Friday, July 13, 2007

Saving Internet Radio.
On March 2, 2007 the Copyright Royalty Board (CRB), which oversees sound recording royalties paid by Internet(IR) Radio services, increased IR's royalty burden between 300 and 1200 percent. IR royalties were already double what satellite radio pays: the 2005 royalty rate was 7/100 of a penny per song streamed; the 2010 rate will be 19/100 of a penny per song streamed. In particular, the agreement by which small-scale webcasters who had paid royalties as a fraction of revenue was abolished, and royalties will be paid on a per listener (stream) basis-per song basis. No such "per listener" charge is applied to over-the-air performances, nor for satellite broadcasting. These payments would also be applied retroactively to January 2006.
Now, is this the market in fair play? Well, artists are entitled to fair compensation for the performance of their work, and is the availability of on-demand entertainment is not a civil right. If these are the arguements, then there should be a uniform rate for recorded performances, be they played by broadcast radio, satellite radio, or IR. IR stream capture is thievery and threatens fair compensation, but then so does HD radio or any diversion of speaker output from any radio to an A/D recorder. The lopsidedness of the rate schedule against IR strongly suggests that the goal of the high rate is to kill it off, or to reduce its participation to very large scale entities that would allow the recording industry some control over their playlists. And that may zero out the royalty compensation for many small label artists that do not get air or satellite playtime. The impact goes beyond indie and small label artists. Any artist or performance that does not pass the profit-metric threshold for commerical broadcast radio, or is considered too small of a market for "push" by the recording industry, will not be heard. There is other fallout such as the narrowing of playlists for a given artist - the repetition of one or two tracks from a given album (ah, to hear all of "Wish You Were Here". Those were the days!). These efforts reduce both choice for listeners and opportunity for artists.
On the July 15th the first royalty payments (including retroactive charges) were to be made to SoundExchange (the collection agency for the recording industry). This has now been postponed while negotiations continue.

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