Next week I’ll travel to Washington D.C. to meet with my congressman and senators in an effort to Save Internet Radio.
I will be working with the SaveNetRadio Coalition to make sure our already limited music choices don’t dwindle even further. On May 2, 2007, the Copyright Royalty Board (CRB) dramatically increased the amount of royalties that Internet radio services must pay record labels and recording artists.
Now, I’m sure you’re wondering why I would be concerned that the government is telling the Internet radio stations who have been playing my music that they should pay me more money.
The reality is that the major record labels and their royalty collecting agency, Sound Exchange, convinced the CRB to increase royalty rates by 300-1200%. This will increase broadcasting bills for net radio broadcasters to levels that will put many of them out of business. The Internet radio broadcasters who have supported artists like me would be eliminated by the major corporations who have lost their monopoly on the distribution and promotion of music largely because of the freedom of the Internet.
Bay area commentator Davey D cites the following examples of the effect this will have on Net Radio:
Just to give you an idea of how that looks, locally based Soma FM in a recent Eastbay Express article explained that they had an annual webcasting bill for 10 thousand dollars. Under the new rates they would immediately owe 600 thousand dollars. I spoke with owner Rusty Hodge who noted that the high rates are the result of him having lots of people who listen for long periods of time. He also noted that if he manages to stay afloat in 2007 he will owe the labels over one million dollars.
The largest Internet Radio company Live 365-also locally based explained to the Washington Post that their annual 1.5 million dollar bill would increase to 6 or 7 million and bankrupt the company.
What makes this new ruling even more insidious is that all webcasters no matter how big or small would be required to pay 500 bucks annually on top of the increased rates, meanwhile commercial broadcasters who have in recent months been aggressively pushing their own online stations and HD broadcasts along with satellite radio would NOT be paying these increased rates.
Where would this leave us? If the increased royalty rates are allowed to go into effect in July it would put largely independent Internet radio into the hands of the same commercial broadcasters who already refuse to play independent artists unless they are placed in a head lock by regulators.
If this rate increase goes through, the currently diverse and expansive Internet radio landscape could end up sounding like the barren wasteland that is modern commercial radio. Consumers would be left with fewer choices, and fewer places to hear new music.
What can you do to help?
Everybody: Two bipartisan bills are being pushed in Congress, HR 2060 in the House and in the Senate S1353, the Internet Radio Equality Act, in an effort to change the law before the new royalty rates go into effect on July 15. Call or write your congress member and ask them to support it. Click HERE for more information.
Musicians/Artists: You can join the SaveNetRadio Coalition. Click HERE to find out how you can help.
Detroit Area Artists: The SaveNetRadio Coalition is making a special effort to lobby Detroit Congressman John Conyers.
Click HERE to download a letter from Detroit musical performers to Rep. John Conyers.
When you sign the letter include your
You can send the letter by email to: John.Conyers@mail.house.gov
International Artists and Listeners: If you listen to Internet radio or if you promote your music on Internet radio, this act will affect you as well. Let your voice be heard! Click HERE to find out how.
Now is the time to act. In just a few short weeks, the many choices that we have grown accustomed to with the power of the Internet may be eroded if you don’t do something to stop it. Independent artists could have a very important marketing and promotional avenue erased.
Nadir, I have read these articles and spoken with you, but still find this topic confusing. Please correct or confirm my understanding:
A single private company is collecting internet royalties for all songs. A federal government agency sets the royalty rate, which is the same for all songs. Record label executives are asking the government agency to raise this royalty rate substantially. The current rate is modest enough that many people can run internet radio stations and play music of interest to only a small audience. The proposed rate hike would be so high that internet stations could afford to operate only if they attracted mass audiences, which would mean dropping small-audience artists, or folding up shop.
Major record labels would like this because they would get more money for their Britney Spears and Nelly products, and would not care if people like Nadir got dropped because they make little or no money off of people who can play instruments, sing, compose music, orchestrate a band, and write lyrics. Also, with fewer or no options to consume non-commercial music, fewer people will be attracted away from the corporate stations.
The record labels should work out a way to designate artists for higher royalties based on whatever criteria they like, based on agreement with the artists, and leave the current rate as a baseline. Thus stations could pay $0.10 to play Nadir’s “Slave” and *1.00 to play the Beatles “Love Me Do”… until such a time as Nadir agrees to a higher royalty rate.
To the extent that I understand this issue correctly, I support Nadir’s efforts to block the proposed accross-the-board royalty increase. And of course I have suggestions:
1. Nadir’s group should include a proposed alternative to enable the big evil labels to make more money off of Beyonce and Dolly Parton. Simply proposing a rejection of the the proposed hike I reckon will get far less support than if you propose an alternative that serves the needs of both small audience artists and the big boys. If you propose leaving the current rate as the default, with a mechanism for applying premiums to big hit songs, you portray yourself as the only party in the dispute you is looking out for the interests of each party. As far as I can tell, the bastards want more money at your expense, and you want more money at their expense; why not propose letting both sides have their way (though we believe that secretly the bastards want to crush you guys, they can’t say that out loud in the debate).
2. The real solution is to get government regulation out of this, except to enforce contracts freely entered by all parties. In any market subject to government regulations, some party can get enough money to purchase an unfair advantage. Trying to purchase or sell a house without a real estate agent, or to get into the taxi cab business, are two of infinite examples where government regulation has naturally drifted into tax-sponsored protection of monopolies.
“1. Nadir’s group should include a proposed alternative to enable the big evil labels to make more money off of Beyonce and Dolly Parton. Simply proposing a rejection of the the proposed hike I reckon will get far less support than if you propose an alternative that serves the needs of both small audience artists and the big boys.”
The Internet Radio Equality Act proposes alternatives in the following ways:
1) The act proposes a fee of not more than $500 per provider vs. the CRB mandated $500 per station. (Some providers have thousands of stations or channels).
2) The act proposes a royalty of either .33 cents per hour of sound recordings transmitted per user or 7.5% of revenues annually, which is the same rate paid by satellite radio.
“2. The real solution is to get government regulation out of this, except to enforce contracts freely entered by all parties. In any market subject to government regulations, some party can get enough money to purchase an unfair advantage.”
Well, first things first.
Nadir: Does y’all’s proposal enable the big labels to get big bucks for Nelly, the Beatles, etc., while charging less for acts like yours?