. Technology firms and consumer electronics makers would be free to offer greater interoperability between the many recording, playback and communications devices that are available, and to meet consumer demand for new products with next generation capabilities. And, in the aggregate, music industry rights holders would do at least as well financially under my proposal as they do now under the system that my proposal would replace.
Bennett,
Thanks for sharing. Excellent post, and you make a lot of good points.
I agree, the current music industry's business model needs an overhaul. It's
just a shame that they feel it necessary to take everyone else down with them.
It seems like most conventional media companies and organizations, including the RIAA, are so fixated on trying control who gains access to their product by whatever means necessary, that they're forgetting the real needs for consumers. Once again, it seems like the CRB and the RIAA are trying to save their struggling industry by charging fees to webcasters that most people can't afford. In the end, these rates as proposed now could end up doing everybody more harm than good. It's time to open up the marketplace to everybody. Yes, that includes the internet.
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