Net Radio Wins Partial Reprieve

Joren writes "Just a few hours after our last discussion on this topic, Wired News is reporting that Internet radio broadcasters have won a temporary reprieve from the new rates. Apparently the details are still being worked out. 'A coalition of webcasters have worked out a deal with the recording industry that could temporarily stave off a portion of crippling net radio royalties set to take effect Sunday, according to people familiar with the negotiations ... For now, the parties involved in what's described as ongoing negotiations have agreed to waive at least temporarily the minimum charge of $6,000 per channel required under a scheme created by the Copyright Royalty Board, or CRB. The deal, brokered late Thursday, is not final and could change. One person involved in the talks described the situation as a reprieve, and said that internet radio won't be saved until a workable royalty rate is set.'"

Would you really trust the Recording Industry

to maintain a 'temporary' reprieve?

This isn't a reprive-its a feint

This "reprieve" is just an attempt by the RIAA controlled Sound Exchange to stave off legislation that would return the royalty rates to a sane number. Once the momentum for the legislation wanes, Sound Exchange can crank the fees back up without worrying that Congress will have the fortitude to try legislation again.

Re:This isn't a reprive-its a feint

That is possible - the other possibility I see is that these wanks are using oil company tactics: Crank the prices sky-high, let everyone get scared and angry, then back off 9/10 of the original increase. The consumers and stations feel as if they've won and that their activism has made a difference, but really they've just bent over a little further.

No, it's subtrifuge.

This is a blatant attempt to quash the issue through confusion. Most people don't know about the Copyright Review Board or what a bad deal it's just created for everyone. What they are hearing is a mixed signal. What people need to hear is, "Streaming music from your computer is about to be expensive and/or illegal for the benefit of big publishers." Corporate media, even Slashdot, are blaring out "Internet Radio Royalty Hikes Delayed" as if the RIAA had force of law and this temporary reprieve had any meaning.

They might as well have that. The whole thing is so unAmerican, most have a hard time believing it when they do learn. That a group of unelected could make such a fundamental decision boggles the mind. How is it that legislation has to be passed to keep an arm of government from creating an all encompassing monster like SoundExchange?

The end game is the destruction of Internet Radio and the internet itself. They want to go back to 1911 where you and me were not part of popular culture.

Re:

One thing I haven't heard is what the indie labels are doing. I listen to Radio Paradise a lot, and with the Dashboard Widget in the corner of my screen, I often click to find more information about the tracks I am currently listening to. All of the ones I've liked enough to look up have, so far, been from indie labels.

As I recall, the SoundExchange system means you have to only pay royalties to SoundExchange if you play any music that you don't have a separate license for. If the indie labels, en blo

no surprise there

This really shouldn't come as a surprise to anyone. If the "axe" as we're calling it is so close, then these companies are really going to need time to adjust accordingly. Those who can't afford to play ball with the RIAA are going to start looking at their other options (if they haven't already done so!), such as memberships, commercial partnerships, etc.

I can actually see this dragging out longer. Can you imagine the amount of paperwork they're burried in?

The goal IS to eliminate internet radio

Now that Congress is interested, stalling until it is out of session is as much of a "reprieve" as we are going to get. The entire goal is to permanently quash alternative music distribution forms and independent labels through a two-pronged attack, this just being one of them, the right to now collect royalties on all NON-RIAA music being the other(which allows them to control access and distribution of it same as they are doing to internet radio). This while they exert more control on real radio and other traditional distribution channels eventually gives them an actual, not just virtual, control of all music period. The entire goal is to kill all non-RIAA controlled access to music. When there is no other alternative, no matter how bad their products or stupid the pricing, it will be RIAA supplied crap or silence.

Adversity Leads to Innovation

SoundExchange may force internet radio as we know it off the air, but it will swiftly be replaced by a system that does not pay royalties. I am speaking of course of overseas broadcasting, and P2P radio networks.

Consumers want to hear streaming music on the internet without annoying commercials. If there exists no legal, cost-effective way to do it, then the black market will find a way. It's time for the industry to wake up and realize that alienating the consumer base does not equal more profits.

Re:

"Consumers want to hear streaming music on the internet without annoying commercials."

Consumers want stuff for free. That does not justify any means of getting it.

If you want to try to stop the RIAA from silencing non-RIAA music, that is great. But once you tie it to rationalizing copyright violation, nobody will take you seriously.

Re:

It is true that there is no free lunch, but it is also true that consumers prefer their lunches prepared in a certain way. The RIAA continues to ignore what the customers want, which ultimately leads to customer dissatisfaction and fewer profits.

Raising the rates of internet streams above that of traditional radio in order to change consumer habits will not work. My point is that by ignoring what the customers want, the RIAA is in effect creating another Napster. This is almost just like the way the music i

the EFF or such...

the EFF or such could/should help set up a coalition of independent artists, one that had an exceptionally small fee to sign up ($10 or so - enough to prevent people from spamming the records, but little enough to not be prohibitive to real artists), and then any internet radio stations could play any of those songs. If small-time artists actually had a choice, then hey. If artists agreed to allow their songs to be played for free (even if just for a set amount of time), then net radio stations could register with the service (for a fee that is actually low, like $20 or so) and hey...they have the license covered.

hell, I'd almost like to start some such thing myself. Might be more effective if I just give someone else money to do it though. There's certainly enough people who want such a thing...there's a market for it (if even just 1% of the anti-RIAA chickenhawks on /. actually donated to it, it would be viable).

And as someone who has played in clubs for years because I love playing, and has turned down a couple contracts because I didn't want that sort of life - yes, damnit, there are musicians that would give their songs away for free, or close to free. That's precisely what happened to almost all music for the history of mankind until just a few decades ago.

They're just wearing us down

This is just a stall tactic. There will be several more edge-of-the-brink reprieves until the congress/general public are totally confused and the regular new outlets stop reporting. Then it will be as if millions of voices suddenly cried out in terror and were suddenly silenced, but only one person will have heard it.

Blood from a stone?

Correct me if I'm wrong but it doesn't look like there is a lot of money in Internet Radio. So stations couldn't pay if they wanted to and if internet radio is effectively shutdown it would be a net loss for everyone artists, distributors, stations and listeners. So to me it looks like the only alternative is for internet radio to become very similar to FM radio (lots of ads) and fees paid.

A stupid law is a stupid law

I don't get why are they trying to bend over. There are plenty of ways to go on about this, like not paying any fees, protests, or just really going dark and see what effect that has.

Why not just..

Why don't they just play music that the RIAA group of companies doesn't own.

Let them know their artists aren't so special and that even without them we'll get along with our music needs just fine.

Sure probably every one likes at least one artist they've got their stupid hands on, but there's tons of other people who have nothing to do with the RIAA waiting to take their place.

Acting like we need them is what gives them any power at all. If I make a radio station of a bunch of local bands, surel

Re:

Because what Congress and the CRB (Copyright Royalty Board) set up was a compulsory license, which means that SoundExchange represents and collects money for ALL artists/labels, regardless.

You have to pay SoundExchange a yearly membership as an artist/label to receive money they do collect and they don't say what they do with the money they collect for artists that have no label and dont sign up for membership, apparently this is free money for their coffers.

Why a rate at all?

I thought the RIAA received all of the money from record and online sales, plus merchandise etc. I was under the impression that old-school radio was actually PAID money to play songs every hour and received free music. Why would online be any different?

After all it's just free advertising for them.

US only

I think what many forget here is that while this may shut down people running internet radio from US servers and domain names, it is only a question of time for a foreign supply to take advantage of any vacuum that may result if the us pulls the plug. So rather than shutting down internet radio, this whole circus will move it abroad. The RIAA won't win, artists won't win, customers won't win and America won't win. Foreign ISPs will however win and the US will become a little less competitive on the global market. In short, the more the RIAA tightens their grip, the more will slip through to abroad where laws are different. In the long run this might just be what causes the RIAA's downfall. By crippling the American music industry they pave the way for competitors to take their place.

What is the big deal?

I must confess I watch this issue with all the interest of grass growing.

This whole thing boils down to two interacting business groups, each of whom wants to maximize their profits. The music industry would like to be paid a massive amount of money in royalties. Clearly that isn't going to happen. The broadcasters would like to have zero royalties, or better yet be paid by the RIAA for playing the music. That's not going to happen either.

While the RIAA has temporary gotten a high royalty rate, the broa

Re:SoundExchange changed its mind?

This is a delaying tactic until Congress is out of session. Just keep in mind that their real goal is to accomplish exactly what is feared - eliminating internet radio. While Congress is in session, there is a chance they will intervene. Wait a few weeks, the reprieve will be over, bills will go out, then it's "lights out" and Congress will be too busy pocketing contributions from the folks back home to notice.

Re:SoundExchange changed its mind?

Perhaps, alternatively, they aren't trying to shut it down, but they are trying to extract maximum profits out of it. They must know, at a certain level, that internet radio is good for them.

Instead, they are using what I have heard called the "Soviet negotiation model," in which you make an unreasonable first demand; Then it seems a lot more reasonable when you lower it a little. It works quite well, especially when you have the upperhand to begin with.

When soundexchange halves their demands, they'll look like heroes to congress and the public, and still be making a lot more money. Genius...

Net radio will just offshore.

Granted some businesses will fail but in the end the record companies will learn yet again that they are SOL.

The record companies only think they have an upper hand. They'll be broke soon enough.

Re:

"They must know, at a certain level, that internet radio is good for them."

Really? heard a saying a numbetr of years ago, which I shall paraphrase: "Never underestimate the power of a human being to stare at reality full on and yet still ignore it". I dont' believe for one minute that the people who pull the strings for SoundExchange see the internet as anything but a threat, which they either need to eliminate or control. The reality of internet music distribution may have been explained to them ad nau

Re:

This is all business. Maybe it's time to stop looking at either side as evil or stupid and simply consider the upsides of any potential outcomes.

First, consider SoundExchange's (SE) position. They represent the mainstream creators (MSC). Now while there are many layers between SE and the MSC, ultimately SE does represent the MSC. Their concern with the streaming is that they consider it an easy way for listeners to capture, digitally, the audio that is being streamed. It can then easily be moved onto a dig

Re:Respones:

Once again, I am happy that it was free for as long as it was.

Free to you maybe, but the internet radio stations have always payed a licensing fee. The big change here is that in the past internet radio had the same basic fee structure as a traditional broadcast radio station, in which the station paid a flat rate for a blanket license to play music from the RIAA's catalog (don't remember, but I think it may have been a small per song charge). The change is that they want to go to a payment system that charges not only per song, but per listener, which will grossly inflate the fees these stations will need to pay. Never mind the technical feasibility of tracking the number of unique listeners to any given station, but simply multiplying the .8 cent fee per song by even a thousand listeners brings the cost per song to 8 dollars, and there's no way these small broadcasters can recoup that cost in advertising fees. The RIAA actually knows this, but they don't care, they want control of the whole thing, so they've set it up where only a few companies can actually afford to provide internet radio, and they're just fine with that, less chance for anyone not already under the RIAA's thumb to get any sort of air time.