Traditional Radio Stations Agree To Webcasting Rates; Internet Only Webcasters... Not So Much

from the battle-still-brewing dept

While the big radio stations, represented by the NAB seem to have worked out a deadline deal on webcasting rates, it appears that internet-only webcasters have had their talks break down. This is bad news, of course. The whole situation is something of a farce. Rather than letting the market work the issue out directly, the Copyright Royalty Board (basically some internet-illiterate judges) basically gave the recording industry everything it wanted when it declared what the rates should be -- and made them quite high. Many online radio stations noted that the rates were so high that they would shut down. And, of course, the whole process would make RIAA-spinoff SoundExchange tons of money in administrative fees while separately benefiting the major labels that make up the RIAA by driving the smaller indie webcasters (who play less RIAA music) out of business. A win-win! And, of course, protesting by playing non-RIAA music wouldn't help. SoundExchange gets to collect for that music as well.

About the only reasonable thing was (despite the CRB's refusal to stay the ruling) that SoundExchange agreed to hold off new royalties while the parties negotiated. Time to work out a deal was supposed to end last fall, and despite SoundExchange and many webcasters asking for more time, the NAB lobbied hard to deny that extra time. Luckily they got it anyway, but even the extended period of time has ended. NAB and its big radio stations are fine with their deal, but internet-only webcasters still don't see anything reasonable. On top of that, SoundExchange made a separate offer to "small" webcasters, but most have found that to be way too onerous as well -- especially the part where if they ever get acquired by a larger player, they'll have to go back later and pay the higher rates even for the time when they were small and independent.

And, no one has yet explained why webcasters should need to pay so much money for helping to promote new acts in the first place. Radio, streaming online or over the air, is a great way for people to learn about new acts, giving them reasons to go out and buy products and merchandise or see those acts live. By forcing the very people who want to promote the music to pay ridiculous fees, all the industry is doing is shooting itself in the foot. Again.

Filed Under: copyright royalty board, radio, royalties, webcasting
Companies: nab, soundexchange


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  1. identicon
    Kirk, 18 Feb 2009 @ 8:22am

    Very Smart.

    Collecting at their rates for even non-RIAA music is essential to the RIAA’s reign of tyrannical greed. Watch this Larry Lessig Video, in which he talks about ASCAP and BMI in the 30's and 40's. It seems the RIAA has the ability to learn from some of their mistakes:
    ASCAP said, "Pay us all your money. More. More!"
    Broadcasters said, "We'll just use public domain music."
    ASCAP said, "Yeah! Like that's going to work! The people demand the best."
    It worked. The public domain music, even if inferior (I don't know if it was) was good enough for the stations to turn their backs on ASCAP. ASCAP was broken, and agreed to reasonable licensing rates.
    By making sure they can charge for almost any music, they are ensuring that history is not repeated. I guess as long as we have copyright, no market mechanisms should be allowed to influence the industry. NOT.

    http://www.youtube.com/watch?v=7Q25-S7jzgs

    "COMPETITION BAD!"

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