JPF Home Page Forums General Messages Brian Austin Whitney Blog Monday, April 23rd, 2007

Hi Folks,

I've been getting more emails and articles forwarded to me about the doom of Internet Radio. I can't help but think there's legit problems and arguments to be made on all sides of this issue.

For example:

1. The Non Profit Broadcasters: They make the argument that they can't afford to pay the cost of the licenses. If they are a non profit/non commercial station, I think they should be exempted or have a reasonable blanket license for non commercial use. I suspect the big commercial broadcasters don't want that because it's competition for their broadcasts. I imagine most artists would be happy to give free license to people who are not making a penny off of the effort. I would.

2. The Huge Commercial Broadcasters: They say they can't make a profit if they have to pay for the music. I suggest they shouldn't have the right to use music unless they compensate the musicians AND the writers for that right. After all, artists can't tell broadcasters NOT to use their work for profit. We are forced by the government to allow them to play it as much or little as they want. If artists had the right to negotiate one at a time, it would be okay not to have a blanket license. But it has to be 1 or the other. Either a blanket fee allows you to play anything.. or you have to negotiate with each artist on each song to do so. Why is it that artists should be forced to help a commercial company make a profit without getting anything in return? And for those who say that "airplay" is its own reward, that's BS. Airplay is PART of the compensation for allowing blanket licenses. Not the ENTIRE compensation. What other worker is forced to turn over the fruits of their work to anyone who wants to make money from it? I know some artists would LOVE to refuse one or more of the big broadcasters from playing their music. Imagine how much money Madonna could make if she could exclusively license her songs to only certain radio broadcasters? See the problem here? She's forced to give up that right. She should get paid for her work as an artist, not just as a writer. In addition, the guy who plays that amazing guitar riff on Steely Dan's "Reeling in the Years" should get paid because let's face it, that guitar playing MAKES the song. So why shouldn't he get his tiny micro fractions of pennies which, over the years and number of plays, would add up to some actual compensation for his amazing work. That's only fair. What about the band members in Vertical Horizon who had the #1 song in the world with Everything She Wants, but didn't make much money at all from all that airplay because only 1 band member wrote the song. That should change. Big broadcasters can make money even at the higher rates. Sure, they don't WANT to share their profits, but since they are making that money off the work of musicians, they need to share it and pay for it.

3. The Speculative Internet Venture Capital Broadcasters: Live 365 is a bunch of venture capital money at work. Why do musicians owe them a huge IPO or corporate sale windfall? Seriously.. shouldn't they have thought this through before they invested in the idea? If Live 365 can't survive paying this royalty (and I do believe that they aren't making a lot of money) why is it the responsibility of the musician community to prop them up by giving away their work? After all, they don't want to work for free do they? They want gigantic financial returns on their investments. Perhaps they just have the wrong model? If so, then they'll lose what they risked and go on to the next highly speculative venture. That's what those types do. I really don't get why they expect musicians to be the only ones not making a dime? Again, I don't buy the argument that the "airplay" they get makes up for giving their music away for commercial use. It's PART of the compensation that musicians and songwriters get by participating in the government mandated blanket licenses. Without the benefit of "airplay" then why would anyone want a blanket license? See the obvious point here?

4. Sound Exchange. They work for the RIAA, though I think they no longer "officially" are part of the RIAA, it's clear they are still connected at the hip. We've been supportive of Sound Exchange here and we've taken their side in this issue, but they are making it hard to do so. Inappropriate comments from John Simpson, their leader, has pissed off a lot of people. And the fact that the rate is simply too high seems lost on them. They also should have made special options for small commercial broadcasters (a % of income at least) and a small blanket license or an exemption for non profits. But they didn't and so here we are. Now to their credit, this all came about (as I have been told by many people, though I could be wrong if they have it wrong) because the broadcasters wouldn't negotiate with them years ago for a fair rate. So they got in a pissing match in court and SoundExchange and the RIAA won. And they apparently threw the book at the broadcasters with these rates. Conventional wisdom suggests that this will now FORCE the major broadcasters to come to the table and negotiate lower rate deals. But that leaves the little guys hanging out to dry and that's not acceptable. If big broadcasters get a new lower deal, and no similar offer is made to everyone else, then SoundExchange is doing the wrong thing in my opinion and it will come back around to bite them on the butt via congressional action. They MUST give a reasonable and fair rate to the little guys. If they don't they've partnered with the major broadcasters to shut everyone else out and thus recreate the old school artificial controls over the market place like the RIAA labels have done with limited shelf space in record stores over the years. Perhaps this was the plan all along. If so, it's smart on their (The RIAA) part, but not something we can allow.

5. The RIAA: You can't blame the RIAA for trying to get what they can. After all, musicians have been screwed for a long time because US Radio doesn't pay performers royalties like they do in all other Western societies. So you can see why they'd want to get every penny they can now. BUT.. if they are negotiating deals with Sound Exchange to allow big broadcasters lower rates by playing their catalogs, and Sound Exchange doesn't extend that to all other broadcasters, then they are screwing everyone not on their labels. It's the same artificial control they've had over shelf space, only now it would be artificial control of on-line broadcasting to exclude all content not on the major labels and being played by only the big broadcasters. That's a scary thought. And it will cause a lot of uproar if that plays out. There needs to be 1 openly published set of rates based on size of broadcaster and commercial-non commercial status. If we don't have that, the system is being artificially manipulated to support one special interest group and that won't be acceptable.

6. The musicians. As usual, we're at the bottom of the food chain. We give the most to the process and have the least power and get the least compensation. As a community we can't allow 10 more generations of musicians to get screwed as our current and previous generations have been screwed by terrestrial radio. We NEED this license. We DESERVE this license. We can't allow good intentioned people who don't understand the real big picture to help the big broadcasters overturn it. We also can't allow the special interest at the major labels to screw us over from the other side. As usual, we're getting hosed by everyone. Both sides are our friends and enemies simultaneously. And that's why it's such a cluster F$CK!

7. The fans. They just want more diversity in their music choices. Little non profit and small commercial operators give them that. We had a guy here who has a channel mostly playing ukulele music for an average of 10 listeners at a time. What a cool thing to know someone is offering that. Why put him off the air? That's stupid. I am not sure that fans care if musicians get paid, but for us to have a thriving music world in this new era in technology, I think they'd like to get their free Internet radio and know those artists they love can afford to keep making music.

Again, this is all my opinion and thought process on this. Things are confusing and ever changing. If I got something wrong, please correct me. But if I am right, this is a big mess being made worse by a lot of opposing special interests. But in the end, the enemies may well work together to screw the little guy. Isn't that what always happens in our world?

That's just my opinion, I could be right!

Brian

Brian,

Number six has always been one of my pet problems.

Musicians will stab each other in the back to play a free gig. Look at attitudes about the union, about PRO fees, and now about internet radio.

Politically, we could form a much greater bloc than the RIAA or any of the big biz groups, but instead we depend on their largesse and hope for scraps from the table...the table that we provide.

There's no business other than art where the creators and owners give away their product at a far greater rate than that which is sold. What if McDonalds gave away hamburgers, Then Burger King started, then Wendy's...do you think they'd keep doing it and keep trying to outgive each other? That's what we do.


If artists, musicians and songwriters spent one month refusing to provide free product to anyone, the whole paradigm would start to shift.

But, it ain't gonna happen. We'll go on thinking of ourselves as adversaries. The opposing interests will go right over the cliff while Congress throws a rope to the large donors.

That's just my opinion, I could be wrong.

Mike

Mike is Right!
It is bad enough that we get screwed by club owners promoters,sharks etc.
I am thinking about printing up a t-shirt that says:
No sex among musicians!
We got to stop screwing each other.
(business wise)
Jeesh!

Don't lump us all in there. I've stopped clamoring for any free gig. I don't care enough about not getting paid to clamor for a gig, if it's not me they specifically want. I will do something for a friend, if I'm asked and I believe it's valuable to them.

I do believe we deserve to get paid. The people I've started working with recently believe the same thing. So I don't stab anyone in the back.

So there's 1 musician, anyone else care to make it two?

Jody

Two...I only play for free if it's a benefit for a good cause, and I do my damndest to promote the music scene {local and beyond} keeping with the JPF motto of course! {And as Brian said, I'm stuck in the middle, cuz I'm a working musician, AND have a radio show that PLAYS indy musicians. www.bobcushing.com, www.classxradio.com

i just played a cancer benefit on Saturday, and with a young woman of 48 passing this week and my 58 year old cousin about a week or two from being taken as well, I'd do it again and again...as for the internet radio license I believe the only free performance should come from sites authorized by us the artist or the publishers we have assigned rights to, anything else should be a 30 second clip like I-Tunes does...I don't think we do ourselves a service by giving anything away, quite the contrary, we only have a real fan when they have purchased what we have created and would do it again...from what I understand ASCAP is dilligently working the digital domain rights agenda with earnest. It is quite a pit to jump in , I'll admit that...Moker

Huh.. maybe someone's reading my blog....
---------------------------------------------
SoundExchange Reaches Out To Webcasters


In an effort to ensure a robust business environment for both webcasters and creators of music, SoundExchange announced that it is in discussions with some webcasting services, both commercial and non-commercial, following the recent rate-setting decision by the Copyright Royalty Board (CRB). SoundExchange is exploring mutually beneficial business arrangements that help to foster growth of Internet radio and provides fair compensation to creators of music.

In its ruling of March 2, 2007, the CRB increased royalty rates paid to artists and record labels from performances on Internet radio to more favorably reflect the value of music to webcasters.

SoundExchange contacted some services several weeks ago in order to seek information and schedule possible discussions, and it is willing to meet with additional webcasters as well. "Our continued outreach reflects our long-standing position that these are two businesses - webcasting and creating music - that are joined at the hip and that need each other," said John Simson, Executive Director of SoundExchange. "We recognize that there may be certain needs and expectations, as expressed by webcasters in recent days, that might possibly be addressed through direct discussions," added Simson. While SoundExchange maintains that the CRB's decision is sound and reflects the fair value for music in the market, SoundExchange stands ready and willing to engage the webcasters on issues of importance to them. "We sought a dialogue with these services in order to determine if there is an appropriate business solution that addresses their concerns while still ensuring fair compensation for artists," said Michael Huppe, General Counsel of SoundExchange. "It is in the industry's interest to foster the continued growth of Internet radio, and we stand ready to work towards that goal," added Huppe.

I don't get it at all. We have this huge debate going on as to who pays, who is exempt, etc. etc.
Most Indies give their music away anyway so what difference does it make. Even with these new rates most Indies won't get a dime. These outfits don't pay the royalties they are supposed to be already paying.
Paltalk broadcasts music all day long. They are not paying royalties on those chat rooms. Most internet stations want a waiver. Go to Soundclick, there are hundreds of stations there broadcasting without paying royalties.
Why? Because the Indie Artists let them. And the people listen because it's FREE.

Brian posted this;
. The fans. They just want more diversity in their music choices. Little non profit and small commercial operators give them that. We had a guy here who has a channel mostly playing ukulele music for an average of 10 listeners at a time. What a cool thing to know someone is offering that. Why put him off the air? That's stupid. I am not sure that fans care if musicians get paid, but for us to have a thriving music world in this new era in technology, I think they'd like to get their free Internet radio and know those artists they love can afford to keep making music.

Where is it written that fans deserve to get FREE music?
Fans don't give a [naughty word removed] about diversity as long as it's FREE music. Radio stations that don't have a ton of commercial advertising get the most listeners. FREE music. When they have commercial advertisers that is who is paying for the music but the fans have to put up with listening to commercials ads. If a station has too many commercial ads the fans switch channels.
Same with internet radio. If the station has a bunch of popup ads or banner ads the fans complain. The other option is having payed subscribers. If ALL internet stations required paid subscribers they would be able to pay the royalties. But everyone wants it FREE. period.
Everyone wants it FREE.

I get 600 to 800 spins a month on Soundclick alone now. But it is FREE. If they had to pay a lousy 5 cents a spin I would make $40.00 a month on that alone. It isn't much but it's something.
I am played on quite a few stations. I have no idea how many people are listening to those stations so I cannot say how many listeners per spin I have. It could be a few, it could be hundreds.

Lets say I listened to internet radio 3 hours a day for a month.
Figure 4 minutes per song avg. that's 15 songs per hour 45 per day 1350 songs per month...FOR FREE.
I don't have a clue what this new royalty per song/spin is going to cost, someone else will have to figure that out.
How much would I have to pay as a subscriber to cover it and give the station a little profit. Most businesses run on about a 12 percent margin I think.
Subscription $5 a month, $10 a month? I dunno.

As long as the fans want and get it for free it isn't going to matter.
Broadcst music and the air that I breath are the only thing in this world I get for FREE.

I'm in. Now how do we do that?

Nobody has to pay 5 cents a spin. It's micro fractions of a cent per spin. And Soundclick can only do it if you let them. No one forced you to give your music away to sound exchange. Why did you do it?

Royalties are for pro musicians. If you're a hobbyist, you're right, it's unlikely you're going to make money. Just like guys who play basketball as a hobby don't get pro athlete paychecks. But for those pursuing a serious career making music a royalty gives them a chance to make a living. When you're making music that appeals to the masses and the internet stations start playing them, royalties will start to add up. If you're not pursuing a pro career, then you shouldn't really care one way or another. But don't screw it up for those that are.

Brian

Brian, How am I screwing anything up for anyone by asking a question. Where is it written that fans should get music for free. I don't quite get that. Even though I have been listening to radio all my life...for free. I do understand a little about business though. Those terrestrial radio stations have to generate revenue somehow and it's through advertising that it is done, just like television. Cable television has subscribers and has advertising. I don't understand why internet stations should not be doing the same. Either ads or subscribers. How is that screwing anyone?

Have you ever been to Soundclick?
There are thousands of musicians on there. Many are professional working musicians. They put their songs there with full streams and anyone can listen for free. They are not hobbyist's but their music is there for anyone who wants to listen. Same as me. My hope was that someone would actually be willing to pay for a download once in a while. As far as I can tell from talking to folks at Soundclick very few people get paid downloads. Just about every member on this sight has music on soundclick or one of the other free sites, including some that are professionals.
And most complain that they are not making any money.

The paid download sites that offer paid listens don't charge micropennies per listen. I think it is around two cents per listen.
Might even be more, I'm not sure.
I know the radio stations pay micropennies. I understand that and that is how it should be.
And I do get played on a few stations on the internet but apparently not enough to generate any revenue. Besides, I had to send a waiver to most of them anyway. Just like everyone else.

I was sent notification last week that a station in the UK was airing my songs on The internet and terrestrial radio. Does that make me a pro? Probably not.

I am talking in the broad context of the discussion. Many people have said "I'm never going to get paid by this, so let's not have a royalty." That's a bad position. It's like saying "I'm never going to make a living as a surgeon.. so let's have the government mandate that surgeons have to work free." It's exactly what would happen yet again if this royalty isn't put in place. Musicians have been raped in the US since the dawn of radio. Let's not let it happen again at the dawn of internet play.

Brian

Sorry Brian
I misunderstood
I agree wholeheartedly that ALL musicians should be compensated for their work. Even us little guys.

It's folks like you that are always working to try to improve things that keep us going
Thank you for all your efforts.

If you put your music up on Soundclick,you are not asked by radio stations if they can play it,they just play it anyway.I suppose it is good for exposure but it puts nothing in your pocket.Listeners are not going to buy if they can get it free,why buy a cow if you can get free milk when ever you want it.

By putting it there, you must agree to let them do it. So you've given permission. If not, you could sue them.

Brian

Hello Im still young in this industry but in my opinion in the regulation that happens in the internet by collecting a royalties per every spin sounds legal to me. The benefits are directly to the artist and the internet is the new wave of the future where accurate accounting for every songs can easily be trace. There is no sampling procedures that the present collecting societies ussually do. If someone blocks this collection scheme, the history of screwing artists will repeat again and the intellectual property rights vested to every people with extraordinary gift will turns into a useless law.

I dont know what is the consequences of the new rulings maybe the listeners in internet radio will decrease because they will shoulder the cost imposed to the internet radio provider. Then they will resort to other ways like Peer to peer file sharing.

Oh my.. We have no way to get even nowadays. Only the big name in the industry still monopolize everything

Lynman

I'm curious how the SoundExchange/Webcaster talks will shake out. Some people think the whole point of SoundExchange's reaching out to webcasters to negotiate lower rates is to also gain some control over the playlists. "Sure, we'll give you a lower royalty rate so long as you play Artist X once every 2 hours," stuff like that. I'm not sure I believe that, though. We'll see.

As for artists not doing things for free: dream on. So long as "exposure" has value, the artists who want to be paid will always be outnumbered by the ones who want to be heard.

I already know for a fact those negotiations are going on. Exactly as you describe. I said the same thing above. It will be a new way to artificially control "shelf space" as they've done all along.

Brian