Wednesday, June 27, 2007

`Internet Radio Equality Act of 2007'

Here is a hot topic you probably haven't heard much about on the Main Stream Media, and probably won't. It seems that March 2, 2007, a panel of United States Copyright Royalty Judges made a Determination of Rates and Terms for the digital performance of sound recordings and ephemeral recordings (on Internet Radio.) According to Heli's Heaven and Hell Radio the Internet Radio "rates which are scheduled to go into effect on July 15 are based on a per-song per-listener basis and would amount to well over 100 percent of most existing webcasters' annual revenues - and they would be applied RETROACTIVELY back to January 2006." They would also establish a $500 per channel minimum so-called 'administration fee' as part of the new rate structure. In short Internet Radio Services are screaming the new rate structure will put them out of business. A good discussion of the impact of the new rate structure on online radio services is found at V-Gimme Five . Another is found at WWdN:In Excile.

Heli's Heaven smells a RIAA plot:

The new rates are nothing more than a thinly disguised attempt on the part of the RIAA to kill off a rapidly emerging medium which, by bringing the public's attention to an unprecedented range of independent artists and niche genres, threatens the market share the RIAA labels have held for decades. . . .

The major RIAA labels make their money by selling mass market recordings aimed at the widest and lowest common denominator - i.e., the sort of music you will hear on FM radio and find in the limited assortment of CDs available at your local discount retailer. The degree to which audiences discover and become enthusiastic about the wide variety of wonderful artists and music that fall outside of the RIAA labels' lowest common denominator offerings is the degree to which their market falls apart on them. . . .

Internet radio is at the forefront of a wonderful revolution in both how enthusiasts listen to music and how aspiring artists promote themselves. It is bringing about a world where audiences will have endless options to access an unprecedented variety of quality music and where artists - especially those who previously had little hope of getting past the focus groups and 'gatekeepers' at the RIAA labels and FM radio stations - will have new opportunities to make themselves known to new fans and to promote their recordings and live performances. The RIAA does not have any special advantage in such a world and will face new competition from a wide variety of sources, including artists who in an earlier day would have signed with an RIAA label but now realize it is increasingly advantageous to remain independent and thereby retain ownership and control of their music and keep all of the financial rewards for themselves. Therefore, the RIAA has used its political pull in an attempt to kill off the new and increasingly popular industry which is making such a world possible: Internet radio.
The Internet radio services have done what Americans often do when a regulatory agency has ruled against them. They have petitioned Congress to pass a law. Bills repealing the rate schedules are working their way through the House and the Senate right now. The Senate bill is aptly entitled S.1353--A bill to nullify the determinations of the Copyright Royalty Judges with respect to webcasting, to modify the basis for making such a determination, and for other purposes. It is sponsored by Sen. Ron Wyden (D-OR) and co-sponsored by Sen. Sam Brownback (R-KS). The House Bill with the same title is numbered H.R. 2060 and has 100 co-sponsors. Both bills recognize the need for Artists to be paid for their performances. They both adopt the rate structure currently employed by satellite radio.

The proponents are convinced that Internet radio, and with it the future of music, will die if their law isn't passed. My own view is that Internet radio will survive. It will move off shore. A lot of people outside the US will get rich, the US will lose an emerging industry and the RIAA will continue it's steady march to oblivion.

Maybe it is time for the people in Congress to take a longer view than that presented by the establishment guys in suits bearing lobbying money.