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A Reprieve for Internet Radio

Posted by Zonk on Mon Jul 02, 2007 06:09 AM
from the i-can-keep-getting-my-soundtrack-fix dept.
westlake writes "In the wake of Internet Radio's Day of Silence, SoundExchange has proposed a temporary $2500 cap on advance payments 'per channel/per station.' The Digital Music Association responded immediately in its own press release that it would agree to this, but only if the term for the new arrangement were extended to 2010 — or, preferably, forever. On another front, SoundExchange seems aware in its PR that it will have to concede something more to the non-profit webcaster, if it is to avoid Congressional action."

Related Stories

[+] Small Webcasters Offered a Rate Break, Reject It 123 comments
Pontifex minimus writes "Music royalty collection group SoundExchange has offered an olive branch to small webcasters. They are willing to delay the exorbitant new rates set by the Copyright Royalty Board until 2010 for small webcasters in hopes that they can keep Congress from passing the Internet Radio Equality Act. Larger outfits, like Live365 and Pandora would not be affected and would have to pay the new rates. '"Although the rates revised by the CRB are fair and based on the value of music in the marketplace, there's a sense in the music community and in Congress that small webcasters need more time to develop their businesses," said John Simson, executive director of SoundExchange.' SaveNetRadio rejected SoundExchange's offer, saying that it 'throws large webcasters under the bus.'"
[+] Day of Silence On the Internet 276 comments
A number of readers sent in stories about Net radio going dark for a day. Not all of it, but according to the Globe and Mail at least 45 stations representing thousands of channels. The stations are protesting a ruling establishing royalty rates that will put most of them out of business on July 15. "The ruling... is expected to cost large webcasters such as Yahoo and Real Networks millions of dollars, drive smaller websites like Pandora.com and Live365.com out of business and leave a large chunk of the 72 million Net radio listeners in the dark." SaveNetRadio has a page where US residents can locate their senators and representatives to call them today.
[+] Politics: Internet Radio's 'Second Chance' Bogging Down in House 105 comments
An anonymous reader writes "Wired is reporting that the Internet Radio Equality Act is failing fast in the House, with negotiations breaking down over fair pricing for internet radio broadcasters. 'A legislative setback could make it harder to dislodge the new fees, which took effect last month after a federal appeals court refused to postpone the payment deadline. With the threat of congressional backlash fading, SoundExchange could find little incentive to budge from its current position ... SoundExchange has already proposed changes that could relieve small and custom-streaming sites from charges they could not possibly afford to pay, at least in the short term. Many expect a small-webcaster deal to be done by early September, when Congress goes back into session. But the deal on the table hasn't changed since SoundExchange extended an offer in May to charge them 10 percent of gross revenue under $250,000, or 12 percent of gross revenues over $250,000, with a revenue cap at $1.25 million.'" All very cushy for SoundExchange. Wired also points out that this is the same organization illegally lobbying for terrestrial radio royalties through 'third party' shell groups.
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  • Still a chunk of change (Score:3, Interesting)

    by Anonymous Coward on Monday July 02, @06:16AM (#19715473)
    And wasn't the contention that they were demanding these fees even from stations that exclusively "broadcast" public domain or copyleft works?

    It's the end of radio, can you hear me now?
  • "didn't realise" (Score:5, Insightful)

    by clickclickdrone (964164) on Monday July 02, @06:23AM (#19715507)
    (http://pcbookreview.com/)
    That phrase that they "didn't realise" these stations have thousands of channels just points to how ill researched these organisations are. They're putting in knee-jerk regulatory and charging regimes that just don't fit the real world. It's probably not even crossed their mind that half of them are trying to charge for listeners in countries that don't even fall under their jurisdiction.
    We're going through a painful growing stage that's going to be full of 'WTF?' moments but I'd be surprised if in ten years time, the music industry landscape will be drastically different with self-publishing bands, CDs a rarity (or their replacement format) and the licencing juggernaut that we have right now being relegated to history.
    The only reason I can see for the industry as it stands to exist is R&D but they do so little of that now as to be moot. If a band doesn't hit the big time on their first single/album, they're dropped, no more the nurturing of a band over several albums while they find their stride.
    The HiFi brigade will naturally be less than enthused about MP3 as a primary format but that will no doubt be replaced with some sort of lossless DRM free format by then.
    • Re:"didn't realise" by b0z0n3 (Score:3) Monday July 02, @06:30AM
    • The Copyright Royalty [...] apparently didn't understand that webcasters such as Pandora and Live365 offer thousands of streams.
      Yeah, I thought that too... but I think it's more of a rhetoric trick from TFA's author to make them look Even More Evil/Stupid(TM)... I mean, it's their job, I can't believe they would write regulations about something they don't even understand!
      [ Parent ]
    • Re:"didn't realise" (Score:4, Insightful)

      by ShedPlant (1041034) on Monday July 02, @07:22AM (#19715777)
      (http://www.shedplant.net/)
      You're far too quick to predict the demise of one of the biggest, richest and toughest corporate organisations in America. It's very naive.
      [ Parent ]
      • Re:"didn't realise" (Score:4, Insightful)

        by Red Flayer (890720) on Monday July 02, @08:27AM (#19716349)
        (Last Journal: Friday November 10 2006, @02:16PM)
        Sorry to comment on the moderation of the parent post, but I'd say that's hardly flamebait.

        ShedPlant makes a valid point, though it's not to the liking of most people here.

        The record industry is extremely wealthy and has the ear of the extremely powerful. Though it may seem obvious to us that their business model is outdated and is destined to fail, they have the political clout to make sure US legislators prop up their model for a long, long time. They also, via control (or association with those in control) of television media, continue to have the strongest marketing presence.

        It's all fine and dandy to believe that the music industry of the future is just over the horizon, but I don't think it's in the immediate future -- there is simply too much political clout and capital invested in making sure that then status quo is maintained. I think back ten years, and people were saying that by now, we'd already have witnessed the restructuring of the music industry due to technological changes. Ten years from now, I think we'll look back at today, and be saying the same thing.

        This isn't just Monday morning pessimism, the simple truth is that it will be another generation (or two!) before the people who really understand the future of media distribution are in the political power positions necessary to overcome the money being funneled into politics by the media companies. And that's if we're lucky.
        [ Parent ]
      • Re:"didn't realise" by MojoRilla (Score:2) Monday July 02, @10:50AM
      • Re:"didn't realise" by Mister Whirly (Score:2) Monday July 02, @11:13AM
    • Re:"didn't realise" by morgan_greywolf (Score:3) Monday July 02, @07:34AM
    • Re:"didn't realise" (Score:5, Interesting)

      by Opportunist (166417) on Monday July 02, @07:47AM (#19715931)
      I'd hope that you're right. But I don't think the dino wants to die. It will cling to its life with all its might, and the mafiaa has a lot of (financial) muscle. As long as people buy hypecrap, this doesn't change.

      Now, internet radio is dealing a serious blow to the mafiaa. Remember that radio is maybe the most influencial medium when it comes to making some kind of music mainstream. You hear it all the time, so it's gotta be good. It ain't the other way around anymore. It used to be (ok, some 50 years or so ago), that music was good, people liked it, so radio played it to attract listeners. Today, it's reverse. Just like in every other industry. Without real competition, and everyone selling you the same crap, you have no choice but to accept the crap and choose from different equally crappy products. Thus it doesn't hurt a radio station to spew hypecrap instead of playing music.

      Internet radio sure hurts this kind of revenue stream. Quite a few internet radio "stations" are ran by people who want to play "their" music. Who have a certain liking and want this to be heard. And they sure as hell won't hype some crap song even for money. If anything, they ridicule it.

      Can you see why the mafiaa isn't really too fond of the idea of internet radio?
      [ Parent ]
    • Re:"didn't realise" by weber (Score:1) Monday July 02, @07:58AM
    • The panel is incompetent (Score:5, Insightful)

      by Overzeetop (214511) on Monday July 02, @08:18AM (#19716253)
      (Last Journal: Thursday December 09 2004, @09:25AM)
      Simply stated, the (three, five?) judge panel setting the ruling should be sacked. It is clear that they have absolutely no business setting royalty payments, as they are entirely ignroant of the underlying industry which they are ruling on. The expert for the stations stated, in effect, this exact outcome and they either didn't understand the technology enough to realize the implications, or were so biased towards one party that they chose to ignore the information. Either way, they should be replaced with members which understand the industry and the conditions present.

      Of course, that won't happen. Incompetence and ignorance are not grounds for removing a judge, and from the prespective of the current administration they played the game very nicely.
      [ Parent ]
    • Re:"didn't realise" by Lumpy (Score:2) Monday July 02, @08:35AM
    • Re:"didn't realise" by janrinok (Score:2) Monday July 02, @08:51AM
  • by ClaraBow (212734) on Monday July 02, @06:25AM (#19715517)

    Whatever they decide on, it will have to happen soon, because the new rates go into effect in 16 days. It'd be a shame to see Pandora, Live365, and other multi-stream webcasters eliminated.

    I love Live365, It would be a same to see them go under. They have an amazing selection of music and for 3.65 a month it is a great bargain.

  • Testing the waters? (Score:5, Interesting)

    by FiniteElementalist (1073824) on Monday July 02, @06:31AM (#19715541)
    I'm curious if part of this back and forth is the recording industry trying to see how hard they can push on internet radio before they push too hard and it backfires. Effectively killing internet radio in the US seems like it would be pretty far beyond that point, as it would be hard for congress to look the other way on that. The temporary deal could then just be to ratchet down the tensions so they can find a more viable way to profit from or inhibit internet once it falls out of public awareness.

    Or it could just be that they are incompetent with dealing with internet distribution of music. That wouldn't be unprecedented.
    • Re:Testing the waters? (Score:4, Interesting)

      Both. The recording industry hates the Internet precisely because it will eventually eliminate their business model. That much is obvious. I don't think it's like the recording industry wants to eliminate the Internet as a means of music distribution -- they just want to slow it down enough until they can ensure that they will continue to be a relevant part of music distribution.

      In the end, I don't think they will ... the tide's already turned against them. But watching the show of them going down is going to be spectacular.
      [ Parent ]
    • Re:Testing the waters? (Score:4, Insightful)

      by Gorshkov (932507) <<gorshkov> <at> <oghma.on.ca>> on Monday July 02, @08:33AM (#19716397)

      Effectively killing internet radio in the US seems like it would be pretty far beyond that point, as it would be hard for congress to look the other way on that.
      But they won't kill internet radio in the US. They'll kill internet radio BASED in the US.

      Anybody want to rent some of my Canadian bandwidth for streaming to US customers?
      [ Parent ]
    • Re:Testing the waters? by insignificant_wrangl (Score:1) Monday July 02, @10:14AM
  • Just say no. (Score:5, Interesting)

    by WindBourne (631190) on Monday July 02, @06:33AM (#19715549)
    (Last Journal: Friday December 01 2006, @10:51AM)
    These stations need to start up alternate stations that make use of indies. The only reason why soundexchange/riaa is agreeing to this, because they are realizing that they killing the golden goose.
    • Re:Just say no. (Score:4, Interesting)

      by zygotic mitosis (833691) on Monday July 02, @06:44AM (#19715597)
      This is the truth. Besides, we all know that indie bands are better. Who wouldn't prefer Minus the Bear to Fall Out Boy? K-OS to R Kelly? Anything to Nickelback? I hope the industry realizes that the successes of popular bands like Wilco and Pearl Jam as independent artists are not flukes.
      [ Parent ]
    • Re:Just say no. by affliction (Score:1) Monday July 02, @08:14AM
    • Re:Just say no. by AeroIllini (Score:2) Monday July 02, @01:59PM
    • Re:Just say no. by westlake (Score:2) Monday July 02, @04:00PM
  • Heh Heh Heh (Score:3, Interesting)

    by LordPhantom (763327) on Monday July 02, @06:41AM (#19715581)
    FTA: "DiMA would agree to a $2,500 per-service cap for the entire term of the CRB ruling (through 2010), but not the partial-offer presented to us in writing, which would terminate in 2008.

    Why not longer, DiMA? If I were SoundExchange, I'd be amused with this - the longer they can make 2,500 the maximum, the more erosion of actual costs (inflation) will happen. $2,500 isn't what it used to be.
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  • Finland.. (Score:5, Interesting)

    by Anonymous Coward on Monday July 02, @07:08AM (#19715709)
    Around 2000, when net radios were starting to pop up, the finnish equivalent of RIAA killed off all net radio activity in finland exactly the same way.

    Now - last week - they've turned around and are excited to offer this brand new venue for artists to reach their audience!

    It would be interesting to know the details of the new contract..
    • Re:Finland.. by Spliffster (Score:2) Monday July 02, @08:44AM
      • Re:Finland.. by RincewindTVD (Score:1) Monday July 02, @06:04PM
  • Let internet radio die (Score:5, Insightful)

    by 0xdeadbeef (28836) on Monday July 02, @07:24AM (#19715801)
    (http://slashdot.org/ | Last Journal: Friday November 23 2001, @04:14PM)
    We should be helping the music cartels kill themselves, not trying to convince them of the stupidity of their actions. And I would rather my beloved internet radio stations go out as martyrs than forever hear them begging me for donations that will just end up going to the RIAA mobsters.
  • Why SoundExchange? (Score:4, Interesting)

    by EPAstor (933084) on Monday July 02, @07:30AM (#19715823)
    Does anyone have any information as to what part of the law empowers SoundExchange to collect royalties for artists who do not have an explicit agreement with them? Personally, this is starting to seem like the most worrying thing about the state of US copyright, given how many ties I've heard cited between SoundExchange and the music distribution companies. It seems strange that this organization is allowed to collect on other people's work, especially since I've been given to understand that SoundExchange will not pay out royalties to the artist unless the artist in turn pays for a SoundExchange membership...
  • "it would agree to this" (Score:3, Informative)

    by Live_in_Dayton (805960) on Monday July 02, @07:50AM (#19715961)
    Warning, I got a really disgusting NSFW picture when I clicked on the phrase "it would agree to this". I would advise that the link be deactivated.
  • NSFW GOATSE (Score:5, Informative)

    by casings (257363) * on Monday July 02, @07:55AM (#19716003)
    GOATSE ALERT!!!!!

    Don't click the "it would agree to this link" it has either been hacked or the picture redirected to goatse!

    Warning!!!!!!
  • Fight the Music police! (Score:2, Informative)

    by johnarama (1076177) on Monday July 02, @07:59AM (#19716055)
    I don't like this idea of royalties. Radio (online or off) PROMOTES music, so that listeners are able to decide what they want to BUY! Music fans have a new option for hearing and sharing music, there's encrypted file sharing apps, such as GigaTribe ( http://www.gigatribe.com/ [gigatribe.com] ), that let people share music without big brother looking over their shoulder.
  • by Ramona_Little (1085477) on Monday July 02, @09:03AM (#19716759)

    It says "The Copyright Royalty that set the new online radio royalty rates . . ." but should probably say "The Copyright Royalty Board that set the new online radio royalty rates . . ."

    These are the entities formerly known as Copyright Arbitration Royalty Panels ("CARP"). True story: these were (very briefly) known as Copyright Royalty Arbitration Panels (which makes more sense, actually), but no one wanted to serve on a CRAP panel so they had to change the name.

  • "non profit broadcaster?" (Score:2, Troll)

    by mumblestheclown (569987) on Monday July 02, @09:12AM (#19716895)
    If you want to broadcast not-for-profit, i don't see any reason why rightsholders should have to subsidize your fantasy by giving you a lower rate. Can somebody who disagrees with me tell me why, exactly, they believe that I am wrong? I really see no other way around it. We don't insist that PBS be allowed to rebroadcast monday night football simply because it's not for profit. Why should some webcaster, no matter what his scale, be allowed to suck away listeners from people who pay a market value for the content if it's the *same* content, if not even better since we can assume that it would be without or with fewer ads?
  • 2 replies beneath your current threshold.