|Important Update: A bill has been introduced in Congress which would help save Internet radio from the royalty rates recently announced by the US Copyright office. HR 2060 would set the royalty rates for Internet radio to the same, much more reasonable level that currently applies to satellite radio. Please telephone your Representative's office and ask that he or she please co-sponsor HR 2060. You can look up the phone number of your Congressperson by clicking here. Please act immediately because the new royalty rates go into effect on May 15 which would cause thousands of webcasters to cease operations. You can access a .pdf file of the actual bill here.|
|On March 2, 2007 the Copyright Royalty Board of the Library of Congress
announced the new royalty rates that all Internet broadcasters must pay
to SoundExchange through the year 2010 in order to legally play copyright
sound recordings. Traditional AM/FM broadcasters, by the way,
are exempt from having to pay such royalties.
For even the most successful and profitable webcasters, these new royalty rates would consume 125 percent or more of the webcasters' current revenue. The new royalty rates also eliminate the Small Webcasters Settlement Act provisions that Congress put in place several years ago to address the fact that the old royalty rate structure would have otherwise forced small webcasters to cease operations.
This is a very grave situation. If changes are not quickly made to the new rate structure, it is very likely that most webcasters, including Radio Dismuke's service providers Live 365 and LoudCity will be forced into bankruptcy and have to suspend their operations.
If Internet radio, along with the endless variety of musical programing it provides that was not previously available, is to survive WEBCASTERS NEED YOUR HELP.
If you would like more information about the issue facing Internet radio, you can start with the article I have written and posted below.
I have also started a Radio Dismuke - Save Internet Radio Blog where I will try to keep my audience updated with news, analysis and commentary on the evolving situation as well as occasional calls to action when they become necessary. I have already posted several articles that examine in some depth what is happening and the impact it will have. If you are concerned about this issue, I suggest that you check the blog on a regular basis for updates.
You can also sign up for my mailing list by going here.
I only send out infrequent emails to the list announcing major programming
events. However, during the weeks ahead, should there be any major
call to action necessary or should the situation have an impact on your
ability to tune into Radio Dismuke, I will send out notifications to the
HOW YOU CAN HELP
1) Write Or Phone Your Elected Representatives The single most important thing you can do right now if you live in the United States is write your elected representatives in Congress and let them know you are extremely concerned about this situation. The last time this happened a few years ago, what saved Internet radio from an early death at that time was a public outcry that pressured Congress into taking action. I am afraid that the only thing that can save Internet radio this time is if there is an even larger and louder public outcry.
Writing to your elected representatives is easy and will take less than two minutes of your time. Simply go to http://www.savethestreams.org/ and follow the links for sending a message. You do not even need to know the name of your elected representatives - if you enter in your zip code, the website will look that information up for you. For your convenience, a letter has already been written up that you can use. Or if you prefer, you can write something of your own. Understand that most people in Congress do not have enough hours in the day to read all of the mail that they receive. Chances are your message will be read by a staff member who will be keeping a scorecard of what issues constituents are writing in about. In this case, how you word your point is not as important as your simply going on the record as being in support of Internet radio. To survive this, Internet radio needs a lot of people to write in.
2) Tell Everyone What Is Going On The other important thing you can do to help is SPEAK OUT. Send an email to all of your friends - especially those who are passionate about music - letting them know what is going on and what is at stake. This does not have to be directed only at those who enjoy "our kind of music." There are a lot of people out there who are fans of genres such as rock or rap who turn to Internet radio because they, too, are tired of the lowest common denominator type programing that dominates AM/FM radio. If you participate in Internet message boards, write about the issue there and let people know what is going on. If you have a website or a blog, write about it there. If you work in the news media or have any other form of widespread public voice and value the listening options that can only be found on Internet radio, please speak out on behalf of all of the many webcasters and music fans who lack such a voice. Whether your circle of influence is small or large, SPEAK OUT.
If you ever have found value in Radio Dismuke and the music that I feature, I am asking you - no, I am begging you - to please join me in my battle to save my ability to present this wonderful music to new audiences and to an ever increasing number of fans throughout the world.
I am going to give this battle everything I have both financially and
in terms of my time and energy. I need you help - and right
now the best help you can give me is to speak up to anyone and everyone
who is willing to listen.
SAVE INTERNET RADIO
Your ability to enjoy the vintage 1920s and 1930s recordings on Radio Dismuke and other Internet radio stations along with your ability to enjoy the virtually unlimited variety of genres that can only be found on Internet radio is in grave jeopardy.
On March 2, the U.S. Copyright Office released the new royalty rates that all Internet radio stations are required to pay to SoundExchange in order to legally play copyright records and CDs. These royalties are paid on top of the royalties that stations already pay to other organizations such as ASCAP, BMI and SESAC. AM and FM radio stations, by the way, are exempt from having to pay SoundExchange royalties for their over-the-air broadcasts.
The new royalty rates, pushed through by lawyers for the RIAA (the trade organization for the major record labels), if allowed to stand, will immediately kill off the emerging Internet radio industry. For even the most profitable and commercially viable Internet radio stations, the cost of these new royalty rates would be in excess of 125% of ALL total revenue that such stations currently bring in.
According to Joe Kennedy, the CEO of Pandora, one of the larger Internet radio networks: "I'm not aware of any Internet radio service that believes they can sustain a business at the rates set by this decision. The only reason the services are not shutting down today is the belief that rationality will ultimately prevail here, either through appeal or Congressional intervention."
As one of the staff members of Live 365 has recently stated: "the new per performance royalty rates for the years from 2006 through 2010 would ....[represent] an increase over the existing rate of 5%, 44%, 84%, 136%, and 149%, respectively, and a year-over-year increase of 5%, 38%, 27%, 29%, and 6%, respectively."
He quotes 2006, by the way, because stations will be required to pay the 2006 rate increase retroactively. This retroactivity, by the way, could force Live 365's most successful broadcasters into personal bankruptcyeven if they closed down their stations today. Most of these broadcasters have are private individuals and hobbyists such as myself and their only crime was to sign a contract with SoundExchange so that they could legally and lawfully share the music they love with others.
If the new rate structure is allowed to stand, it is very likely that Live 365 and LoudCity which currently cover the royalty costs for all Radio Dismuke broadcasts would be forced into bankruptcy and have to shut down.
Why would anyone wish to destroy Internet radio - a medium that makes it possible for people around the world to enjoy genres of music that have been forgotten about and would otherwise not have much of an audience? Well, if Internet radio somehow manages to survive this challenge, many say that we are only a year or two away from the day technology will be able to put Internet radio into people's automobiles. When that happens, people will have thousands of music stations from all over the world to choose from and FM radio will no longer the the dominant medium where most people turn to listen to musical programming.
The possible demise of FM radio as the trendsetting force in popular music represents an even bigger potential threat to the continued viability of the major recording labels then does illegal downloading. Hit recordings are achieved mostly by means of getting airplay on a handful of important FM stations in major metropolitan markets. Such airplay results in sales which, in turn, results in the song getting on the music popularity charts and thereby getting additional airplay on smaller stations. These trendsetting FM stations will rarely give independent record labels and artists who produce their own material the time of day. The major record labels are at an enormous advantage because only they have the vast resources to promote and get themselves in the door at the major FM stations.
If Internet radio takes off and the audience for popular music that is currently concentrated on FM stations is scattered to the wind across thousands and thousands of smaller Internet stations - well, it wouldn't make economic sense for a record label to spend large sums of money to market its artists to a station that only has a relatively small audience. In such a world, the major record labels would have little advantage over independent labels and artists who produce their own material when it comes to marketing themselves and getting a spot on station playlists.
In today's increasingly digital and Internet dominated world, the major record labels are more and more becoming technological dinosaurs - and they are using the vast wealth they have at their disposal as a result of the the economic momentum left over from the days when they actually were relevant to lobby for legislation and royalty rates to kill off an exciting and emerging medium that represents a major challenge to the decades old formula that has kept them alive and in business.
Most webcasters, by the way, do not mind paying royalties and fully recognize the need for artists and labels to be compensated for their creative work and property. But the new SoundExchange royalties are beyond irrational - they are downright insane.
A rational scheme for collecting royalties for recordings would be based on the percentage of revenue model that has been used for decades by ASCAP. BMI and SESAC. Such a model is what webcasters asked for when hearings were conducted on the new rates. Instead, the rates pushed through by the major record labels are collected on a per song, per listener basis.
Under the old rates, the larger commercial webcasters already had to struggle mightily in order to sell enough ads to cover SoundExchange royalties. The new rates are crippling - especially for an emerging medium. And by 2010 they will have gone up by 149%. Yet nobody today in 2007 is in a position to know what the state of the economy will be in 2010. If we end up being in a recession, ad revenues will be the very first thing to dry up and stations would be very hard pressed to sell ads to cover royalties at even the old rates, let alone the 149% increase. And yet the decision by the Copyright Office makes no provision whatsoever for changing marketplace conditions and the fact that advertising rates fluctuate with the economy. Royalty rates charged by ASCAP, BMI and SESAC do take such factors into consideration as they are based on a percentage of revenue and will, therefore, fluctuate with the good times and the bad just like the rest of the economy.
Bottom line, this nothing more but an attempt by the RIAA to nip Internet radio in the bud and kill it off. The RIAA tried to pull a similar stunt a few years ago and failed to completely get away with it because a large public outcry resulted in the proposed rates being lowered somewhat and a provision was made for small Internet broadcasters to pay based on revenue - a provision that has been eliminated under the new rates.
I am afraid that the only chance we have to correct this outrageous injustice is to have another and even louder public outcry. Webcasting is an emerging industry and only a very few stations manage to make a profit. Webcasters cannot match the RIAA when it comes to spending for lawyers, lobbyists and bought-and-paid-for legislation.
For me, what adds insult to injury is the fact that not one single penny that has been spent by Live 365 or LoudCity for SoundExchange royalties on my Radio Dismuke streams has ever gone to the artists that I feature (almost all of whom are dead) or even to their estates. An artist has to collect $10 worth of royalties before SoundExchange will cut them a check - which I have read would require a song to be played something like 14,000 times before the artist's cut of the royalties would reach that minimum threshold. I promise you that none of the artists I feature will ever get that many plays - especially if these royalty rates are allowed to stand and the existing vintage music Internet stations are forced to shut down. In other words, the only artists that would likely see much of anything with regard to royalties are - guess who? That's right, the same major label artists that are currently heard and promoted over FM radio.
If Radio Dismuke and countless other wonderful Internet radio station
are to survive and continue providing you with an endless variety of musical
options, we need your help.
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