Another promising technology shot down to keep the old guard’s money trough safe.
Internet radio dealt severe blow as Copyright Board rejects appeal
A panel of judges at the Copyright Royalty Board has denied a request from the NPR and a number of other webcasters to reconsider a March ruling that would force Internet radio services to pay crippling royalties. The panel’s ruling reaffirmed the original CRB decision in every respect, with the exception of how the royalties will be calculated. Instead of charging a royalty for each time a song is heard by a listener online, Internet broadcasters will be able pay royalties based on average listening hours through the end of 2008.
The ruling is a huge blow to online broadcasters, and the new royalty structure could knock a large number of them off the ‘Net entirely. Under the previous setup, radio stations would have to pay an annual fee plus 12 percent of their profits to the music industry’s royalty collection organization, SoundExchange. It was a good setup for the webcasters, most of whom are either nonprofits or very small organizations.
National Public Radio spearheaded the appeal, arguing that the CRB’s decision was an “abuse of discretion” and saying that the judges did not consider the ramifications of a new royalty structure. Under the new royalty schedule, NPR will see its costs skyrocket.
The judges were unmoved by the webcasters’ arguments. “None of the moving parties have made a sufficient showing of new evidence or clear error or manifest injustice that would warrant rehearing,” wrote the CRB in its decision. “To the contrary… most of the parties’ arguments in support of a rehearing or reconsideration merely restate arguments that were made or evidence that was presented during the proceeding.”
SoundExchange is jubilant over the ruling. Executive Director John Simson called the CRB’s ruling a victory for performing artists and record labels. “Our artists and labels look forward to working with the Internet radio industry—large and small, commercial and noncommercial—so that together we can ensure it succeeds as a place where great music is available to music lovers of all genres,” said Simson in a statement.
Noble words, but after today’s ruling—which will take effect on May 15 unless the US Court of Appeals for the District of Columbia Circuit agrees to hear an appeal—there probably won’t be much of an Internet radio industry left for SoundExchange to work with.
In a case of unfortunate timing, the SaveNetRadio coalition today launched a campaign to save Internet radio. Given the CRB’s decision, it may be too little, too late.
Yay for freedom.
http://www.RadioSkipper.com (nothing on their website about this yet)
Thanks to their 80’s channel, I’ve legally bought over 500$ in the last two years, MP3’s (full albums, compilations, singles) to complete my collection.
Do you think I want to waste my time capturing an audio stream, like some free utilities do, with Start, Rec, Pause, Save, fill in the MP3 tags, start over, etc, etc?
Not when it costs on avg 0.15 per song in 192kps from AllOfMp3.com.
So indirectly, Internet Radio helps the music industry get paid royalties from bought music, and discovery of new talent.
I only listen to the regular radio occasionally to hear news, talk shows, and of course, the comedians Les Grandes Gueules on CKMF Montréal.
Hopefully Internet Radio will continue to exist outside CRB’s reach. I think it’s wonderful – on demand – the style you want – when you want.
Another great reason for creative communications to move to offshore ISP’s. Certainly, our government and their favorite profiteers have no interest in developing homegrown talent in the business side of music and entertainment content.
The RIAA and MPAA own the Washington hacks. Both wings of the United Party of Greed.
Yay, more “one size fits all” bureaucratic goodness from the government.
Another crappy ruling bought and paid for by the riaa/mpaa
It’s a good thing I gave up on Internet Radio along time ago. Now I don’t feel so disappointed.
The internet is an excellent source for good classical music, far surpassing my choices of local radio stations that play classical music. Without this important resource, I might be forced to start hanging out in subway stations 😉
You know, while on one hand I could see the record industry shutting down other Internet broadcasters so they can launch their own I’m cynical enough to believe that they don’t have a rival service and that Internet radio is dead.
Seriously, the RIAA needs to stop this witch hunt. There is no going back to 1992 no matter how much these chuckle heads try.
Great idea’s dont die, they just fade away…
I listen to npr’s webcasts more than I listen to the normal broadcast (and not at all during “pledge-week”) – but thats the extent of my usage…
I wonder if this will prompt prominant webcasting stations to be headquartered or move their operations offshore? After all, America’s laws dont apply outside of the country.
So they are going to wind up getting no royalties because they put all the internet radio stations out of business. But maybe that was their cunning plan all along.
the Content Royalty Board can take my MacPro w/ my 1548 legally purchased songs, 90% of which i purchased after listening to them on internet radio stations SomaFM & Radio Paradise, and shove it up their collective a$$.
pardon me, i’m going to go reinstall Limewire…
“What’s that? People are enjoying something that we’re not making money from? SHUT IT DOWN!”
So now non-US companies will get more listeners. They will get any advertising money. http://www.bbc.co.uk/radio/ will replace NPR for U.S. listeners. Perhaps this will be a good thing for the country as users start hearing things in the perspective of our fellow Earthlings, and not just U.S. corporations.
How does this affect independant artists? Will there be a bigger audience for musicians who are willing to provide their music without going through the royalty clearinghouse? or will the riaa lobby make that illegal.
It reminds me of the Verizon versus Vonage thing.. If vonage goes away, the last thing I will do is use Verizon. The last thing I will listen to on the web is a commercial internet radio station. Sorry. U.S. loses.
Too bad they weren’t more successful. Then they could have hired lawyers to allow them to go out of business at a slower rate.
How do they think are they going to collect higher royalties when the very companies they want to collect from will be put out of business entirely by this decision? Makes absolutely no sense to me. Just another example of the recording industry having no clue about how to properly market and sell their product. How am I supposed to learn about new artists and buy their music when I am prevented from hearing them to begin with?
Short of a miracle from Congress overturning their idiotic law putting the power to decide royalties in CRB hands to begin with and requiring the per listener performance structure, Internet Radio as we know it could be dead on May 15th.
The problem with foreign streaming is new international agreements can prevent streaming to the US. I found this out the hard way as BBC1 (the British Hits Channel) is now blocked in the US, and are using DRM protected feeds now too. Many other foreign stations will probably be forced to do the same.
That leaves independent only and law defying pirate stations and talk radio stations.
Also to say this only effects internet radio is being very short sighted as well. ISPs will suffer as a primary reason for broadband gets taken away. So will virtual worlds like There and Second Life, both of who provide in game access to streaming radio. Home products and wireless hand held products that use streaming radio will lose customers. The potential merger between Sirius and XFM will be dealt a blow as their biggest anti-trust argument goes up in flames. Local radio stations will have to shut down streams too, and I live too close to the mountains to pick up some stations the usual way.
The internet radio industry may not have the political muscle to fight this, but the telco’s like AT&T and Verizon do, but they seem to not notice how potentially big the loss of internet radio could affect their own businesses.
Your legal system is such a joke you may as well all move to China. At least they are open about screwing all their citizens. Europe has plenty of good radio stations but no guns allowed thanks.
Looks like Mark Cuban got out at exactly the right time. I’ll bet the fines he pays to the NBA are way less than what this garbage royalty structure would demand.
Is it just me, or is the RIAA / MPAA really trying to kill all entertainment? What a bunch of geniuses…
Oh stop being such babies. They own the music and they can do whatever they want with it. They can overprice it and loose customers if they choose.
If you owned an apartment would you be happy with rent control? Would you like it if you were forced to charge less rent simply because they person who wants to live there doesn’t make much money.
Let the market decide what the right price is. This ruling, in my opinion, is a good thing. It opens the door for alternative system for new independent artists to use. Why lament the death of the old system. Let them go die. We can live without them.
#14 Boy you have no clue what you are talking about. The royalty fees for internet radio were implemented by congress on the theory that digital radio is significantly better than FM radio. Anyone who has listened to both know that is not true. From the Save Net Radio site:
MYTH: Broadcast radio, satellite radio and Internet Radio pay the same amount of royalties to creators of music, or pay proportionate relative to the size of their businesses.
FACT: The smallest medium – Internet radio – pays the most royalties; and under the new CRB royalty scheme the smallest webcasters will pay the highest relative royalties in amounts shockingly disproportionate to their revenue.
Broadcast radio, an industry with $20 billion in annual revenue, is exempt and pays no performance royalties to record companies or recording artists.
Satellite radio, which has approximately $2 billion in annual revenue pays between 3 and 7% of revenue in sound recording performance royalties.
The six largest Internet-only radio services anticipate combined revenue of only $37.5 million in 2006, but will pay a whopping 47% (or $17.6 million) in sound recording performance royalties under the new CRB ruling. In 2008 combined revenues will total only $73.6 million, but royalties will be 58% or $42.4 million.
Small Internet radio services are essentially bankrupted by the CRB ruling, with most anticipating royalty obligations equaling or exceeding total revenue.
I use Pandora.com occasionally, and it would definitely be sad to see it go! Pandora has sent out an email with a link to a petition to Congress to help the Internet Radio industry.
Here is the link:
http://capwiz.com/saveinternetradio/issues/alert/?alertid=9631541
It’s not just the netradio folk who are going to be affected by this – its yet another way that the recording industry is keeping people from hearing new music from artists they might not have otherwise heard.
Ridiculous. Big business gets bigger while the little guy gets shafted yet again.
I hope the stations all move offshore and take with little money they have with them. Why not? That’s what Halliburton’s doing. It’s all the rage.
I am not and conservative and I know that real free markets rarely exist, but I am forced to agree with Ron Larsen. Honoring copyright is a cost of doing business. If an entity cannot afford that cost it needs to find something to offer that it can afford.
I am often struck by the cheapskate nature of many of the commenters at DV. They invariably go to incredible lengths to avoid paying for something or to get a lesser quality version cheap. I’ve cracked up laughing reading some of the contrived computer and entertainment setups they come up with. Ditto for downloading or streaming digital media. Truth be told many of these commenters are the sort of people who are going to grouse about not being able to connive or steal just about anything. They are the people whose digital library consists of recordings from Internet radio, P2P and the criminal operation allofmp3.com. The RIAA may overreach, but I prefer it to them.
Correction: “I am not a conservative and I know that real free markets rarely exist, but I am forced to agree with Ron Larson. Honoring copyright is a cost of doing business. If an entity cannot afford that cost it needs to find something to offer that it can afford.
Addendum: I do not believe the propaganda people like Ariane are posting. If the numbers were that bad for internet radio providers they would choose not to be in the business.
I anyone has an offshore ISP contact, please forward it to me.
vacek_john@yahoo.com.
John
very smart =)