The Copyright Review Board dealt a serious blow to Internet Radio today, when it denied a request to reconsider its March ruling that would greatly increase fees broadcasters pay to copyright holders. The original ruling called for a serious escalation of fees, to the point where most small, medium, and even large Internet radio broadcasters would not be able to afford to continue broadcasting.
Most Internet radio experts I talked to back in March believed that this initial ruling was just a starting point--that sure, the CRB had basically adopted a fee structure proposed by SoundExchange (a.k.a. the people who would be collecting the fees), and that while that was unfortunate, things would work themselves out in the appeal process. This wasn't the first time Internet Radio had been declared dead, and this type of "negotiation" was just part of the process.
Maybe not, though. Today's decision means that process will take a lot longer, if it happens at all. According to the Radio and Internet Newsletter, the final decision must be published in the Federal Register within 60 days, at which point it can be appealed to the U.S. Court of Appeals in D.C.
And here's one of the fun parts: The new royalty rate applies retroactively to 2006 broadcasts. Any stations that can't cover the new rate are already in the hole, and assuming that a similar rate eventually holds up, the longer they continue to broadcast, the deeper the hole gets. Yeah. Not good times.
While broadcasters form groups like SaveNetRadio and the appeal process gets under way, I'm left with more questions than answers. Internet radio and sites like Pandora and Last.fm have become popular, useful tools for finding new music. So why are SoundExchange and the RIAA pushing for a structure that would shut them down?
Net radio stations are barely solvent as it is, so I can't imagine how this would be a negotiating tactic to get more money out of them. Seriously, what's the endgame here? Are they trying to force broadcasters to band together and negotiate their own license agreements in groups? Is that added degree of control actually worth the effort?
And apparently Last.fm broadcasts out of England, so this decision doesn't effect them. So maybe net radio stations will all move offshore. But what determines where a broadcast occurs? If songs get Akamized to servers in the States, does that count?
Honestly, though, it's almost pointless to try answering these questions. Any deduction you can do begins by assuming the music industry is acting rationally, and that hasn't held true since it figured out that people could rip CDs.
idiots. the FREE internet is the only future for musicians past and present. old inactive acts should get a fee, related to a ratio of internet audio listenership% vs. radio listenership% vs. video viewership%, divided by standard billing rates.
current acts, which have the potential to earn way more $$$$, should have to make up the income shortfall lost to free internet more or less with increased ticket prices to LIVE shows- and people will ALWAYS PAY MORE $$$ to see their fave bands.
This is just another attempt for the big media mafia to control the airwaves and cram their shit music down our throats. I don't buy most music these days, because it's such BS. Internet radio at least afforded me the opportunity to listen to something other than what Clear Channel wanted me to hear. They can take their untalented hack artists and shove 'em where the sun don't shine. I'll find other ways of listening to better music.
Seems to me that if bands post songs with a free use sort of copyright that these songs would not fall under the new fee structure. So established bands may drop a few crumbs to listeners while new bands would likely put out a lot more music for free listening. This could get allot more bands internet airplay than ever before. People will listen to what is on, and people like to listen to free music from the internet. So if this pay structure stays in place people will just have to listen to bands with free songs. Or listen to off shore stations, or just download the mp3's illegally.
SoundExchange may be trying to make a quick windfall off this ruling, but likely the goal is to restrict the growth of internet radio. I would be interested to know their ties to traditional music distribution businesses, those currently loosing customers to the less homogeneous internet music sources.
TJW