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It's come to my attention that the RIAA {Recording Industry Association of America} along with the CRB {Copyright Royalty Board} are attempting to raise the royalty rate to such a degree that it would put an impossible financial strain on independent and internet radio stations,possibly putting them out of buisness, and would even adversely affect companies such as Yahoo,AOL, and Pandora. This should be of major concern to anyone who is an independent artist,or who values freedom of choice on the radio. As an Indy artist, AND someone who has a radio show that PLAYS Indy artists, I'm pretty concerned about this! For more info, or to sign a petition to congress opposing this go to www.savenetradio.org

hmmm, link does not work.

bc - I'm curious about one thing -

Whenever any DJ has asked permission from ONOFFON to play our music in their broadcasts, they always ask us for the royalty free right to do so. If they specifically have our permission to play our stuff without paying us, why would this effect us or them? Wouldn't it only effect those who haven't given permission, i.e. major label artists who are under contract to those labels? Obviously, the labels want to squeeze every last drop of money they can from anyone they can. But, all we want is more and continued exposure for our music.

It seems it would put us all in a more favorable position and have an even higher demand for those of us who allow their music to be played, royalty free...

Am I mistaken in this?

Link didn't work for me either.

Most of the internet sites I have looked at don't pay any royalties.
some do it seems. I'm not sure if they fall under the same rules anyway.
I don't really understand how the royalties work.
I thought they payed 9.1 cents a spin and that only goes to the songwriters/publishers. Performers get nothing.
But I think Brian said the 9.1 cents is misleading. they actually pay far less.

But, at 9.1 cents a spin
Figuring avg 3 minutes per song
That's 20 per hour(and probably less)
That's 480 for a 24 hour period
That's $43.68 per day.
Seems inexpensive to me.
Or am I wrong?

I would think most legit internet stations would generate some kind of revenue. Advertising maybe? I know I see a lot of popup and banner ads on many of the stations.
Actually I would like to see laws that would force all internet radio stations to pay royalties unless they are 100% not for profit. Maybe that would start putting a little cash into the Indies pockets.

The Actual Link Is Here.

I don't know what the rates really are but multiply what you have by the number of listeners. What you have is predicated on one listener/stream.

Bill,

That would be $43.68 cents a day PER LISTENER. If you have 1 million listeners.. guess what? Not even Bill Gates could pay $43,680,000 a day for a license.

I saw some prelim info that suggests that the Performance Royalty alone (which is separate from the writer royalty which has to be paid IN ADDITION to this) is so high that that alone would surpass the gross income of even the most successful internet radio stations. I have a thought on it. I think this is simply Big Radio finding a way to keep Internet Radio from ever competing. The reason is that Big Radio doesn't have to pay this fee. They still ONLY pay the writer license. It's ridiculous that there are 2 fees for Internet Radio which has to measure PER LISTENER on top of everything else, and then a blanket rate for only the writer share for broadcast radio. It's typical big business scratching each other on the back. I am curious to see how those Big Radio conglomerates who WANT to use the internet will react to this? It certainly will have a chilling affect on it all.

The only fair solution would be to charge the exact same rate/cost of business on traditional radio as Internet Radio. So if it's good for one, it should have to be good for both. Do that, and ridiculous fees won't affect one unfairly. And Big Radio would never allow ridiculous fees like this to happen to them. We've just artificially protected one industry from competition. That's not fair.

And as to the question about getting stuff license free, that is the same trouble that venues get into. If you let 1 song slip by, you're in big trouble. Now, the exception may be if the license is truly on a song per listener basis, it might be possible to ONLY pay for those songs which need to be licensed. (Venues get in trouble because they are paying a highly discounted blanket rate so it's all or none). I haven't heard how this will work, but it sounds like big time trouble. And why should one class of artist (indies) be forced to work for less for the same job? We need a fair rate (like a blanket rate) and it needs to be charged to all broadcasters, internet and terrestrial, equally. And venues and everyone else must also share in that to be fair. But it won't happen. The various lobby's won't allow it.

The hope is still, in my mind, that the big radio conglomerates who dabble in the internet will stand up and fight this. But time will tell. I am all for folks getting paid (and support enforcement of the PRO blanket license for songwriters) and think there needs to be the same thing for performance and that it needs to be charged fairly across all broadcasters/users of music.

Brian

So, if I understand this correctly. Broadcast radio pays per spin? Or per listener? How could they possibly know how many people are listening?
And internet radio pays per listener? I guess, seeing how it's the internet, there would be a way for them to track how many people are logged on to that station.

I know some of the stations on Live 365 radio say they pay royalties. Given what you are saying how can they possibly afford it.

This is all so sad. Everyone trying to screw everyone else. The majors trying to squash the indies. People willing to steal music rather than pay for it and Indies thinking they have to give it away just so people will listen to their music. Apparently they think it has no value.
Yep, this is a sad situation

I read an article yesterday in which it was stated by a rep from KCRW (one of the most well known trendsetters in radio) that they would pull the plug on their net broadcasts if this goes through.

Same thing for RadioParadise which is the largest internet radio broadcast if I'm not mistaken. He claims he'll have to shut down too.

It's not just the plan to raise the rate, it's that the rate raise would be retroactive. It's bad enough as a hike, it's downright destructive being retroactive. From what I gather it would come out to about $.0125 (1.25 cents) per hour per listener. Now mind you, no one pays this kind of fee even to listen to satellite radio.

It's insanely sad that this is happening. I also have to wonder what happens to things like blogs which aren't broadcasts. Cause not even the PRO's know.

Jody

I do not wish to ruffle anyone's feathers, but the information on this thread seems very sketchy. I'm all for discussion, but let's see if anyone can provide the actual fees being asked and how the economics really work. I simply do not believe that anyone is asking nine cents per song per listener. I think that is probably confused with the current mechanical rate, which is about nine cents.

The RIAA might be ill-advised, but they are not stupid. If internet radio can become a viable source of income for them (and I believe it can), they would have to be idiots to try to shut it down with punishing royalties. In all these years, performance royalties have not shut down radio, or TV or music venues. I think sensible ideas will eventually prevail.

Just out of curiosity, what are you currently paying in the way of royalties for the music you play on your show?

Truman,

This came out via the Folk Alliance List.
-----------------------------------------------
The Copyright Royalty Board (CRB) has announced its decision on Internet radio royalty rates, rejecting all of the arguments made by Webcasters and instead adopting the "per play" rate proposal put forth by SoundExchange.

the rates that the Board has decided on, effective retroactively
through the beginning of 2006. They are as follows:

2006 - $.0008 per play
2007 - $.0011 per play
2008 - $.0014 per play
2009 - $.0018 per play
2010 - $.0019 per play

RAIN ANALYSIS: In 2006, a well-run Internet radio station might have been able to sell two radio spots an hour at a $3 net CPM
(cost-per-thousand), which would add up to .6 cents per listener-hour.

Even adding in ancillary revenues from occasional video gateway ads, banner ads on the website, and so forth, total revenues per
listener-hour would only be in the 1.0 to 1.2 cents per listener hour range.

That math suggests that the royalty rate decision -- for the
performance alone, not even including composers' royalties! -- is in the in the ballpark of 100% or more of total revenues.
---------------------------------------------------
I can't verify the math they did at the bottom, but I think those are the correct rates.

Brian

Truman,

You're kidding right? Since when has the RIAA EVER done the right thing for earnings? Seriously.. they are only about artificial control of EVERYTHING.. the control and power is the important thing. This will allow them to "negotiate" lower rates for those they WANT to partner with and screw the rest. That's the risk I see. This ensures ONLY the richest corporations who can afford to lose money on Internet Radio will participate. All the little guys are artificially removed from the marketplace. And if they are allowed to negotiate more favorable rates with individual parties, then my fear above will become reality. The RIAA has long controlled distribution. Now that their artificial control of that has been eliminated, they are looking for new ways to assert control. This is one pretty good one.

Sad. I haven't seen a comment for the Future of Music Folks. I am going to ask them what they think.

Brian

Bill,

It's a combination of both. They pay a blanket rate set on various factors. It isn't based on specific spins or listeners. It's a general amount (much discounted compared to the new CRB numbers) and it isn't tied to either plays or listeners on a given day. There's a secret sampling system used to determine what is being played which is then extrapolated across all license income. That is why you can be played day and night for months on your local or regional stations and never get a dime, or you can get played 1 time on a major station on the right survey day and make some bucks. It's a flawed system. There's no reason any more that exact spins couldn't be determined and there's no reason any more that exact payments can't be made. But there's power in secret systems that you artificially control. I do know they are trying to license tracking technology to improve the situation, but there's big bucks involved there too.

On the internet, the barriers are less and the tracking can be far more exact. Sadly, if these CRB numbers pan out, it looks impossible for a little guy to afford to have a station. I am awaiting official word from the Future of Music folks to see what their position is because they have a seat on the board of Sound Exchange and thus should be thoroughly educated on this. Perhaps we'll learn it's not so bad, or perhaps we'll learn it's even worse.

Brian

In addition to per play, that should read per play per listener. Wanna see/read more about it? Here's a blog post from Bill, the man behind Radio Paradise: http://www.saveourinternetradio.com/2007/03/04/the-view-from-paradise/ Here's even more about it as far as actual numbers: http://www.kurthanson.com/archive/news/030207/index.shtml

Jody

This all just gives me a headache.
What's the point of the law that says songwriters/publishers get 9.1 cents per play? When does that apply?


Seems I have been grossly ill informed.

Bill, $0.091 cents is for when music purchased. Let's say you're the songwriter that has a cut on a record. For every sale of that song there is the writer's/publisher's cut that totals $0.091 cents. Now if you're the sole writer and you own your own publishing then you get that entire amount which is 4.5 cents for the writer and 4.5 cents for the publisher.

However if there is more than one writer then it goes as such: two writers means that each writer splits about 4 1/2 cents. Thus you'd get 2.25 cents as the co-writer and your other co-writer gets 2.25 cents. Your publisher would get 2.25 cents and their publisher would get 2.25 cents. If it's three writers then you'd get even less.

Essentially Bill your idea of 9.1 cents is for when a song is purchased and is called a mechanical royalty (the current statutory rate is 9.1). The royalty rate for airplay is much different and is negotiable based on your PRO. Thus why it's hard to understand why there is much confusion for those that are on radio vs. those on the internet.

Now maybe you can understand why it's unfair for the internet broadcasters as they're being asked to pay larger sums and per listener - which radio does not do.

Jody

Brian, at least in terms of terrestrial radio, there are already pretty well-established digital tracking systems that thousands of radio stations already are being monitored by. So it's not like the people who should be paying up can use ignorance as an excuse at all... the specific spins are already reported! Any sort of "secret" system is outrageous at this point.

Hey folks, I don't claim to be an expert on this stuff, thats why I threw this out there, hoping to get some input from you folks who are more educated in this area. All I know is some of the feedback I've been getting from some of the local Indy statons {including the one I work for} is that they're kind of freaking out over the situation. Thanks to Brian and Jody for looking into it. Truman, I just spin the tunes, so I don't know what the station owners pay as far as royalties. In my case probably not much cuz I have a specialty show that plays local music, but the station's format is classic rock/triple-A. BTW, I don't know why that link isn't working...try it through my station at www.classxradio.com it's in the bottom left hand corner of the home page.

BTW, The proper link is www.savenetradio.org My bad!

Bill,

What we are talking about here has nothing to do with Writers Royalties. We are talking a Royalty that goes to the PERFORMERS of the songs.. this is something that the entire world EXCEPT the US already gets on Terrestrial Radio. The Radio powers in the US have screwed all the artists since day one and don't pay a penny. In Europe and everywhere else, when your song plays on the radio, both the writer(s) and the artist gets a royalty payment. The internet has introduced this royalty since it crosses international borders and it's pretty much impossible for these guys to avoid. The outrage is that Terrestrial Radio still doesn't have to pay the royalty, but if they broadcast that same broadcast on the internet, they have to pay the extra royalty. How is that for stupid? How is that for typical BS. The internet radio stations ALSO pay the regular Songwriter Blanket license fee. Although those rates are still being debated I think.

The only time the 9.1 cents EVER comes into affect is for mechanical licenses. That means per copy you get that amount as a songwriter royalty. For broadcast (Radio etc.) there are blanket license fees where a pool of money is collected, then distrubuted to the PRO's and then doled out based on their systems. Writers join one if they want to get paid. If you aren't on a PRO, you'll have somewhere between little and no chance of EVER getting a dime from radio play.

To Zircon: You'd think they'd have to use the real numbers but they don't. None of the PRO's go off real playlists or real airplay. It's all a mystery game and it's rarely fair or based on reality. It's all skewed towards the big writers of the big artists songs. Ironic that the Internet, which WILL pay fairly is going to be priced out of business. It's all so very sad.

Brian

Well, this has been enlightening. I have a pretty good understanding of how it all works now.
Thanks Guys for putting up with my ignorance.

I always new the radio stations did not pay the artist but I thought they paid the writer per spin. Now I get it.
What I don't get is how they know how much to pay each writer, sounds like a guessing game, LOL. Guess we'll pay this one today, throw a dart tomorrow, and pay someone else, LOL.

Just like the venues. The money goes into a general fund and they somehow dole it out to artist's or writers. How do they know who to pay and how much?

I went to the site and signed the petition.

Actually the same system is used to pay from venues and radio play. They extrapolate and assume (falsely of course) that the radio play mimics the live venue play. It doesn't. At all.

The have a random sampling system. They take those results and assume it is the same across the rest of the country. It's a deeply flawed system. But to date it was the best they could come up with.

Brian

I signed the petition AND wrote to my congresswoman. We'll see if she responds

As I understand it, airplay royalties work this way.The radio stations pay a small percentage(about 2% I believe) of their advertising revenue into a pool for each three month period,the PROs devide this sum of money by the total number of spins in that time period,this determins the value of each spin.If you were lucky enough to be monitered for ten spins,you would get 10 times the spin rate.The more you get monitered,the more money you make.Small stations with smaller advertising dollars would pay less into the pool than a large station that makes a lot more money in advertising.

The 9.1 cents is the mechanical license rate, per song, per CD,it has nothing to do with airplay royalties.

Everett

Everett,

You may be right, but I don't think I've ever heard it explained like you just did. Where did you get your info?

Brian

I heard back from the FOMC (Future of Music) folks and there are in discussions on their official position on this. They certainly don't want small stations to go out of business, but they also don't want major corporations to use that as an excuse not to pay anything as I am sure we can all imagine happening. There's been talk about connecting it to actual income, but that sounds to me like it's wide open to easy corruption by big companies with big lawyers versus little guys with none. I know many folks don't want a blanket rate but rather want to tie it to the EXACT airplay numbers. I agree that's good, but so far what I am reading makes it all sound impossible for the little guy and actually even worse for the middle sized guy who has the numbers of listeners to actually benefit indies and still the willingness to play great music rather than corporatized playlists.

I am looking forward to reading their position. I rarely disagree with them.

Brian

Of course I'm not kidding. What I asked for was more information, and I hope people inferred that I was asking for balanced, reliable information. What we have gotten so far, thanks to Jody posting the links, was the point of view of the INTERNET BROADCASTERS. Now, I respect their point of view, but so far that is the only side we have heard from. I would like to hear the economic analysis from the other side. That is just common sense.

As to RIAA, I disagree. I do not think it is about power and control at all. I think--as in all businesses--that it is about money. RIAA is motivated by revenue, and what they are doing is intended to increase revenue. Whether it is right or wrong, fair or unfair, legal or illegal, moral or immoral, will be determined at a later time.

Still, before jumping to a conclusion, I would like to hear (or read) an in-depth discussion with both sides viably represented.

Brian:

I can't remember for sure where I picked up this info,but I believe it was from SOCAN my PRO.It is the only way that makes sense to me.The value of the advertising would be changing all the time,so the value of each spin would change also.Small stations would contribute less than large stations because the value of advertising would be different.I do believe that the larger stations get to pay a little lower percentage than the small stations,but their dollars paid in would be much larger.

I believe that SOCAN will moniter each station twice a year for a total of a week.If you get picked up in one of those samples,a complicated formula come into play which determins how much this play is worth and projects how many station may have played this song.You may get a fair amount of airplay,but if it does not get monitered,you get no royalties.But you could get paid for ten plays when you may have only had one.Pretty much a hit and miss thing.The big guys that get played on many stations are sure to be monitered every time,thus getting paid the lions share.I do believe that SOCAN is working on a different monitering system,so each play will be reported to them,but I am sure that each spin will go down in value,but every spin will be paid.

Everett

As many of you know I am a very active partner in three online radio stations Tampa Bay Indies, Tampa Bay Rocks and WBSP (dial up friendly). The idea going into this just like any business was to build the stations by offering entertaining programming in a diverse sense, music, talk, maybe sports etc. My show "The Al The Pal Show" offers all indies all the time while Internet Playground offers theme type shows (Covers and Indies), there is also a Mystery and Conspiracies Hour and so on. I personally figured having hit my head against the stone long enough that artists would submit well produced CDs and I would pick songs and play them. Simple. How many times have we mailed CDs out with absolutely no results at all. The time the postage, the product itself and of course that always present glimmer of hope that just maybe this time someone would see its value as a possible HIT. So if you mailed me a CD and it was even close to airworthy I would and have played it. To my delight and my listenerships enjoyment the product I have received has not only been acceptable but 99% downright awesome. So for that thank you, thank you, thank you.
Now, this new hurdle faces us and it's a serious one. We have to protect our interests but at the same time do not want to throw our hands in the air. So, WE NEED YOUR COOPERATION!
We will most likely trim down to one station and play all indie music but we need your permission and waivers like NOW. We also need product. We need your CDs. The best way for us to work effectively is to have the CD in front of us. If you would like to submit material e-mail me at elvis@tampabay.rr.com and I will give you my home studio address. Now on our home page at www.bspass.com there is a prompt that reads "Permission Forms For Artists" Please go there and fill it out. It is brief and to the point and allows us to play your music. Please know that we do pay all PRO (Professional Rights Org) fees, ASCAP, BMI, SESAC, and International PROs as well. We will always support the artists to the best of our capabilities and that means not to give up but to continue playing Indie Music in the face of "the machine" trying to put us out of business. Remember when they hurt us they hurt you. I (we) need your help to keep the online station alive and playing Indie Music. I have personally completed and aired 31 consecutive hour long show that are in rotation a dozen times a week in various time slots giving your material as much exposure as possible. I have played your music Now I'm asking for a few seconds to allow us to continue to play your music. Please dont procrastinate go here now and fill out the form www.bspass.com
Also if you have a site please link to us. Let family and friends know that they can hear your music at www.bspass.com and that we support Independent Artists. Tell them they can listen at work. The stronger our listener base the more opportunity we have to possibly turn this situation around.
Many of you know me and for those that don't please visit my "about us" page at www.aandrproductions.com
Aside from this business I have headed up the Tampa Chapter of JPF for going on five years and am very active in my music community. I also have A and R Productions LLC which trough I produce live shows a few times a year.
Thank you for your support and I look forward to getting through this with you.
Keep Strummin' (I am) Al Alvarez
www.bspass.com

Al,

Have you checked into the legality of having someone simply "waiver" their royalty rights? If they are able and willing to waive their rights for songwriting royalities, that is one thing. But now you'll be dealing with performance royalties as well. That means all the artists involved in recording the song ALSO have to waive their rights for it to be cleared. And IF those artists all waive their rights, wouldn't that require them to be outside of the Sound Exchange system meaning they'd never get paid for anything anywhere ever? The correlation would be that someone is NOT an ASCAP writer, therefore you don't need to pay ASCAP fees. But right now only Sound Exchange is authorized to collect these royalties and thus it's possible that waiving them would mean disassociation with the only PRO that collects. I think things may now be more complicated than ever, and I also think that few artists even understand (hell, even I don't really understand it yet) just what a REAL release would require to avoid you paying those fees, IF you can get out of them at all legally.

I bring this up because you can't assume here and I think you need to find someone who can give you solid legal advice before you make a mistake OR before these actions damage the earning potential of the folks you're trying to help.

Brian

One thing I'm aware of is that Sound Exchange covers Internet and Satellite radio play. I know that SESAC already does this as well. Where I'm confused is if Sound Exchange is going to double dip and then not report. I wonder because so far, I haven't seen any monies in Sound Exchange's corner, whereas I have from SESAC.

Jody

Jody,

I may be wrong here, but it is my understanding that ASCAP and BMI at least are only authorized to collect Songwriter Performance royalties. I am not sure how SESAC could have a relationship and authorization to collect performance royalties on behalf of ALL the musician who played on your CD's? If I came in and did a Keyboard part on a song, how could they be authorized to collect for me? I think it's more likely they can't collect for anyone other than you, and they may not actually be collecting the peformance royalty at all. Can you check with them to clarify? If if they DO collect it, can they explain how they would pay me if I played on your record?

Brian

Here's the official release from the FOMC folks:
----------------------------------------------------
Copyright Royalty Board Decision May Mean Fewer Sources for Independent Music
Future of Music Coalition responds to CRB’s webcasting rate decision

March 13, 2007

On March 4, 2007, the Copyright Royalty Board (CRB) announced new royalty rates for webcasts, effective from 2006 to 2010. The retroactive rate for 2006 was set at $0.0008 per song per user, with rates increasing annually to:
$.0011 (2007) per song, per user
$.0014 (2008) per song, per user
$.0018 (2009) per song, per user
$.0019 (2010) per song, per user.

The rates set by the CRB are in line with those suggested by SoundExchange, the agency designated by the Copyright Office to collect and distribute digital performance royalties. Critics of these higher royalty rates say that these fees could be equal to or greater than many small internet stations’ total revenues, an untenable position that would force many existing stations offline.

In response to this announcement, FMC urges stakeholders – small webcasters, commercial webcasters, artists, SoundExchange – to work together to strike a balance that recognizes the value of webcasting, but also properly compensates artists, performers and labels for uses of their work. While the proposed method of calculating rates based on gross revenue may work for many of the larger commercial webcasters, it’s unlikely there will ever be a “one size fits all” resolution to rate calculations. Nobody benefits if small webcasting stations, those that are the most likely to represent the richest diversity of music available, are forced offline because of an inability to pay the proposed licensing fees. A structure and process that sets reasonable rates for different but clearly defined categories of webcasters would be the best strategy.

FMC has participated in the majority of the prior webcasting rate and reporting requirement proceedings. During each prior proceeding we have emphasized the same basic principles:
Terrestrial Radio’s Weakness is Internet Radio’s Strength

Radio is important to the music industry. In the traditional music business model, radio is seen as the best – and possibly only – way to “break” a record. Except in some rare cases, breaking a record on commercial radio has been a prerequisite to the sale of the hundreds of thousands of copies that are needed for labels to recoup costs. 


Despite its importance to broadcasters, advertisers, musicians, labels and the listening public, there is mounting evidence that the traditional commercial radio model is broken. 

 As we have documented in two substantial reports, the consolidation of radio station ownership that has occurred since the 1996 Telecommunications Act has had a dramatic effect on the state of radio for musicians and the American public. According to our December 2006 study:
• Just fifteen formats make up three-quarters of all commercial programming. Moreover, radio formats with different names can overlap up to 80% in terms of the songs played on them.
• Niche musical formats like Classical, Jazz, Americana, Bluegrass, New Rock, and Folk, where they exist, are provided almost exclusively by smaller station groups and noncommercial broadcasters.
The Telecom Act unleashed an unprecedented wave of radio mergers that left a highly consolidated national radio market and extremely consolidated local radio markets. Radio programming from the largest station groups remains focused on just a few formats—many of which overlap with each other, enhancing the homogenization of the airwaves.

Contrast this with the internet which, by design, allows webcasters to offer just about any possible mix of music and information. Webcasters can not only specialize in underrepresented genres such as classical, New Orleans jazz, punk rock, or bluegrass, but for the first time they can legitimately make a business out of aggregating small numbers of fans of these niche genres all across the world. This possibility is strengthened by the relatively low barriers to entry for webcasting as individuals can create and launch a webcasting station with just a handful of affordable resources; access to bandwidth, some computers, software, and a little bit of know-how. The limitless spectrum and low barriers to entry also means that there’s a better chance for legitimate market competition to flourish on the web.

Webcasting creates a wealth of new choices for music lovers and information seekers that, until recently, have had their choices restricted to what’s being broadcast in their local area. It is abundantly clear that webcasting represents a rich and diverse set of listening opportunities that are basically nonexistent in the terrestrial world.

For Musicians and Labels, Webcasting is also a New Revenue Source

Webcasting also benefits musicians and record labels. The Internet has already created new ways for artists to promote and distribute their music, to connect directly with music fans, and build communities outside of the constraints of commercial business models. FMC believes that webcasting plays a vital and growing role in this area, both as a new mode of promotion that encourages music sales and builds fan bases, and as a new source for public performance royalties, 45% which go directly to the performer and 50% directly to the sound recording copyright owner (usually the label). As a demonstration of the royalties that digital performances represent, to date, SoundExchange has paid out over $53 million to thousands of artists and record labels, with numbers increasing each year.

Multiple Licensing Tiers, Reasonable Reporting Requirements

In the prior webcasting rate and recordkeeping proceedings, FMC underscored the need for multiple licensing levels that recognized the difference between large commercial, small commercial, noncommercial, and hobbyist webcasters. This, in a large sense, did come to fruition. There are currently exemptions for noncommercial webcasters, and reasonable flat fees for very small webcasters.

We also called for reasonable reporting requirements and the automation of the reporting process. Early drafts of reporting requirements included more than a dozen data points for each song played, many of which were not readily available to a small webcaster. FMC was pleased when the reporting requirements were reduced to a manageable number, but we also continued to call for some automation in the process that would verify data from a centralized authentication database. This would not only reduce workload at the webcaster level, but it would also ensure that the proper rights holders would be compensated. This authentication database notion is still something FMC embraces, but we understand that costs and ownership issues make it an unlikely solution in the near future.

Possible Outcomes of the Current Proposed Rate Structure

This rate-setting announcement has generated dozens of press stories and blog entries, most of them decrying the decision as too onerous, especially for small webcasters that may now be required to pay more to SoundExchange, ASCAP, BMI and SESAC than their total current revenue. For small webcasters, operating under these new conditions would mean:
• increasing revenue by selling more advertising, thus reducing time playing music
• playing fewer pieces of music per hour, thus reducing time playing music
• going off the air, thus eliminating an existing digital performance royalty stream entirely and reducing competition in the marketplace.

Based on the first two scenarios above, there is likely to be a reduction in the amount of music content played by small webcasters and, subsequently, less royalties flowing back to artists and labels. In the third scenario, we might see many small webcasters go offline, which would eliminate the flow of digital performance rights entirely. Given that the niche music formats are most likely to benefit from webcasting, it will be the niche artists and less commercially viable formats that are affected the most. Given the internet’s proven power to increase artist exposure and artist compensation, we find the notion of regression in the world of webcasting to be one that independent artists and music lovers should not accept.

Recommendation

FMC understands that the rates may be appealed, the Congress may intervene, or that webcasters and SoundExchange could craft a voluntary agreement. Future of Music Coalition urges the parties to work together to strike a balance that recognizes the value of webcasting, but also properly compensates artists, performers and labels for uses of their work.

Hey Al, I just read your comments, and I agree! I have a couple of ?s I'd like for you to answer - OK? I have only 2 or 3 ready-for-airplay demos that are "ready" for the world to hear! Do I need to wait until I have a complete CD, or can I just submit these 2-3 songs? I am being "played" on 4 stations so far, but NONE are offering any royalties! Why not just open your case on a street-corner if that's the case? I have done that, and STILL received $$$ so why NOT have it to where there is a legit internet radio station who pays royalties - as they all should! That's why WE write - to make $$$ ! Can I just send you these 2-3 songs? I don't think you'd be disappointed! E-mail your response to: raywithrow@yahoo.com Ray Withrow singer/songwrter/Pres. of No Creek Music Publishers (ASCAP)

As usual Brian has some interesting points. We are conferring with legal in hopes that we do understand the entire picture and as it stands now we do intend to continue with indies who supply waivers. Here is a link to Save The Streams from their "Frequently Asked Questions" section....

www.savethestreams.org

5. Well... independent music is cool. Why not just play independent music?
This is very important to understand, as lots of people see this as a solution. The statutory webcast license covers ANY copyright music, from the biggest labels, down to the smallest, and even independently-released music. Again, the license covers ANY copyright music. The copyright owner need NOT be part of SoundExchange or the RIAA. The ONLY exceptions to this are (A) direct deals with each and every sound recording copyright owner, (B) copyright owners that are willing to make a blanket "waive" of fees, or (C) non-copyright, public domain music.

Although we can't control payments from the PROs we can help with exposure for artists who sign waivers by giving you airplay on the online radio station that we support with our own out of pocket monies.

Al
www.bspass.com

SESAC doesn't pay performers on the record. I do know that I've signed up with Sound Exchange and gotten nada even though I played on all my CD's and on others. So I suppose that Sound Exchange is not as thorough as they claim. Or they don't pay the artist who is the performer. I don't know.

I have gotten performance royalties from SESAC for airplay, netplay and such. I get a nice broken down statement that tells me everywhere they found it. Which also includes live dates from when I've performed live. Which is cool thing that SESAC does. Even more handy is that they have a web based login where you can input your live data to get that payment.

Jody

Jody,

We need to clarify. ASCAP, SESAC and BMI collect songwriter royalties. Soundexchange collects Performance Royalties. They are 2 different and unconnected things. I think Soundexchange has done a terrible job (and we've tried and tried to get them to work with us to educate with no success) getting the word out on how they work etc. FOMC has 1 board slot on Sound Exchange so I have asked them to act on our behalf and get SE motivated to educate folks. The sad thing is that I contacted 36 JPF members that were nominated THIS YEAR who had royalties available at SE and only 1 of them bothered to collect. (Only 1 other even responded and asked ME to collect it for them.. obviously I didn't bother to try and help them further).

So we're talking 2 separate things and SESAC, unless I learn otherwise, would have no right or access to collect a performance (i.e. performer) royalty for internet airplay. In almost all other countries in the world, regular radio play ALSO pays a Performance royalty side by side with the Songwriter Royalty that BMI, ASCAP and SESAC collect. Our Radio companies got congress to waive that in the US. That decision has not only cost all of us HERE, but around the world. Since we don't pay their artists a royalty, they hold our money and pay it to their own folks to compensate for our lack of a royalty here. It sucks bad and it's a dirty secret that most artists in the US don't even realize they are getting screwed out of.

Brian

Brian, I never said SESAC collects a performers royalty. But they have collected netplay and other sources that I've had.

But obviously something needs to be done to change that status about said royalty for US radio.

I once spoke with someone from Sound Exchange. I don't think even they know exactly what it is they collect - at least their customer person that I spoke with made it sound like they were the sole source for all stuff internet and satellite, which is not true - but it's probably correct as a performance royalty to the person that played an instrument on the song as you state.

It's hard to change things when the people who deserve the money don't even know it's supposed to be there to collect. Thus if they're not being the squeeky wheel, it will never get solved.

Jody

Jody,

You're still not getting it. There are 2 separate and disconnected royalties. One goes to the songwriters. That is what the US PRO's collect (ASCAP, BMI, SESAC). On the Internet there is a new royalty that Americans have never gotten before. It's a performers royalty. So for example, if you record a Beatles song, one royalty is paid to Lennon/McCartney.. the other is paid to you.. the performer. That doesn't exist in the US on Radio but it does exist everywhere else. SESAC does not and can not collect that royalty as it has nothing to do with what they collect. Right now, Sound Exchange is the only entity that can collect that royalty. The regular songwriter royalty IS collected on the Internet by the PRO's and that is what comes from the blanket licenses that Internet broadcasters have been paying for a long time. This new royalty has been in dispute since the start and the above info is what they've decided on. Do you understand now?

Brian

wow brian,

I had no idea about the US being behind the times with the performance royalty. So in effect, the only way you get a royalty from radio play is if you are the writer of the song? So recording artists that dont write, ie britney spears or pussycat dolls do not get paid for being spun on the radio? i always assumed they did get paid. How did this last so long? Seems like performers have been brainwashed in all the performing arts in the us.

Im curious about what will happen to myspace.

I believe artist get paid in Canada,under something called "Neighbouring rights".I don't know a lot about this as I am not a performer,just a writer.

Everett

never mind

Brian, you are too quick to assume. Yes I got that.

I think you missed my point in my last post. Not even employees of Sound Exchange seem to know exactly what they collect and for whom. And as I was saying, I should be getting royalties from Sound Exchange based on netplay and such that I've gotten as I'm the main performer on my material (for multiple instruments). So, I should be getting such royalty that they collect - as of yet I've gotten nada.

I'm with you on the education thing. Obviously if people are ignorant, no one would be the wiser and since there is no campaign they aren't properly being educated. This could be a good cause to get behind eh? Maybe in the next newsletter?

Jody

Hi fellow folks,
I just got of the phone with partner Larry discussing an e-mail from legal at Radio365 who is the server who not only carries our stations but thousands of online radio shows and stations. The word is that there is no standard form so we just need to have a simple email or any written format authorizing us
to use content that waives performance royalties/fees to SoundExchange. You must specify each individual song and that you have copywrite.
I respect and understand the conversations that are going on here on this thread but can't comment because I just don't have the answers. My main focus is to keep the stations alive to build a business that allows us to play Indie Music.We need your permission forms which include waivers now. The transition is hard enough without chasing folks down trying to help them. Please check with all parties who may have an interest before submitting forms. It really shouldn't be a Hugh problem.
Thanks to the many artists who have already complied.
Peace, Al
www.bspass.com

Al,

I just got off the phone with some folks in DC. Their feeling is that you don't need to worry. In the end, they don't believe small hobby or non profit stations will be affected. And small commercial broadcasters will likely have some reasonable rate. The real concern right now is that major players (the gigantic multinational corporations) at tweaking the little guys and then hiding behind them to get it all thrown out. They can afford to pay it. Music for most of them is simply a loss leader to sell other stuff. But they want the little guys to freak out and scream loud and then politicians and citizens alike will pull the royalties out from under artists completely.

We have to look at this in two very different ways. Are we supporting artists/writers here or are we supporting broadcasters? Sure, some folks, like Al, are trying to be both. But in the end, I think our focus is 1: To do the right thing for everyone and 2: If that's impossible, then we are fighting for artists and songwriters first because they have the least support and resources on their side.

Terrestrial radio got away with not paying Peformer Royalties many years ago and we've never gotten those payments since. It not only screws us in the US, but everywhere else because radio stations in France or the UK or Italy or (fill in the blank) simply KEEP our performer royalties and never pay us. That is to offer restitution to their artists who don't get paid here. Sucks for everybody except big US radio. But.. that's changing now.

It's predicted that digital and internet radio will replace terrestrial broadcast radio. If that happens, then we'll finally reclaim the performer royalty across the board. If it happens as some predict, the current airwaves will be turned back over the less commercial uses. I personally don't think that will happen perhaps in my life time, but eventually it will. And with it will come a fair payment for both the writers and the folks who perform the music. Then, if you want to do a great cover of Led Zepplin tunes, you can STILL make a living because you'll make money from airplay. (No Chris.. if Madonna has a #1 songs with something she didn't write, she doesn't get a penny from radio airplay of it).

So it's critical right now to take a deep breath.. let some dust settle and sort through the 140 page document to see what non commercial stations actually have to do (they may be waived) and small commerical have to pay (may be a flat rate license or a % of income which is good). Then the major players may be held to a fair (for them) rate that will help artists finally start making a living for being artists, whether they are songwriters or not. And guess who else that helps? All those non performing writers. Then it will be about finding hit songs to make more performance royalties from rather than finding album filler songs written by the artists themselves that no one ever wants to hear.

Take a deep breath everyone. And for Al, unless you're making significant money already, I'd hold off cancelling stations until the dust settles.

Brian

Thanx to everyone, {Brian and Jody in particular} for looking into this. I'll be happy to report your findings back to my station www.classxradio.com

So the verdict for now is... I don't need to shut off my soundclick radio station... right?

Chuck Crowe

Thanks to everyone who is staying on top of this and especially Brian for the encouraging words after his call to the powers that be. We are going to continue with the stations but will for now anyway cut out all but indie artists. We will play all indies all the time. We need folks to host radio shows and have a killer deal where you can be heard. Contact me for details.
Al
www.bspass.com
www.aandrproductions.com

Al,

Conventional wisdom is that not being affiliated with a PRO has ZERO to do with the new fees. ASCAP, BMI, SESAC have nothing to do with the new royalty, therefore your restriction is a waste of time and no more useful than playing only people who don't own houses or eat peanut butter. Those PRO's have no bearing at all on the new fees. Now if you're trying to get out of paying PRO fees, that's a different story. That's nearly impossible to maintain though. 1 mistake and you owe it all.

Brian