Print 28 comment(s) - last by Screwballl.. on Jun 28 at 11:49 AM

An online demonstration attempts to increase awareness for online Internet royalties, but is anyone listening?

Yesterday marked a significant day for the music industry, especially for those that broadcast music to users on the Internet. Designated as the official national Day of Silence, thousands of Internet broadcasters around the nation went silent for 24 hours. The demonstration was part of a larger movement to protect broadcasters from being subjected to royalty hikes.

Online broadcasters state the industry is at risk of collapsing because of the new royalty regulation. SoundExchange, the organization responsible for lobbying the new regulations state otherwise, indicating that the new rates are fair and are necessary to compensate music artists.

SoundExchange chief executive officer John Simson spoke out for the organization earlier this year. According to Simson, "rates are fair" and the proposed legislation to nullify the May 2, 2007 ruling of the Copyright Royalty Board (CRB) would hurt artists. SoundExchange said in a statement that if the bill passes, "artists would have to write checks to cover refunds to corporations whose CEOs and top executives are paid millions of dollars per year."

While Simson complained that the Internet radio bill was retroactive, the CRB's ruling too is retroactive. Besides the higher fees, broadcasters will be forced, by law, to pay for music that was streamed to users even before the new law was conceived, citing that with or without the CRB ruling, online broadcasters owe money to artists.

SoundExchange continues to march forward with backing from the Recording Industry Association of America (RIAA). Both organizations have said in the past that the music industry and artists suffer from the lack of revenue. According to Simson, small webcasters account for only two-percent of Internet radio revenue and the new changes won't affect them. Simson mentioned that those against the changes are mainly "mega-multiplex services like AOL, Yahoo!, Microsoft and Clear Channel, which will benefit from rates substantially lower than those set by the Librarian of Congress in 2002."

"Because the bill is so heavily favored to enrich the big webcasters, it raises the question as to who is really behind the SaveNetRadio Coaltion," said Simson.

SaveNetRadio is an organization made up of a number of artists, labels, listeners and webcasters who all believe that SoundExchange and the CRB ruling jeopardizes online radio. Many independent artists believe that online radio is the most important way for them to be heard without being part of a major label.

"Internet radio has allowed IronHorse to bring its music to the public. We do not have a label and therefore our chances to get on regular radio are nil. We have increased CD sales and have acquired a European following," said IronHorse, an independent band.

Online broadcasters issued statements of their own, indicating that the music industry already has what it wants and now is just going too far.

"Webcasters want musicians to be compensated. For years we've even accepted the fact that we pay far higher rates than other forms of radio. What we want is a rate that properly remunerates artists, but also allows this medium to thrive. That is doable, and it's a win for everyone," said Tim Westergren, founder of Pandora.

One major issue for broadcasters is that many of them already pay separate royalties to music publishers and songwriters. With the propose fee reaching up to 0.19 cents per play in 2009, broadcasters and critics are complaining that the rates are unacceptable because there are yearly increases to the rates.

While Internet radio faces its own battle with the music industry, traditional radio has its own war to wage as well. Last month DailyTech reported that the RIAA proposed legislation that traditional radio have to pay extra royalties. According to RIAA chief Mitch Bainwol, music creation is suffering a decline in sales -- not due to a decline in music quality but due to the lack of revenue.

Without a doubt, those representing music creators are fighting for something entirely different than those that make artists famous. National Association of Broadcasters chief David Rehr previously stated that the current system actually benefits both sides of the industry.

"The existing system actually provides the epitome of fairness for all parties: free music for free promotion," said Rehr.

Despite the obvious, the RIAA and SoundExchange plan to march forward, whether or not Internet broadcasters go silent or listeners oppose.

"The time comes that we really have to do this," said Simson.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

not Ex Post Facto
By srue on 6/27/2007 3:38:59 PM , Rating: 3
"If retroactive payments are enforced by the CRB, the ruling could be subjected to federal court scrutiny as it would conflict with ex post facto laws. According to section 9 of the U.S. Constitution, no ex post facto law is allowed to pass. What this means is that Congress is forbidden to pass any law that will work retroactively, criminalizing actions that were legal when they were committed."

The ruling in question is not subject to the ex post facto provision of the Constitution because it does not create criminal penalties. It merely provides for a civil claim.

That being said, the law still sucks.

RE: not Ex Post Facto
By rika13 on 6/27/2007 4:18:41 PM , Rating: 3
Article 1 Section 8

To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries

Article 1 Section 9

No bill of attainder or ex post facto Law shall be passed.

simple, concise and explicit, no ex post facto laws period, criminal or civil

this law can easily be challenged because it is blatantly ex post facto

RE: not Ex Post Facto
By TomZ on 6/27/07, Rating: -1
RE: not Ex Post Facto
By FrankM on 6/27/2007 6:50:23 PM , Rating: 2
I don't know the US legal system, but in my country, the Constitution states that only those laws can be retroactive that are beneficial to the citizens, and do not put anyone at disadvantage.

RE: not Ex Post Facto
By theapparition on 6/28/2007 7:52:54 AM , Rating: 2
I'm not aware of any changes that can happen before they are written. However, I've seen where laws are written, that retroactively include past dates. I believe, it the case of tax laws, they have to post a statement of the intent to change the law, and the retroactive action cannot precede that statement of intent.

RE: not Ex Post Facto
By CollegeTechGuy on 6/27/2007 4:36:55 PM , Rating: 2
The problem is the constitution needs to be updated. Many of these laws were written decades and centuries ago. No one really though of Civil suits back then...they just classified everything as Criminal. I think it needs to be updated to incorporate Civil suits too.

RE: not Ex Post Facto
By TomZ on 6/27/2007 5:12:24 PM , Rating: 1
But what problem would that be solving? In other words, what problem exists in the legal system today that needs to be solved, that would be solved by updating the Constitution in the way you suggest?

I would think that updating the Constitution would be a huge undertaking, with tons of lawyers representing all interests arguing endlessly over each and every word of the changes.

RE: not Ex Post Facto
By PrimarchLion on 6/28/2007 1:51:54 AM , Rating: 2
At least C-SPAN ratings would increase.

RE: not Ex Post Facto
By theapparition on 6/28/2007 7:55:39 AM , Rating: 2
The constitution can be continually updated. (Damn, the fore-fathers of the US were brilliant and so ahead of their time) They are called ammendments. But, as you stated, it takes a LOT to pass an ammendment.

RE: not Ex Post Facto
By TomZ on 6/28/2007 8:45:36 AM , Rating: 1
Yes, it takes a lot to pass an amendment, can you imagine how hard it would be to generally "update" it as the OP suggested?!?

Royalty rates
By RaisedinUS on 6/27/2007 6:21:19 PM , Rating: 4
Ok, the rates are more than even XM radio and go something like this:
$500 per channel and then $.0011 per listener.
So, if you have a station that has 10 channels (rock, country, pop, etc) you pay $500(per year) for EACH one PLUS $.0011 per listener per stream per channel. Subject to increase of course. You can see how fast the total will mount. And if this isn't bad enough, this will be RETROACTIVE from last Jan 2006.
Do the math, it's amazing at the greed, plus, I doubt if much or ANY of these fees will actually go to the artists.
As a small station owner that makes no profit, even the fees for my one stream will force me to close.
We don't condone illegal downloading, in fact we urge the listener to buy the cd of the artist if they like their music. We also stream the artist name and title for each song, giving the artist more advertising.
If they snuff us out, who/what will be next? This is a thinly disguised power grab to force us from competing with the major labels. Remember these people? The ones that brought us Payola and Play for Pay?
Everyone needs to do what they can, even the non US citizens can send emails to Senators if only to voice your concern.
For more info:

Thank you,
Power Radio International

RE: Royalty rates
By FrankM on 6/27/2007 7:30:25 PM , Rating: 3
Although the article was quite long, it missed a very important point: this law would introduce the term "performance", which means a song played to a listener. So there's not only the base fee, the radios would also have to pay #songs×#listeners.

Oh and looks like my creative vein cannot rest, that "amazing the greed" gave me an idea, so:

Commemoration to the Day of Silence

Amazing Greed! (gone is sound)
That raped radios badly
It isn't just, so now we're sour,
The hogging that now I see.

Yours sincerely:
A hobby musician, who has played many times for many people, but never for money.

(c) 2007 Ferenc Martin
Distributed under GNU/GPL General Public License
etc XD

RE: Royalty rates
By RaisedinUS on 6/27/2007 8:28:27 PM , Rating: 2
You are correct but I might add, these rules will and are changing all the time so nothings set in stone as far as the rates are concerned.
I liked your diddy, send me a mp3 and I'll play it.

100% BS
By Nik00117 on 6/27/2007 4:02:22 PM , Rating: 2
You can't put a man in jail for doing something legal at the time that at the time of his conviction was illegal...

Example if the speed limit on a road at 60 MPH one day and I drove that 60 MPH one day I was in my legal right to do so. However the next day it was lowered to 55 MPH, as long as I drove that 55 MPH I shouldn't get in trouble, however then they wanna give me a ticket for going 60 MPH on a day in which it waslegal?

UH wtf?

RE: 100% BS
By KristopherKubicki on 6/27/2007 4:05:20 PM , Rating: 3
There is a difference between criminal and civil matters. This is completely civil, so your analogy doesn't work here. Royalties are one of the few civil matters that can be enforced retroactively given certain criteria.

RE: 100% BS
By theapparition on 6/28/2007 7:57:58 AM , Rating: 2
Your correct, but just for fun I have to point out that most towns use speeding fines as their own personal royalty program.

WTF, SoundExchange?
By Suomynona on 6/27/2007 4:07:08 PM , Rating: 2
SoundExchange said in a statement that if the bill passes, "artists would have to write checks to cover refunds to corporations whose CEOs and top executives are paid millions of dollars per year."

Do they really expect to be taken seriously with statements like these?

RE: WTF, SoundExchange?
By SirLucius on 6/27/2007 4:17:18 PM , Rating: 2
I had to stilfe a chuckle when I read that.

Don't be so quick to complain.
By dok405 on 6/27/2007 8:54:21 PM , Rating: 2
The RIAA, arguably the greediest and shadiest organization in America, is not doing itself a favor by backing these regulations. These regulations are going to get all the mass-marketed crap off the internet and give room for the independent artists (who actually care about their music) to show off what they have. I for one won’t miss the garbage that’s affected by this legislation (meaning the music, not the small station owners affected, of who I do respect).

By PitViper007 on 6/28/2007 9:12:22 AM , Rating: 2
The problem is that this is supposed to cover independents as well as the large, well known bands. That's part of what I find offensive about this new rate structure. You don't have to be a member of the RIAA to have them suck money from an online station for playing your music. To me this just smacks of Mafia tactics.


By tfk11 on 6/28/2007 3:01:27 AM , Rating: 2
Both organizations have said in the past that the music industry and artists suffer from the lack of revenue


It's a lack of common sense they suffer.

RE: please...
By Screwballl on 6/28/2007 11:49:54 AM , Rating: 2

Artists are suffering from lack of revenue?? Then how in the hell are they buying these multimillion dollar mansions and 20 expensive cars and donate a large sum (which is smaller than their daily tax payment) to charity.... They are doing millions of dollars in drugs and alcohol and then $50,000 per day drug rehab centers.

Sure, they were dumb and signed the contract for 5% of all revenue from their music sales (granted some sign from 3-50%). If this 5% is paying for the above, that means the greedy RIAA and MPAA and these type companies are making all the real money which is why they have such a strong voice.

How are these artists losing money? If anything, with the advent of iTunes and like sales forces, they are making more now than ever.

This legislation will only allow playtime for commercialized crap music and kill off independent musician exposure, much of which is a hell of a lot better than this commercialized Brittney and Paris and whatever else.

just GO DIE .
By excrucio on 6/27/2007 7:03:23 PM , Rating: 2
RIAA can go fu** them selves rich bastards.
SoundExchange, go die.

I live internet radio, i thank everyone that makes this possible so we can hear our music and cheer us up during the day. The small and usually best companies will die out because of these royalties.

Compare to AOL....DI.FM plays trance music which HALF THOSE SONGS ARE SUBMITTED BY THE ARTIST.

They should separate the royalties by type of songs or who makes them.

ex: Green day, you pay the royalties.

Unknown artist that submitts its song to played FREE.

or dont change jackshit.


New Way to Protest.
By spillai on 6/28/2007 11:41:20 AM , Rating: 2
Why dont you blacklist those big corporations and bring up new
artists through the internet radio. Same thing happened with Blog also, now people started to read blogs more than the news articles from big online news sites.
when they start to realise that they are loosing real money they will come to your knees.


O rly?
By therealnickdanger on 6/27/07, Rating: -1
RE: O rly?
By Topweasel on 6/27/2007 8:04:35 PM , Rating: 5
When the Nazis came for the communists,
I remained silent;
I was not a communist.

When they locked up the social democrats,
I remained silent;
I was not a social democrat.

When they came for the trade unionists,
I did not speak out;
I was not a trade unionist.

When they came for me,
there was no one left to speak out.

RE: O rly?
By RaisedinUS on 6/27/2007 8:33:35 PM , Rating: 2
Nothing's more true.

RE: O rly?
By therealnickdanger on 6/28/07, Rating: -1
"It seems as though my state-funded math degree has failed me. Let the lashings commence." -- DailyTech Editor-in-Chief Kristopher Kubicki

Most Popular ArticlesAre you ready for this ? HyperDrive Aircraft
September 24, 2016, 9:29 AM
Leaked – Samsung S8 is a Dream and a Dream 2
September 25, 2016, 8:00 AM
Inspiron Laptops & 2-in-1 PCs
September 25, 2016, 9:00 AM
Snapchat’s New Sunglasses are a Spectacle – No Pun Intended
September 24, 2016, 9:02 AM
Walmart may get "Robot Shopping Carts?"
September 17, 2016, 6:01 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki