Why Should Webcasters Pay 25% Of Revenue To Promote Musicians?

from the how-is-this-possibly-good? dept

After years of back and forth negotiating (and more than a couple public spats), it appears that SoundExchange and music webcasters like Pandora have finally worked out an agreement on webcasting rates. If you don't recall, the Copyright Royalty Board assigned absolutely ridiculous royalty rates a few years ago, which seemed to have no bearing on reality (random aside: no one has yet explained why we feel it's okay for a small group of judges to determine what is a "fair rate"). The original rates would almost certainly put most webcasting operations completely out of business. But before delivering that death sentence, SoundExchange, the RIAA-spinoff that gets to collect the money (and has a long history of hanging onto it for longer than necessary and having trouble "finding" the artists it owes money to), thankfully agreed to hold off enforcing the new rates while everyone negotiated.

Since then, there has been a wide variety of back and forth details until the official agreement was put in place today... and even though many of the news stories present this as SoundExchange somehow backing down and "Pandora" winning, the details, frankly, seem so out of touch with reality it's difficult to see how it makes any sense at all. The main issue is performance rights, which radio stations already don't have to pay because radio is helping to promote artists. The idea that webcasters/broadcasters should need to pay artists for the right to promote them to fans just seems bizarre and borderline incomprehensible in the first place.

Also worth noting is that the royalty rates that traditional broadcasters do pay (to composers/songwriters/publishers) averages out between 3 and 4% of revenue. So, if you really had to come up with a reasonable rate to pay performers as well, you might think that it would start around that same 3 or 4%. Even that would be a pure bonus for performers who are used to getting nothing as a royalty (tax) from radio. But... no. The agreement is an astounding 25% of revenue as a bare minimum, with a requirement to kick-in $25,000 just to be a webcaster at all.

Pandora claims they're happy about this because it keeps Pandora in business (and settles a big legal dispute, which hopefully allows them to go raise some money to stay in business). But it's a stunningly large percentage of revenue that will make things prohibitively expensive for most webcasters to really stay in business. You now have to have huge margins to get anywhere in a notoriously competitive business.

Who loses? Well, just about everyone outside of SoundExchange/RIAA. Already, despite being happy about this deal, Pandora has announced that it's sharply curtailing its free service, and if you listen to more than 40 hours per month, you'll need to start paying. Most webcasters now have a huge expense that will make it difficult for many of them to remain in business at all. Musicians are severely harmed as well. While a few top musicians might get a new royalty check from SoundExchange (when and if it gets around to "finding" those artists), most musicians will now get less exposure, making it that much more difficult for them to put in place the successful modern business models needed to succeed today. This basically just rewards the RIAA/SoundExchange and a few large artists who will get an extra royalty check. Everyone else is worse off.

Some might say the NAB and traditional radio stations also make out nicely, in that since these rates may harm webcasters, it takes away some competition, but even if the radio stations are happy in the short-run, it's a bad deal. These rates, certainly, will likely influence any eventual "performance right" that's added to terrestrial radio, and could significantly jack up the cost of running a regular radio station as well.

We're living in an era of amazing technological progress, where it's easy for anyone to go out and promote musicians to others and help get those musicians and a larger audience, and all the RIAA has done, time and time again, is work as diligently as possible to prevent anyone but itself from promoting artists. What a shame. This "deal" does nothing to help up-and-coming artists and will significantly limit their ability to get their music noticed.


Reader Comments (rss)

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    ChurchHatesTucker (profile), Jul 7th, 2009 @ 6:04pm

    Payolla

    So, can we legalize payolla already? That seems to be the only way to guarantee a market-based solution.

    Why is it fair to mandate that money flows in one direction and not the other?

     

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    CleverName, Jul 7th, 2009 @ 6:04pm

    I am no econ expert ... but

    I remember something from econ101 ... supply and demand I think it was called. Upon examination of the graph, it is readily apparent that (in a free market) as price increases - demand falls. I think the trick is to find that sweet spot at which the demand times price yields maximum profit. It seems that the entertainment industry does not know where this point is, and they are pushing the boundary thinking that a curve is actually a straight line. But then I could be wrong.

     

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    Anonymous Coward, Jul 7th, 2009 @ 6:23pm

    Personally, I know a handful of musicians and they are hopping mad over this. While some of them aren't big fans of file sharing - they think it has the *potential* to limit their income streams but they are also wise enough to understand the added exposure has an equal chance to increase their income streams - they understand there are certain risks/benefits that have to be dealt with.

    However what most of them strongly object to is an organizations charging people to play their music - even if they don't want this organization to - and then charging them to join this organization in order to get "their" money. To them (and to me) THAT is REAL copyright infringement.

    Unfortunately, the RIAA has the financial means to pay politicians to make this "legal" and most of the musicians who oppose this sort of heavy handed treatment don't have the financial means to fit the major labels....at least not yet.

     

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      Anonymous Coward, Jul 7th, 2009 @ 6:45pm

      Re:

      However what most of them strongly object to is an organizations charging people to play their music - even if they don't want this organization to - and then charging them to join this organization in order to get "their" money. To them (and to me) THAT is REAL copyright infringement.

      If an artist wants to take music that they have written and give it away for free to radio stations on the Internet or elsewhere, or license it for free, what is stopping them from doing so again?

       

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        Big Al, Jul 7th, 2009 @ 10:02pm

        Re: Re:

        Normally it's the contract they signed with the label that stops them (the clause that says we own all your music - oh, and your firstborn as well)

         

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        Anonymous Coward, Jul 8th, 2009 @ 1:24am

        Re: Re:

        That would be the fact that SoundExchange requires no contract with the artist to collect these fees. You webcast it, you owe them. Period. It's one of the greatest scams in history.

         

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          Doctor Strange, Jul 8th, 2009 @ 1:50am

          Re: Re: Re:

          That would be the fact that SoundExchange requires no contract with the artist to collect these fees. You webcast it, you owe them. Period. It's one of the greatest scams in history.

          I'm sorry, in your opinion, who is getting scammed, and how?

           

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            Anonymous Coward, Jul 8th, 2009 @ 5:09am

            Re: Re: Re: Re:

            Everybody! Musicians that do not get paid. Public that can not listen to music. Advertisers that can not advertise. Sales people who can not sell.

             

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    Rekrul, Jul 7th, 2009 @ 6:43pm

    July 7th, 2009 will be known as the day Internet Radio died... (at least in the US)

     

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    ErikL (profile), Jul 7th, 2009 @ 6:58pm

    i THINK i was the first to email this in, but im a pretty heavy pandora user (ill stream for a week or 2 at a time), and this was an email i received earlier today if anyone wants to give it the once over


    Hi, it’s Tim -

    I hope this email finds you enjoying a great summer filled with music from Pandora.

    I’m writing with some important news. Please forgive the lengthy email; it requires some explaining.

    First, I want to let you know that we’ve reached a resolution to the calamitous Internet radio royalty ruling of 2007. After more than two precarious years, we are finally on safe ground with a long-term agreement for survivable royalty rates – thanks to the extraordinary efforts of our listeners who voiced an absolute avalanche of support for us on Capitol Hill. We are deeply thankful.

    While we did the best we could to lower the rates, we are going to have to make an adjustment that will affect about 10% of our users who are our heaviest listeners. Specifically, we are going to begin limiting listening to 40 hours per month on the web. Because we have to pay royalty fees per song and per listener, it makes very heavy listeners hard to support on advertising alone. Most listeners will never hit this cap, but it seems that you might.

    We hate the idea of capping anyone's usage, so we've been working to devise an alternative for listeners like you. We've come up with two solutions and we hope that one of them will work for you:

    *

    Your first option is to continue listening just as you have been and, if and when you reach the 40 hour limit in a given month, to pay $0.99 for an unlimited number of hours for the rest of that month. This isn't a subscription. We'll charge your credit card for just that one month and you'll be able to keep listening as much as you'd like for the remainder of the month. We hope this is relatively painless and affordable - the same price as a single song download.

    *

    Your second option is to upgrade to our premium version called Pandora One. Pandora One costs $36 per year. In addition to unlimited monthly listening and no advertising, Pandora One offers very high quality 192 Kbps streams, an elegant desktop application that eliminates the need for a browser, personalized skins for the Pandora player, and a number of other features: http://www.pandora.com/pandora_one.

    If neither of these options works for you, I hope you'll keep listening to the free version - 40 hours each month will go a long way, especially if you're really careful about hitting pause when you’re not listening. We’ll be sure to let you know if you start getting close to the limit, and we’ve created a counter you can access to see how many hours you’ve already used each month.

    We’ll be implementing this change starting this month (July), I’d welcome your feedback and suggestions. The combination of our usage patterns and the "per song per listener" royalty cost creates a financial reality that we can't ignore...but we very much want you to continue listening for years to come.

    Please don't hesitate to email me back with your thoughts.

    Sincerely,
    tim_signature.jpg

    Tim
    Founder

     

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    Anonymous Coward, Jul 7th, 2009 @ 7:07pm

    www.scrubradio.com

    No ads, and the RIAA doesn't get a dime!

    BOYCOTT RIAA until they don't exist!

    RIAA supported radio is dead, but music is still alive!

    Note to musicians: Sign under the RIAA radar and be boycotted too, or , do like many others are doing and be rewarded with the respect of your fans!

     

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    fogbugzd, Jul 7th, 2009 @ 7:19pm

    It isn't about the royalties

    This isn't really about the royalties from the recording industry's perspective. It is about controlling the distribution of music.

    The $25K entry fee guarantees that there won't be little indi stations setting up; there will only be a few big players and it is easier to control.

    The most significant thing is that it is basically impossible for little guys to come in and play just music that is in the public domain, or which bands want played for free. The industry's fear is that these little players will be promoting music that they don't control. People might discover that some of it is much better than the autotuned pablum that the industry likes to crank out.

     

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      Doctor Strange, Jul 7th, 2009 @ 7:34pm

      Re: It isn't about the royalties

      The most significant thing is that it is basically impossible for little guys to come in and play just music that is in the public domain, or which bands want played for free.

      Wait, what? How's that exactly? Where does it say that if I want to stream public domain songs and songs I have licensed that I have to pay a fee to anybody?

       

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        Sailingmaster (profile), Jul 7th, 2009 @ 7:43pm

        Re: Re: It isn't about the royalties

        You should read the other stories on this topic. Yes, you'll have to pay SoundExchange even for music that they don't have license to or represent.

         

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          Doctor Strange, Jul 7th, 2009 @ 8:00pm

          Re: Re: Re: It isn't about the royalties

          You should read the other stories on this topic. Yes, you'll have to pay SoundExchange even for music that they don't have license to or represent.

          I have read the other stories, but I think there are a number of things getting conflated here.

          When "fogbugzd" says:

          The most significant thing is that it is basically impossible for little guys to come in and play just music that is in the public domain, or which bands want played for free.

          I want to know what makes it "basically impossible" for someone to come in and play music that is 1) in the public domain and 2) which bands just want played for free.

          I believe these statements are false (in the case of (1)) and misleading (in the case of (2)).

          In the case of public domain recordings, there is no copyright, so there is no compulsory license, and SoundExchange need not be consulted.

          In the case of recordings "which bands just want played for free" it depends on who controls the copyright. If the band assigned their copyright to someone else and don't retain the right to negotiate other licenses for it, then tough noogies, they can go renegotiate with whoever they sold their copyrights to.

          If the band retains the copyright, and releases the work under license, I am fairly certain that they can waive their compulsory licensing fee. From the U.S. Copyright Office:

          Does the Intended User Have to Use a Compulsory License?

          No. The person wishing to make and distribute phonorecords
          of a nondramatic musical work can negotiate directly with
          the copyright owner or his or her agent.


          If the copyright owner (the artist who retained their copyright) wants to license it with CC0 or one of the Creative Commons licenses, it's unlikely that SoundExchange could legally collect anything from you on that recording.

          Can SoundExchange collect compulsory royalties on music that they do not have license to or do not represent? Yes, because they are the de-facto representative for compulsory licensing royalties. But I believe they cannot collect compulsory licensing royalties on songs that 1) are not copyrighted and 2) are licensed to the players/streamers by the copyright owners. If this is not the case, I'm willing to be enlightened.

           

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            The Infamous Joe (profile), Jul 8th, 2009 @ 9:53am

            Re: Re: Re: Re: It isn't about the royalties

            I want to know what makes it "basically impossible" for someone to come in and play music that is 1) in the public domain and 2) which bands just want played for free.

            FTA:
            All stations will be required to pay an annual minimum fee of $25,000, which they can apply to their royalty payments.

             

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              Anonymous Coward, Jul 8th, 2009 @ 11:03am

              Re: Re: Re: Re: Re: It isn't about the royalties

              All stations will be required to pay an annual minimum fee of $25,000, which they can apply to their royalty payments.

              So, playing just one song could cost you $25,000.

               

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    Sailingmaster (profile), Jul 7th, 2009 @ 7:46pm

    I think people forget...

    Radio predated the RIAA, and therefore was in the superior position for negotiating what they would pay in broadcast royalties.

    With webcasting the situation is reversed, and the only way you'll pry the RIAA's hands from around the throats of their revenue streams is when those hands are cold and dead.

     

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    B's Opinion Only (profile), Jul 7th, 2009 @ 7:54pm

    sad. when will they get it?

     

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    Anonymous Coward, Jul 7th, 2009 @ 7:56pm

    when will they get it?

    When they lose their last signed musician!

     

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      Anonymous Coward, Jul 7th, 2009 @ 8:12pm

      Re:

      Which means that people have to stop buying their shit. Which means that it will be a long fucking time because the god-damned sheeple in the US will continue buying whatever Jonas Brothers bullshit is put out because it makes their kids' panties wet which shuts them the fuck up. If all the parents in the country were killed, we might have a shot. Otherwise we may as well just bend over and take it because the politicians are owned by these organizations (especially now that the media friendly Democrats are in office....the oil and pollution friendly Republicans aren't as big on giving the RIAA everything they want).

       

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    monkyyy, Jul 7th, 2009 @ 8:15pm

    ok i`ve herd enough of this topic
    any of the good companies (like google and hulu) willing to start a pro-piracy campaign?
    since its clear that the anti-piracy are lier`s and corrupt http://techdirt.com/articles/20090707/1120525474.shtml

    free currently helps!!!!

     

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      Anonymous Coward, Jul 7th, 2009 @ 8:48pm

      Re:

      We don't need a fucking pro-piracy stance. We NEED to get rid of the RIAA through not buying their stuff. No one NEEDS to listen to major label music. DON'T BUY IT, DON'T DOWNLOAD IT, DON'T FUCKING LISTEN TO IT ON THE RADIO. Let radio advertisers know why you aren't listening to the stations they advertise on and why you aren't buying their products. Let radio stations know that you're listening to college indie stations or classical music stations instead of their music. Sent letters to the government (not emails and not through the webform at the whitehouse.gov site....actual paper letters) letting them know what you think of these scams that they are running with companies like SoundExchange. Let your reps know how you feel about them selling out our culture...your culture...for a few kickbacks. Let them know that's why you aren't voting for them again. Let them know that's why YOU want to run for office...to oust their sorry dishonest butts.

      Pro-piracy is bullshit. The answer isn't to give them fuel for their anti-piracy campaign. It's to show them that legitimate customers are no longer interested in their bullshit. If you're a pirate then they don't care what you think. If you're a pirate then no one who makes laws cares what you think because to them you're a two bit criminal. Real change takes time and work. If you're not up to it then fuck off.

       

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    fogbugzd, Jul 7th, 2009 @ 9:11pm

    Re: Re: Re: It isn't about the royalties

    Yes, it is hard to believe, but a band cannot license its own music to internet radio, even if it holds all the copyrights. Bands can allow download of their music, but they cannot allow it to be streamed for free.

    Soundexchange is charged with collecting all royalties on Internet Radio. The assumption is that someone owns the copyright on everything, and therefore Soundexchange collects royalties.

    I realize this is hard to believe because it flies in the face of common sense and a basic sense of right and wrong. But the recording industry doesn't care much about things like that.

     

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      David, Jul 7th, 2009 @ 10:17pm

      Re: Re: Re: Re: It isn't about the royalties

      As I recall, either a webcaster can pay royalties to SoundExchange, or can stream music that it has directly negotiated the rights to with the copyright holders. What they can't do is pay SoundExchange for the music it hasn't negotiated directly for, and also stream music it has directly negotiated deals for. So dealing with SoundExchange is an all-or-nothing proposition - either you pay royalties for all the music you stream, or you play music for which you have permission directly from the copyright holder, but not a combination of the two. Obviously, getting separate deals with thousands of independent labels is prohibitive, so webcasters are stuck with the royalty option.

       

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      Anonymous Coward, Jul 8th, 2009 @ 12:15am

      Re: Re: Re: Re: It isn't about the royalties

      I realize this is hard to believe because it flies in the face of common sense and a basic sense of right and wrong. But the recording industry doesn't care much about things like that.

      Neither, apparently, does the government.

       

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    eric, Jul 7th, 2009 @ 9:43pm

    25%

    the 25% is only for companies with 1.25 million or more in revenues. companies with under that pay either 7% of expenses or 12% of revenue, whichever is higher. The 25,000 initial fee counts towards those payments. Also webcasters have 30 days to decide if they want to accept this, use the old rates, or negotiate seperatly with individual artists and labels.

     

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      Norm (profile), Jul 7th, 2009 @ 11:56pm

      Re: 25%

      Parent is right. Mike, RTFA! From your post: "The agreement is an astounding 25% of revenue as a bare minimum, with a requirement to kick-in $25,000 just to be a webcaster at all."

      This is incorrect. From the article that you linked to: "Small sites with less than $1.25 million in revenue, like AccuRadio, Digitally Imported, and RadioIO, will pay 12 to 14 percent of it in royalties. All stations will be required to pay an annual minimum fee of $25,000, which they can apply to their royalty payments."

      The bare minimum is the annual $25,000, not the 25% of revenue. The 25% will apply to very few webcasters. (The article mentions only Pandora and Slacker) Most will pay around HALF of the only percentage that you included in your post, and in the headline nonetheless. Also, although this is probably an extension of the "bare minimum" inaccuracy, the $25,000 is not in addition to the percentage of revenue, which is what I initially interpreted your above quote to mean. Don't start this shit.

      However, I still wholeheartedly disagree with this outcome. The descrepancy between 4% and 12% is pretty astounding. ([Citation Needed] for the traditional broadcasters royalty rates) SoundExchange is simply trying to squeeze as much money as possible out of webcasters. They DO NOT have the artist's best interests in mind, which is who the purported non-profit organization supposedly represents.

      Note to parent: The article did not mention the 7% of expenses or the 30 day period for webcasters. Do you have a link?

       

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    Designerfx (profile), Jul 7th, 2009 @ 10:18pm

    disappointing

    this is very sad for pandora. They have no idea how fast they are going to go out of relevance. You got to wonder what kind of backdoor deal was made ot come up with 25%. 12% of revenue is still huge. $25k startup is also ridiculous.

    I'll pray someone makes their own station, does it for free, violates copyright, gets a lawyer, and fights back, I guess.

     

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    Tristin (profile), Jul 7th, 2009 @ 11:48pm

    Maybe good for Pandora

    In the US at least, this could end up being good for Pandora. They are one of the few sites that have enough revenue to pay the ridiculous licensing fees. Even with the lower tier of 7%, there are not many independent companies that can drop $25,000 up front and make any money. I have a hard time believing margins are high enough in a competitive market to sustain a company with that kind of cost.

    My guess is this deal kills off the majority of streaming sites and leaves a few big boys like Pandora and last.fm, as stated above. These few sites will receive the influx of listeners that have nowhere else to go and revenues will increase enough to support a 25% raping. They may even make money off the deal if the entire industry isn't killed off.

    I, for one, am all the more grateful for torrents, as they may soon be the only cost-effective way of discovering new music.

     

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    Anonymous Coward, Jul 8th, 2009 @ 12:17am

    Non-US Stations?

    Anybody know how this will affect non-US stations? Could stations just move out of the US?

     

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    David, Jul 8th, 2009 @ 1:44am

    What a racket

    This just sounds like extortion under another name to me! Does anyone know how "they" keep track of who's playing what and how the money is, doubtless, (!) fairly paid out to the artists? Suppose the stations have to keep logs?

     

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      Anonymous Coward, Jul 8th, 2009 @ 10:57am

      Re: What a racket

      Suppose the stations have to keep logs?

      No suppose about it. The law requires the covered stations to keep logs.

       

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    Lachlan Hunt (profile), Jul 8th, 2009 @ 5:48am

    Webcasters (and Radio stations) Should Pay for the Rights! (Though 25% is too much)

    What's bizarre is that radio stations in the US don't have to pay royalties to artists. Yes, I've heard the claim that it helps to promote the artists, resulting in more sales. But look at it this way: Radio stations are using the music they play to attract listeners, and they make a profit from the advertising they sell and play along with it. Why should the radio stations be able to freely take someone elses work and profit from it, without paying for the rights?!

    Consider TV broadcasters. They often buy TV shows from film studios. You could argue that by playing those TV shows, they're helping to promote more sales of DVDs, and thus broadcasters should be able to play any TV shows the like without paying for the rights.

    Also, consider that many other countries have systems that require radio stations to pay for the rights. Australia, for instance, requires them to pay roughly 3% of gross revenues (it varies depending on the station's revenue).

    So not only do I agree that webcasters should pay for the rights, radio stations should too.

    However, I will admit that I think being required to pay 25% is grossly disproportionate, and that they should fight for a much fairer rate, somewhere around 3%.

     

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      Anonymous Coward, Jul 8th, 2009 @ 6:19am

      Re: Webcasters (and Radio stations) Should Pay for the Rights! (Though 25% is too much)

      Being a musician, I believe that the FREE MARKET should decide the pay rate. Radio is a win/win for me and the radio station. I get free promotion and they get money from advertisers. Why can't I just win without people trying to muddy the water with legislation that will likely backfire?

       

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      Anonymous Coward, Jul 8th, 2009 @ 10:59am

      Re: Webcasters (and Radio stations) Should Pay for the Rights! (Though 25% is too much)

      What's bizarre is that radio stations in the US don't have to pay royalties to artists.

      The record industry is fighting to change that.

       

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    Steve, Jul 8th, 2009 @ 6:59am

    licensing

    I'm a bit confused -- if you didn't want to pay the rates, could you just not pull any songs that fall under the RIAA library?

    That is, not every webcaster has to pay the rates, do they? Is it just the ones who are simulating radio?

     

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    Anonymous Coward, Jul 8th, 2009 @ 7:05am

    How does this affect the independent podcasters that do a weekly, or even daily, hour-long show?

    For example, Billy-Bob's Down Home Country Hour...or Hanging on the Telephone with Punky Phil...or The Black Metal Witchfest with Magnus Slaughterstrom

     

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      Anonymous Coward, Jul 8th, 2009 @ 10:59am

      Re:

      How does this affect the independent podcasters that do a weekly, or even daily, hour-long show?

      Simple: They have to pay up.

       

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        Anonymous Coward, Jul 8th, 2009 @ 12:12pm

        Re: Re:

        $25,000? Yikes, I guess we just lost those folks.

        Too bad, there were a couple I enjoyed listening to...

         

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    EFried (profile), Jul 8th, 2009 @ 8:21am

    Selling Dirt

    25% sounds like a lot but it's the raw materials--it's what they sell. Cambell's Soup has to buy chickens to make soup, flour to make noodles. Manufacturers have to pay for cloth and labor to make clothing. Pandora, which is estimated to earn 40 Mil this year, should pay for their materials too. Even people who sell dirt charge for it.

    I get that the RIAA is bone-headed with how they've handled DRM (it doesn't work) and their sue happy approach is repulsive. But on the other hand, if a company is making 19 million and is expecting to up that to 40 million this year, I think the artists who create the actual product (OK, it's a delivery system, that's the product) or at least a significant part of the product, should get a taste. It's not a remote connection--without musicians there is no Pandora.

    A photographer took shots at a concert I did in Italy. He offered the low rez for free. Nice! I asked if I could get a few of the shots at a higher resolution for publication. I thought: think of the exposure you'll get, I can link to your website, you'll build a following....(sound of breaks screaching) NO! He asked for 20 Euro per shot. He wanted to get paid. Was he behind the times? Maybe.

    But sometimes you should just get paid for your work.

     

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    Anonymous Coward, Jul 8th, 2009 @ 8:29am

    Catastrophic Collapse

    Catastrophic Collapse is one of my favorite phrases. These collapses occur when a system is artificially supported through hype, regulation and/or laws meant to support a business or industry, and/or finanicial manipulation.

    A couple examples are....

    > the internet bubble
    > the housing bubble in the US
    > Tulips mania, February 1637

    What we are seeing with the movie and recording industry is a money grab. Their profits are falling and they dont want to and cant change.

    They dont want to change....
    The business model they have used for the past 60-80 years is monopolistic and Bureaucratic. With artists handing over all rights to labels. This leads to having people with a sense of entitlement, that cant think outside the box, in control. People who see any upstart as a threat needing to be bought outright, invested in with controls added, or legally squashed... this makes them slow to change and highly predictable .... good for us ... bad for them ... big ole GRIN ....

    They cant change...

    The Record industry is looking for a magic bullet business plan that they can implement across the board. In a chaordic system like the internet, where new ideas constantly crop up and are implemented, that isnt possible.

    The movie industries they have time based contracts. First show this in the theater, then sell it on DVD, then on cable, then on TV. This make then Highly predictable ... big Ole Grin...

    There are so many flaws in the way the recording industry is currently doing things. Alienating its customers, instilling fear, charging for what has always been free advertising for them, charging scout troups for the right to sing songs around the campfire, charging auto repair shops and stable owners for playing the radio in public, the list goes on. Everyone including the pope sees this as a problem.


    Catastrophic Collapses - means the sudden and utter failure of overlying "strata" caused by removal of underlying materials...

    anyone else see what is going to happen .....

     

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    Hephaestus (profile), Jul 8th, 2009 @ 8:30am

    Catastrophic Collapse

    Catastrophic Collapse is one of my favorite phrases. These collapses occur when a system is artificially supported through hype, regulation and/or laws meant to support a business or industry, and/or finanicial manipulation.

    A couple examples are....

    > the internet bubble
    > the housing bubble in the US
    > Tulips mania, February 1637

    What we are seeing with the movie and recording industry is a money grab. Their profits are falling and they dont want to and cant change.

    They dont want to change....
    The business model they have used for the past 60-80 years is monopolistic and Bureaucratic. With artists handing over all rights to labels. This leads to having people with a sense of entitlement, that cant think outside the box, in control. People who see any upstart as a threat needing to be bought outright, invested in with controls added, or legally squashed... this makes them slow to change and highly predictable .... good for us ... bad for them ... big ole GRIN ....

    They cant change...

    The Record industry is looking for a magic bullet business plan that they can implement across the board. In a chaordic system like the internet, where new ideas constantly crop up and are implemented, that isnt possible.

    The movie industries they have time based contracts. First show this in the theater, then sell it on DVD, then on cable, then on TV. This make then Highly predictable ... big Ole Grin...

    There are so many flaws in the way the recording industry is currently doing things. Alienating its customers, instilling fear, charging for what has always been free advertising for them, charging scout troups for the right to sing songs around the campfire, charging auto repair shops and stable owners for playing the radio in public, the list goes on. Everyone including the pope sees this as a problem.


    Catastrophic Collapses - means the sudden and utter failure of overlying "strata" caused by removal of underlying materials...

    anyone else see what is going to happen .....

     

    reply to this | link to this | view in chronology ]

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    icon
    Hephaestus (profile), Jul 8th, 2009 @ 8:31am

    Catastrophic Collapse

    Catastrophic Collapse is one of my favorite phrases. These collapses occur when a system is artificially supported through hype, regulation and/or laws meant to support a business or industry, and/or finanicial manipulation.

    A couple examples are....

    > the internet bubble
    > the housing bubble in the US
    > Tulips mania, February 1637

    What we are seeing with the movie and recording industry is a money grab. Their profits are falling and they dont want to and cant change.

    They dont want to change....
    The business model they have used for the past 60-80 years is monopolistic and Bureaucratic. With artists handing over all rights to labels. This leads to having people with a sense of entitlement, that cant think outside the box, in control. People who see any upstart as a threat needing to be bought outright, invested in with controls added, or legally squashed... this makes them slow to change and highly predictable .... good for us ... bad for them ... big ole GRIN ....

    They cant change...

    The Record industry is looking for a magic bullet business plan that they can implement across the board. In a chaordic system like the internet, where new ideas constantly crop up and are implemented, that isnt possible.

    The movie industries they have time based contracts. First show this in the theater, then sell it on DVD, then on cable, then on TV. This make then Highly predictable ... big Ole Grin...

    There are so many flaws in the way the recording industry is currently doing things. Alienating its customers, instilling fear, charging for what has always been free advertising for them, charging scout troups for the right to sing songs around the campfire, charging auto repair shops and stable owners for playing the radio in public, the list goes on. Everyone including the pope sees this as a problem.


    Catastrophic Collapses - means the sudden and utter failure of overlying "strata" caused by removal of underlying materials...

    anyone else see what is going to happen .....

     

    reply to this | link to this | view in chronology ]

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    Hephaestus (profile), Jul 8th, 2009 @ 8:32am

    sorry about the triple post .... wasnt logged in .... oops

     

    reply to this | link to this | view in chronology ]

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    Greg, Jul 8th, 2009 @ 12:14pm

    Not gonna fly...

    So instead of suing people for downloading, are they now going to start suing music bloggers and podcasters who clearly cannot afford to pay a $25k fee that allows them to share great new music with their followers?

    This is clearly not going to fly in the long run. Looks to me like the dinosaur that is the RIAA is simply collapsing onto it's last remaining leg.

    The rest of the world isn't going to jump on board with these types of ridiculous regulations.

     

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    Anonymous Coward, Jul 8th, 2009 @ 12:16pm

    I don't think anyone on the Internet radio side of the table considers this a good permanent solution. It is, as Kurt Hanson implies with one of his comments, a stopgap measure that allows Internet radio to survive until congress changes the rules to provide parity between broadcast, cable, satellite, and Internet.

    RIAA and the labels only recognize promotional value insofar as it promotes the current hits they want promoted. They had that sort of control over broadcast radio, and cable and satellite have few enough providers to allow for some degree of narrowing. But Internet radio provides diversity, discovery, and catering to niche tastes on a scale never before seen. And the record labels hate it because it's drawing too many consumers out the long tail where they're buying music from little-known artists, niche genres, and almost-forgotten oldies instead of the current releases.

     

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      Anonymous Coward, Jul 8th, 2009 @ 12:46pm

      Re:

      RIAA and the labels only recognize promotional value insofar as it promotes the current hits they want promoted. They had that sort of control over broadcast radio, and cable and satellite have few enough providers to allow for some degree of narrowing. But Internet radio provides diversity, discovery, and catering to niche tastes on a scale never before seen. And the record labels hate it because it's drawing too many consumers out the long tail where they're buying music from little-known artists, niche genres, and almost-forgotten oldies instead of the current releases.
      Excellent point...I have seen RIAA proponents argue this promotion of diverse, little-known, previously almost unknowable, niches is one of the problems with the internet. I think they referred to it as making the pool larger, but more shallow...or something like that. That's why from a consumer's point of view, the internet is great, but from the RIAA and collections agencies, etc's point of view, the internet is a threat.

       

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      Anonymous Coward, Jul 8th, 2009 @ 3:27pm

      Re:

      I don't think anyone on the Internet radio side of the table considers this a good permanent solution.

      Actually, I bet the big ones like it. It'll greatly reduce the competition, especially from uppity little start-ups.

       

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    Anonymous Coward, Jul 8th, 2009 @ 1:31pm

    Well this is a shame. I just started using Pandora about a month ago and I've already bought 3 CDs from music I discovered there. 40 hrs a month isn't going to cut it for me, I listen to it all the time because they simply play music I like that you will never hear on radio stations or MTV. I hear something new and exciting I go out and buy it, I sure as hell am not going to be signing up for any type of pay account to listen to music and then spend even more money on buying it.

    any % of 0 is 0. They just lost a listener and potential buyer of music so add in the previous amount of money 0 to the grand total of money I'm going to be spending on music I can't find anymore which is 0 and you get a whopping 0 dollars. Way to build a working business model!!

    Thanks!!

     

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      Anonymous Coward, Jul 8th, 2009 @ 3:30pm

      Re:

      Well this is a shame. I just started using Pandora...

      I'm not a current Pandora user and I doubt that I'll ever become one now.

       

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    Anonymous Coward, Jul 8th, 2009 @ 3:58pm

    logs? yes? ugggg?

    Apparently start and end times/duration are needed to calculate (1) the number of people who heard a given song (in order to match song play time with stream access during that time from your streaming logs) and (2) your station’s music Aggregate Tuning Hours (music ATH), which is the total hours of music streamed times the number of people listening at the time music was played.

    For each song played on each stream, please provide the following data:

    Song title
    Featured artist/group/orchestra
    Album title
    Marketing label
    Start time of song play
    End time of play or duration of song
    IP Address of requester ( they say to filter out non-US listeners)
    Date/time of request
    URL requested
    Status of request
    Duration

    Big Bro SX wants data! What could one do with all this data? besides throw a few pennies at artists once in a while.

    Also, can't play more than 3 songs from any one album, or 4 songs from any one artist with limits on how many consectutive plays from one CD or artist in a 3 hour period. Plus other rules that are just as bizzare. SX wants to try and block folks from assembling a collection of free music by streaming it :) hmmmmmm.....

    another thought, since they are too cheap to install their own logging capability, (just get some iPhones and hold them up to the speakers RIAA) and are making all folks that streamm turn in the data, they really won't know who's playing what unless the 'loggers' are 100% honest? I know it will be years before artists see any money out of this.

     

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      Anonymous Coward, Jul 8th, 2009 @ 6:34pm

      Re:

      Also, can't play more than 3 songs from any one album,...

      The record industry has been trying to get a rule like that for broadcast radio for *decades* (claiming that home taping amounted to "stealing", would kill the industry, etc.). The broadcasters, so far, have had enough lobbying pull in Congress to keep it from happening, but "the times, they are a changin'."

       

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      Anonymous Coward, Jul 8th, 2009 @ 6:39pm

      Re:

      IP Address of requester ( they say to filter out non-US listeners)

      I could see that kind of information being subpoenaed and being used against someone to in court to malign their character.

       

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    MacMusicGuy, Jul 9th, 2009 @ 9:22am

    You guys are forgetting a VERY large group of somebodys......

    What about the original artists who actually created the music in the first place? Copyright exists to encourage artists to create - and that encourage comes in the form of being able to actually own what you create.

    As owner, you CAN give it away. You can sell the rights to your creation. You can also get paid when someone else uses your creation.

    .... and that's what is at the heart of all these negotiations. The original creators of the material all of these stations are using (in the course of their business - i.e. they are making money) - SHOULD be compensated.... so when Pandora plays a tune, the writer should get paid, because Pandora is using that artist's material to make money (or attempting to make money, but that's another story.)

    It's the same with terrestrial radio, XMradio, etc. College campuses pay a royalty - called a blanket license. That money is funneled back to the writer.

    Remember, SoundExchange passes on those bucks to the writers (well, not ALL of it - but by law they are required to pass on MOST of it. I don't know the details). The trick is that the artist has to register - and there's even a list of artists who they are looking for on the site (as in they have $ for them but don't know where they are).

    So do you want to continue having an embarrassment of riches, music wise? pay your artists. otherwise all you'll get is cookie-cutter crap.

    ---

    ..and that is my humble-but-accurate opinion!

     

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      Anonymous Coward, Jul 9th, 2009 @ 2:06pm

      Re: You guys are forgetting a VERY large group of somebodys......

      What about the original artists who actually created the music in the first place?

      What about ALL creators? Shouldn't they all be treated the same? Just last weekend I was working with finishing some concrete for a small project I came to appreciate the artistic skill that many concrete workers display. Yet, I walk on it every day without paying royalties to the creators. It strikes me as terribly elitist to give some "artistes" special privileges and not others.

      ...so when Pandora plays a tune, the writer should get paid...

      What's being done with Internet radio goes well beyond that.

      It's the same with terrestrial radio...

      No, terrestrial radio doesn't pay royalties to performers at all. So to say that it is the same is just not true. Why are so many copyright supporters also such big liars? Judging from the type of some of the characters that are coming out in support of it, I wonder if maybe copyright isn't doing society more harm than good.

       

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    voxmanz (profile), Jul 12th, 2009 @ 10:47am

    "The idea that webcasters/broadcasters should need to pay artists for the right to promote them to fans just seems bizarre and borderline incomprehensible in the first place."

    Amazing. This is the same kind of argument used by clubs, radio stations, etc. as an excuse to not compensate artists for their work. Any other profession is paid for what they do. But you're an artist? Then you should be glad we're playing your music. No matter that that music is the reason people are listening to the station which attracts big money adverstisers so the station can be profitable.

    Entities like tech dirt constantly pretend to be standing up against the "big evil companies" that are trying to charge people for music and standing up for the artists (supposedly) as well. (And everyone jumps on the bandwagon attacking admittedly shady organizations like the RIAA. Some of the arguments are valid, but most of it is a red herring).

    Nonsense. Tech dirt and other similar entities are intent on eliminating copyrights completely so that the big tech companies can have free content with which to fill their expensive tech toys that are making the tech companies filthy rich.

    As an artist who has been playing hundreds of thousands of times on Pandora and received about $5 in royalties for that amount of play, and has had no significant sales because of that "airplay", I can say that such stations are
    not the main way an artist gets exposure and makes a living. I think it's great that they exist, and I agree that if an artist wants to give his stuff away or have it played royalty free, that they should be able to do so.

    But tech dirt isn't concerned with that in my opinion. Lobbyists for the tech industry want to eliminate copyrights (for the above stated reason).

    Want to eliminate copyrights? Fine. Let's eliminate PATENTS too. How would the tech companies feel about that? Free iphones, free everything.

    NO? Well, till then, copyrights for artists so their life's work can be protected.

     

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    DTH, Jul 14th, 2009 @ 5:37pm

    Big Surprise

    The RIAA wants to be able to control which artists can effectively promote themselves in the United States. In other news, labor unions want all workers in their industry to be in the union before they can get a job. The main thrust of this article seems to be "GASP! SPECIAL INTEREST GROUPS EXIST!"

     

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    LAS, Aug 7th, 2009 @ 7:21am

    Radio promotes Record Sales? Think Again.

    The notion that radio promotes record sales is worth examining. In "Don't Play It Again Sam: Radio Play, Record Sales and Property Rights," Stan J. Liebowitz (School of Management, University of Texas at Dallas) found that the assumption is unjustified, and that overall radio listening is a substitute for the purchase of sound recordings. Prior to the advent of digital communications, there well may have been an important promotional function, since radio was one of the only places you heard new music. But today the vast majority of music played on terrestrial radio is over 2 years old. (The Future of Music Coalition study, "Same Old Song: An Analysis of Radio Playlists in a Post-FCC Consent Decree Word," found that "more than 50 percent of the spins ... were of songs more than FIVE years old.") Thus, terrestrial radio stations are not "promoting" new records. They're attracting listeners and earning advertising dollars by playing songs and artists that stand the test of time.

    The second issue to consider is the claim that music publishers stand in a different position from sound recording owners and recording artists whose performances are embodied on sound recordings vis a vis radio play. If radio promotes record sales, publishers and songwriters also benefit, because they earn mechanical royalties on every record sold, just like recording artists do (except that publishers are not subject to recoupment of advances and recording costs as are recording artists.) So the argument doesn't hold: what's good for the publishers should be good for record companies and artists.

     

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    Guy Ward, Aug 25th, 2009 @ 4:01am

    live web cast

    I broadcast there music free for the whole world to see them live in real time I post there links so MY!!!!!! viewers can buy there merch
    Iam just a video radio station on line and live
    Iam just letting the world fall in love with them like i do
    and if any band does not want me to broadcast them then I dont
    But its never without there promission!!!!
    You got a problem with this them me and a few of the bands that I broadcast will come down to what ever hole you live in and rip you a new ass hole



    Where do you live.......lol Just wondering....lol

    ASSHOLE!!!!!!!!!

    Iam for real come to NYC and you wont leave this city ALIVE!!!!!!!!
    Guy Ward
    Owner of NYC Live Rock

     

    reply to this | link to this | view in chronology ]


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