From Radio & Internet Newsletter:

In a column today about the ongoing judicial appeal of the 2006-10 CRB royalty decision, San Francisco-based MarketWatch columnist Therese Poletti writes, "The dysfunctional music industry suffers from a classic case of biting the hand that feeds it.

"Over the last two years," she notes, "record companies have tried to squeeze excessive royalties from Internet-radio stations — the very stations that can help fuel future digital-music sales — and it's endangering some Web-based radio firms." Poletti argues that the exposure and sales Internet radio affords and generates are benefits, not challenges to the embattled industry.

Most who are close to negotiations seem to want to stay mum about the situation; Poletti says reps of Pandora and SoundExchange didn't want to talk to her.

But Michael Spiegelman, head of Yahoo Music, is somewhat more removed, as his company recently turned over its webcasting business to CBS Radio (as has AOL, both companies citing the rising costs of licensing as a major impetus). Spiegelman told MarketWatch, "Internet radio facilitated discovery while compensating artists and labels for their effort. They may feel in the short term (the high royalty rate) gets them a better revenue stream. But in the short term, it's driving the Webcasters out of business."

Closer to the action is Jon Potter, head of DiMA (Digital Media Association, which represents large company webcasters). He says the record industry isn't even actually negotiating. "We were presented with a take-it-or-leave-it offer from SoundExchange. It was unacceptable."

Poletti, a senior columnist for MarketWatch, concludes, "I hope the appellate court is more sympathetic to the young Webcasting firms than the CRB. But the music industry never should have let their negotiations derail this badly. Once again, the industry seems to be using artists as a cover for incessant greed. Instead, they should encourage as much legal digital music as possible."

Read the entire MarketWatch story here.

Labels: accuradio, copyright royalty board, crb, digital freedom, electronic rights, house of representatives, HR 2060, internet radio equality act, riaa, soundexchange

No, not that kind of briefs. Legal briefs, silly. The briefs are part of webcasters' appeal before the U.S. Court of Appeals for the District of Columbia Circuit to overturn the Copyright Royalty Board's monumental March 2007 mistake raising far beyond reason the copyright royalty rate on internet radio.

From The Radio And Internet Newsletter (RAIN):

According to the timeline currently in place, the briefs of the various webcasters are due on Feb. 25.

The brief of the CRB, represented by the Department of Justice, is due on April 25, and SoundExchange’s brief is due on May 15. The reply briefs are due on June 12, but oral arguments have not yet been scheduled. Such a calendar suggests that the appeal will be decided at the end of 2008, at the earliest.

Until then, the parties may continue to negotiate and reach agreement outside of court, as has already occurred. SoundExchange, representing the music industry, has shown a desire to achieve separate agreements among the parties, rather than a comprehensive settlement that covers all parties…

The royalty rate legislation that is before Congress, if enacted, may ultimately nullify the Court of Appeals’ decision and any agreements SoundExchange has entered.

Still, what is needed is a rate structure that is technology-neutral…

Read bout it in the New York Law Journal via KurtHanson.com.

Labels: capitol hill, copyright royalty board, crb, digital freedom, electronic rights, house of representatives, HR 2060, S 1353

Ars Technica reports that EMI, one of the Big Four Labels, is considering cutting funding for recording industry trade groups -- including the RIAA.

The RIAA campaign of intimidation via lawsuits against file sharers has been a financial disaster and an even greater public relations disaster. This may be why EMI is considering reallocating the funds used by the RIAA to invade their customers' privacy, sue their target audience, sue dead people, collude on price-fixing, and make false and/or misleading statements.

Via it's front group SoundExchange the RIAA is also responsible for the precarious place (financially and legally) webcasting is in right now thanks to the ridiculous Copyright Royalty Rate hike on internet radio earlier this year.

If EMI pulls funding it would stand to reason that the rest of the Big Four would follow suit. Could this mean the end, or at least the declawing, of the winner of the 2007 Worst Company In America award, The RIAA? I'm not getting my hopes up, but man does that thought make me smile.

A tip of the headphones to Ars Technica via Gizmodo via State Of The Day.

Labels: copyright royalty board, crb, HR 2060, internet radio equality act, riaa, riaa sucks, savenetradio.org, soundexchange

Some people deny Global Warming. The rest of us know that it is a real and dangerous phenomenon that needs to be dealt with it.

Some people (the RIAA and it's front groups) deny that exposing music via airplay has promotional value. The rest if us know that these denials are lies, and these people prove daily that they are lying by continuing to spend millions promoting music to radio. Here's a new strategy that counters the BS denials. I like a lot:

A bipartisan resolution recognizing the promotional value of free radio airplay was introduced last week in the U.S. House of Representatives. The resolution was introduced by Reps. GENE GREEN (D-TX) and MIKE CONAWAY (R-TX) and cosponsored by 51 additional members of Congress.

"Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over-the-air, or on any business for such public performance of sound recordings," read House Concurrent Resolution 244.

Commenting on the resolution's introduction, NAB EVPO DENNIS WHARTON said, "NAB salutes Reps. GREEN and CONAWAY and their House colleagues for formally recognizing radio airplay's enormous value to both record labels and recording artists. The undeniable fact is that radio airplay is a musician's greatest promotional tool and generates millions of dollars in revenue annually for RIAA-member companies and performers."

It's nice having the NAB on our side.

Meanwhile SoundExchange, the front group for the RIAA (which is a front group for the major record labels) recently proposed that cable radio pay a copyright royalty fee of less than 7.5% of their revenue. SoundExchange strongly opposes the Internet Radio Equality Act, which calls for almost exactly the same copyright royalty rate for internet radio. Why the discrepancy?

Webcasters would jump at a deal like this, yet it is not being offered to us. SoundExchange continues to insist that it is negotiating in good faith. It's kinda like the Bush administration feigning disapproval of the FEMA tactic of holding a fake news conference.

From SaveNetRadio.org:

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.

"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.

Wouldn't it be something if the little guys finally forced a little fairness out of the big guys?

Labels: HR 2060, internet radio equality act, riaa, riaa sucks, S 1353, savenetradio.org, soundexchange

From SaveNetRadio.org:

Thank you once again for your support of the SaveNetRadio Campaign. On Wednesday morning, 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.

Please take a moment to call Senator Boxer at (202) 224 - 3553 and ask her to attend this important hearing. The Internet Radio Equality Act is still pending in the U.S. Senate and House of Representatives; this hearing will give Members an opportunity to learn more about this legislation - make sure they don't miss it. Please call now.

It is helpful when calling your congressional representatives to give the following information:

* 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.

Again, please call Senator Boxer at (202) 224 - 3553 and ask her to attend this important hearing. Thank you once again for your support of the SaveNetRadio campaign, this issue could not have gotten the attention it has without your support and cannot move any further without your continued efforts.

Labels: capitol hill, copyright royalty board, crb, house of representatives, HR 2060, internet radio equality act, riaa, S 1353, savenetradio.org, soundexchange

David Oxenford, representing a small group of internet broadcasters, reports on the latest negotiations between the group he represents (Small Commerical Webcasters) and SoundExchange. Without stating it directly Oxenford makes it clear that negotiations over new royalty rates and related issues are going slowly and will require action by Congress.

At least the SCW group gets to negotiate. The rest of us are left hanging, or are sent laughable non-offers designed to make it look to Congress and the press like SoundExchange is really trying to work things out.

Read more at Oxenford's Broadcast Law Blog, via Radio and Internet Newsletter (RAIN).

Labels: CMJ Chart, copyright royalty board, HR 2060, internet radio equality act, riaa, soundexchange

This week SoundExchange, the organization created to disperse royalty payments from internet radio to artist, unveiled a new settlement offer to small webcasters. This "offer" is a joke. For a small webcaster looking to strike a fair deal it is completely useless.

The offer is a smokescreen intended to make it appear to Congress, the media, and the public that the RIAA is negotiating in good faith with webcasters. Perhaps the pre-recess threat by Senators Ron Wyden (D-OR) and Sam Brownback (R-KS) to bring the Internet Radio Equality Act to the Senate floor inspired this latest non-starter of an offer.

Such an offer is also part of a divide and conquer strategy -- webcasters big and small, interactive and non-interactivem have remained largely united in this fight. Now that the RIAA (through it's front group SoundExchange, through it's front group musicFIRST) is trying to extend this performance royalty fee to terrestrial radio, the coalition will grow in both size and power. I look forward to having the National Association of Broadcasters on our side in this battle.

Back to the "offer" at hand:

*SoundExchange insists on an annual revenue cap of $1.25 million to define "small webcaster." The revenue cap for over-the-air broadcasters to be considered a small business is $6.5 million -- why such a disparity? Why any disparity?

What this revenue cap effectively does is punish successful internet radio stations for being ...successful! If Webcaster A has revenues of $1,249,999.99 million, Webcaster A pays a percentage of that revenue to SoundExchange and stays in business. If Webcaster B earns $1 more than Webcaster A, the royalty rates increase to those set in the fatally flawed March 2, 2007 Copyright Royalty Board rate hike. Webcaster B would owe more in this one fee than was earned all year, which puts Webcaster B in debt and out of business. Damn that extra dollar earned.

This is SoundExchange insisting that webcasters accept a disincentive to grow as part of the deal.

*The SoundExchange offer only covers the music of its 20,000 members, not the hundreds of thousands of recording artists getting played on internet radio, so if webcasters play anything by anyone not on their member list, the bankruptcy-level Copyright Royalty Board rates come back into play.

*This settlement offer sunsets in 2010, at which time webcasters will have to go through all of this again and not be allowed to mention this deal as precedent when the RIAA once again attempts to gouge and ultimately control what gets played on internet radio.

Please, Congress: re-write the Digital Millennium Copyright Act, or section 114 of copyright law, to update the misguided provisions written into law over a decade ago (which is forever in computer chronology -- most people didn't even have at-home access to the internet in 1998!).

Update (8/23): an interesting take on the motives for the recent SoundExchange smokescreen.

Labels: copyright royalty board, crb, house of representatives, HR 2060, internet radio equality act, musicFIRST, riaa, riaa sucks, S 1353, soundexchange

As previously reported here, last Thursday the four mega-conglomerate major labels (under the pseudonym SoundExchange) agreed to allow webcasters to continue to pay royalties at the pre-CRB rates past the July 15th deadline if we continued to negotiate new rates in good faith. Just hours later the major labels started negotiating in bad faith by introducing an unreasonable post-agreement condition -- that webcasters invent and impose digital rights management (DRM) technology on our streams that will prevent stream-ripping (copying).

It is impossible to negotiate an reasonable agreement when one side keeps moving the goal posts. Under these conditions the current efforts towards a settlement are pointless -- this is precisely why we need the Internet Radio Equality Act passed. We must fix the source of this problem, namely the Digital Millennium Copyright Act, which opened up this copyright royalty loophole way back (1998) before anyone knew what internet radio would look like. Only then will webcasting be safe from the digilliterate dinosaurs whose idea of saving the movie industry was outlawing VCRs.

Besides the issue of bad faith negotiations, the major labels' DRM demand is a red herring, something that distracts attention from the real issue. For me and others I know, stream-ripping is used to time-shift programs. Like when people record a TV show on a VCR or DVR so it can be enjoyed some other time, people use stream-rippers to record their favorite internet radio shows like my (shameless plug!) award-winning "480 Minutes" program, Fridays, 9am - 5pm Pacific Time.

Copying internet radio is the a lot like copying FM radio in three main ways -- it is really easy to do, the resulting recording is lousy, and (with current technology) it is impossible to stop.

Wait! I have an idea! If the major labels can convince over-the-air radio to invest in and invent a way to prevent the recording of FM radio, webcasters will do the same for internet radio. Over-the-air radio has a 30+ year head start on us, and that still sounds fair.

Jokes aside, if anyone is willing to build a music library by copying my 64kbps stream (CDs are 320kbps) well, those few folks weren't ever going to fork over $18.98 for the new White Stripes CD, anyway. Keep in mind too that, like those mixed tapes I used to make from WLIR by leaving the record and pause buttons pressed on my boom box in the 80s, these recordings will include cross-fades between songs, public service announcements, and DJs yapping over top of them.

Despite the major labels' efforts to pin fault for their failing business model on webcasters, it is apparent to just about everyone (inluding the promotions departments at the major labels!) that airplay on internet radio promotes artists. If not us, then who could be responsible for the decline in sales? Perhaps CD sticker-shock all these years later has something to do with declining sales. Had the majors not colluded to price-fix CDs throughout the 1990s when music sales and profits were through the roof, maybe people would feel more guilty about stealing music from them? Sounds plausible.

Read the DiMA reaction to this latest major label sidestep, and check out how quickly things can turn ugly.

Labels: copyright royalty board, cr, crb, HR 2060, internet radio equality act, riaa, riaa sucks, soundexchange

Web radio sites go silent in protest Business 2.0, CA - 5 hours ago New licensing fees could doom Internet radio, but webcasters are fighting back with a 'Day of Silence.' Business 2.0's Chris Taylor investigates. ...

Web Radio Stations Hope Silence Speaks Volumes About Fee Hike Washington Post, United States - 7 hours ago By Mike Musgrove No, music fans, there isn'ta problem with your Web connection -- it's just that many Internet radio stations are deliberately offline today ...

Online Webcasters go silent to protest higher music royalties Malaysia Star, Malaysia - 19 hours ago NEW YORK (AP) - Dozens of online music broadcasters will go silent on Tuesday to protest a new set of royalty rates that many smaller companies say would ...

Online Webcasters go silent to protest The Age, Australia - 20 hours ago Dozens of online music broadcasters will go silent on Tuesday to protest a new set of royalty rates that many smaller companies say would put them out of ...

Internet Radio Outlets Protest Royalties Forbes, NY - 20 hours ago AP 06.25.07, 5:50 PM ET Dozens of online music broadcasters will go silent on Tuesday to protest a new set of royalty rates that many smaller companies say ...

Internet Radio Observes Day Of Silent Protest Information Week Weblog, NY - 30 minutes ago The intent of the protest is to demonstrate what will be heard on July 17th, the date that 17 months of retroactive royalty payments are due. ...

World Wide Web Net Radio Goes Silent To Protest Royalty Hike CIO Today, CA - 1 hour ago By Jennifer LeClaire Internet-only webcasters and broadcasters that simulcast online are protesting royalty hikes in a "Day of Silence," alerting their ...

The Sounds of Silence Will Be Heard by Millions Top40-Charts.com, NY - 2 hours ago WASHINGTON, DC (Top40 Charts/ SaveNetRadio) - The regularly scheduled programming of millions of Internet radio listeners will be temporarily interrupted ...

The Day the Music Died on the Net CIO Today, CA - 3 hours ago By Hiawatha Bray The Digital Music Association, which represents Internet broadcasters, has asked a federal court to suspend the Internet radio royalty fee ...

Web radio broadcasts 'sound of silence' in rate-hike protest Manila Times, Philippines - 4 hours ago Internet radio listeners will tune in to the sound of silence on Tuesday as webcasters protest a sharp rise in royalty fees that critics say will force ...

Internet radio stations observe 'Day of Silence' PopMatters, IL - 6 hours ago by Brad Kava SAN JOSE, Calif.—When 29 million music listeners turn to their favorite Internet radio stations Tuesday, many will be greeted with the sound of ...

Web radio broadcasts 'sound of silence' in rate-hike protest PhysOrg.com, VA - 9 hours ago A man listens to the radio on his computer. US Internet radio listeners will tune in to the sound of silence on Tuesday as webcasters protest a sharp rise ...

Web radio broadcasts 'sound of silence' in protest Middle East Times, Egypt - 11 hours ago LOS ANGELES, CA, USA -- US Internet radio listeners will tune in to the sound of silence Tuesday as Webcasters protest a sharp rise in royalty fees that ...

Internet radio stations to protest royalty hikes calendarlive.com, CA - 12 hours ago By Jim Puzzanghera, Times Staff Writer It's a protest staged by online radio stations to preview what they say will happen when substantially higher royalty ...

Webcasters go silent as protest Deseret News, UT - 12 hours ago AP NEW YORK — Dozens of online music broadcasters will go silent today to protest a new set of royalty rates that many smaller companies say would put them ...

Online Webcasters Go Silent To Protest Music Royalties 6abc.com, PA - 17 hours ago NEW YORK (AP) - June 25, 2007 - Dozens of online music broadcasters will go silent on Tuesday to protest a new set of royalty rates that many smaller ...

Federal Discord Over Royalty Hikes ABC News - 1 hour ago Artists wail against royalty fee increases for Web broadcasters who offer a rare promotional service for independent musicians. ...

Day of silence for Net broadcasters San Jose Mercury News, USA - 1 hour ago By Brad Kava When 29 million music listeners turn to their favorite Internet radio stations today, many will be greeted with the sound of silence - but not ...

Day of Silence Macworld, CA - 2 hours ago By Christopher Breen If you’re accustomed to listening to streaming Internet radio or streaming music services such as Pandora, you may be surprised to ...

If You Like Online Radio, Call Your Congresspeople -- Seriously Wired News - 3 hours ago By Eliot Van Buskirk June 26, 2007 | 10:39:49 AMCategories: Save Net Radio With all the lead-up to today's "Day of Silence" for webcasters in protest of the ...

Utah Public Radio shuts down Webcast for a day Salt Lake Tribune, United States - 4 hours ago AP Posted: 8:54 AM- LOGAN - Utah Public Radio will shut down regular programming on its Web stream to protest music royalties for Internet radio. ...

Is Silence Golden? InformationWeek, NY - 4 hours ago Since a bunch of badly-disguised radicals trespassed on a merchant ship and tossed some of its cargo into the waters of Boston Harbor, people have come up ...

Day of Silence: Internet Radio Goes Dark Washington Post, United States - 6 hours ago If you listen to music, news or other programming via the Internet, you're likely to find a soundstream of silence today. The Day of Silence is a one-day ...

'Day of silence' for US web radio BBC News, UK - 8 hours ago Web radio broadcasters across the US will hold a "day of silence" on Tuesday in protest at plans to hike royalty payments when music is played online. ...

Tiny Web radio stations squawk over royalty fees San Francisco Chronicle, USA - 8 hours ago Internet radio DJs are replacing their eclectic playlists with a "Day of Silence" today, a protest against new royalty rates they say could decimate the ...

A kind of hush all over Web radio San Diego Union Tribune, United States - 9 hours ago Thousands of Internet radio stations will stop the music today for the National Day of Silence, a nationwide protest of an impending increase in royalty ...

A Royalty Pain Hartford Courant, United States - 11 hours ago By JANICE PODSADA, Courant Staff Writer Charles R. St. James is one of thousands of people who operate an Internet radio station. At any given time, ...

Don't silence us Boston Globe, United States - 11 hours ago By Seth Kroll | June 26, 2007 FAMILY JUNCTION is a band made up of five childhood friends. We decided that, after college, we were going to take on the ...

Net radio battles royalty ruling with silence Globe and Mail, Canada - 22 hours ago To paraphrase a well-used joke: if an Internet radio station falls in cyberspace, does anybody here it? That's the question many online radio listeners ...

Web radio broadcasts 'sound of silence' in rate-hike protest South Asian Women's Forum, India - 22 hours ago LOS ANGELES (AFP) - The SaveNetRadio Coalition said thousands of web-based broadcasters would participate in the "National Day of Silence", ...

Internet radio to go silent tomorrow MP3.com - Jun 25, 2007 By Jim Welte - MP3.com Webcasters to protest recent hike in the royalty rates they pay to play music on their sites; most majors on board except for Last.fm ...

Dozens of internet radio sites are declaring a day of silence ... CNBC, NJ - Jun 25, 2007 Network ad prices are up despite a ratings slide. CNBC's Julia Boorstin has the story. National Day Of Silence: Will Internet Radio Be Heard? ...

Webcasters Announce 'Day of Silence' Spin, NY - Jun 25, 2007 Attention web radio listeners! Tomorrow (June 26), thousands of webcasters will go silent or air intermittent public service announcements in an effort to ...

Web Broadcasters Plan Protests Over Music Royalty Payments CNBC, NJ - Jun 25, 2007 By CNBC.com | 25 Jun 2007 | 10:59 AM ET Some fans of Internet radio may click on their favorite Web site and hear nothing but silence on Tuesday. ...

2 radio Web streams join 1-day blackout over royalty fees Louisville Courier-Journal, KY - Jun 25, 2007 Listeners who log onto to WFPK 91.9-FM or WUOL 90.5-FM Internet streaming radio tomorrow between 9 am and 5 pm will hear the sound of silence. ...

Internet radio operators plan silent protest Cleveland Plain Dealer, OH - Jun 25, 2007 Internet radio listeners will hear SOS -- sounds of silence -- from their computers and cell phones on Tuesday, when Webcasters plan to stop the music as a ...

A Look at Radio Silence: When Copyright Law Reform Goes Terribly Wrong FindLaw, CA - Jun 25, 2007 By CECILY MAK This Tuesday, June 26, is a "day of silence" on which webcasters will protest the hike in Internet radio royalty rates, scheduled to become ...

Net radio prepares for day of protest iT News, Australia - Jun 24, 2007 By Clement James, 25 June 2007 15:47 AEST Internet, Government/Law Thousands of US webcasters will go silent on 26 June in a bid to draw attention to ...

Radio Javan's Day Of Silence on Tuesday Radio Javan, GA - Jun 24, 2007 On Tuesday, June 26th, Radio Javan will be participating in Internet radio's Day Of Silence. The future of Internet radio is in immediate danger and ...

Internet Radio Day Of Silence Spacelab, MN - Jun 24, 2007 In the ongoing struggle between web radio broadcasters and the Copyright Royalty Board's proposed rate fees, a new development has emerged to show ...

Labels: copyright royalty board, HR 2060, internet radio day of silence, internet radio equality act, press, S 1353, savenetradio.org