Once Again Corporate Amerika Tries To Shut Down Freedom

The following posting was made by my friend Scott (from Wyoming) Larson.

He says in much clearer terms what is in my mind right now. Please read.

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The Copyright Royalties Board has issued a ruling that will instantly kill most internet music webcasts: College Radio stations, everything on Shoutcast.com, and my personal favorite, RadioParadise.com. Also at risk are individualized webcasters such as Last.FM and Pandora.com. If you are among the millions who listen to internet radio and cherish the variety available, be aware that this decision does not require the approval of congress—it's a sordid tale but it's important to raise a cry right now. Tell your friends, contact news outlets and do what you can to generate awareness that once again big business has stuck it to the customer. The following quotes can tell it better than I can.

Kurt Hanson of RAIN wrote: http://kurthanson.com/archive/news/030207/index.shtml

The Copyright Royalty Board (CRB) has announced its decision on Internet radio royalty rates, rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange.

RAIN has learned the rates that the Board has decided on, effective retroactively through the beginning of 2006. They are as follows:

2006 - $.0008 per play
2007 - $.0011 per play
2008 - $.0014 per play
2009 - $.0018 per play
2010 - $.0019 per play

RAIN ANALYSIS: In 2006, a well-run Internet radio station might have been able to sell two radio spots an hour at a $3 net CPM (cost-per-thousand), which would add up to .6 cents per listener-hour. Even adding in ancillary revenues from occasional video gateway ads, banner ads on the website, and so forth, total revenues per listener-hour would only be in the 1.0 to 1.2 cents per listener-hour range.

That math suggests that the royalty rate decision -- for the performance alone, not even including composers' royalties! -- is in the in the ballpark of 100% or more of total revenues. (KH)

Bill Goldsmith of RadioParadise wrote:
There's a lot of talk going on in webcasting circles about what constitutes a fair performance royalty rate for Internet radio. I have a radical suggestion: how about the same amount paid by FM stations? In other words - at this point - nothing. Why do we pay these royalties when FM stations don't? Because we're providing "perfect digital copies" of individual songs to our listeners, rather than engaging in the creation of traditional radio programming. The fact that this reasoning, which is the foundation of the differentiation between analog & digital broadcasting in the DMCA, is *just not true* is rarely discussed.

When I share with my listeners the discrepancy between what we pay in performance royalties & what an FM station pays ($0) they are flabbergasted and outraged. These are people who *know* that listening to Radio Paradise is no different from listening to an FM station (except for better programming Smile and the idea that we're fundamentally different because we transmit digitally seems absurd. It seems absurd because it *is* absurd - and every time the issue comes up, my blood pressure rises all over again.

While it is possible to "rip" a radio stream into individual songs, you can do the same thing - with little more effort, and with similar results in terms of audio quality - with an analog FM broadcast. If you were to take a random sampling of, say, RIAA attorneys (or Senators) and play them a song copied from my webcast and the same song copied from an analog FM station, I doubt that they'd be able to tell the difference.

Based on the feedback I get from my listeners, only a very small percentage ever record our station for any reason, and most of them are recording blocks of programming for playback during commute times or in other situations where they don't have access to the net. The vast majority of them just turn the station on and listen, just as they would do with an FM broadcast. No wonder they are astounded to find out that Congress - under the careful guidance of the RIAA - decided back in 1998 that we were an entirely different type of service that needed to play (and pay) by an entirely different set of rules.

Is it fair that FM broadcasters pay nothing to the owners of performance copyrights? Perhaps not. In most countries, they *do* pay. But is it fair for the recording industry to try to right this supposed wrong in such a manner that it drives law-abiding business people such as myself and the other independent webcasters out of business? I think not. Perhaps the most fair solution of all would be a significantly smaller royalty (something comparable to the 3.5% or so that both webcasters and broadcasters pay to songwriters) applied to *all* forms of radio.