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Blog: Internet SoundExchange: Let’s Make A Deal for Small Internet Radio Stations
Paul R. Gathard (Blog) - September 14, 2007 1:18 AM

6 comment(s) - last by SWAG.. on Sep 17 at 12:31 PM

Paul R. Gathard's proposal for a new deal and self appointment as representative for small webcasters

(Editor's Note: Paul R. Gathard is president of Barnabus Road Media, a company that provides streaming radio services to several hundred commercial radio stations throughout the United States, Canada, and Europe, as well as several internet-only radio stations. Mr. Gathard has also served as an advisor to Small Webcaster Community Initiative. As such, Mr. Gathard is in a unique position to understand the needs of both commercial and non-commercial webcasters, and has proposed a royalty solution he sees as reasonable as it is equitable.)

Apparently, large webcasters have DiMA, or Digital Media Association, and NPR, or National Public Radio, has its own negotiating arm to represent them respectively. In as much as small Internet radio broadcasters have no representation by any recognized trade group; I, Paul R. Gathard, accept the position as the self-appointed negotiator for this unrepresented group.

Therefore, SoundExchange, you now have a small webcaster representative in which to conduct negotiations for both small non-commercial and commercial webcasters. There is no membership requirement or fees to be paid by small webcasters for my services. Be advised I have no money to use to lobby Congress or to purchase public relations services.

I simply agree to press SoundExchange to negotiate a settlement with small webcasters not represented by other organizations. I don’t know if SoundExchange will even accept my representation of small webcasters, but at least I have a face, a voice and ideas on the subject. I care deeply about Internet radio and my company hosts hundreds of Internet radio stations broadcasting on the Internet.

Last week, I spoke with a staff member (unnamed) in Representative Jay Inslee’s office and I was encouraged that the Congressman intended to press ahead in trying to get the Internet Radio Equality Act moving forward, but my hope for the act being passed anytime soon is small. Final action could come too late for most small Internet radio operations.

Small webcasters need to have a deal negotiated today so they can avoid copyright royalty bankruptcy. Their interests have been neglected by other organization in deference to their own more enlightened self-interests. I guess this is appropriate, but my previously unrepresented webcasters will die unless Congress steps in and becomes their de facto negotiating representative. Since it also appears Congress will not act in a timely enough way, I humbly submit myself to this previously unattended role.

Consequently, I now present my initial negotiating points on behalf of my freely adopted Internet radio constituents:

Commercial Internet Radio Stations

Minimum Annual Fees:

$500 for the first channel, thereafter
$100/ channel (maximum minimum annual fee = $10,000)

Reporting Basis:

ATH Aggregate Tuning Hours – all years (Aggregate channel reporting)

Transition Year 2006:

No change in rate – amount paid accepted

Unified Rate Years 2007-2010:

$0.00416/ATH
Example 10,000 ATH/mo x .004166 = $41.66/mo or $500 annual
Example 50,000 ATH/mo x .004166 = $208.30/mo or $2,500 annual
Example 100,000 ATH/mo x .004166 = $416.60/mo or $5,000 annual

Non-Commercial Internet Radio Stations

Minimum Annual Fees:

$500 for the first channel, thereafter
$100/ channel (maximum minimum annual fee = $10,000)

Reporting Basis:

ATH Aggregate Tuning Hours – all years (Aggregate channel reporting)

Transition Year 2006:

No change in rate – amount paid accepted

Unified Rate Years 2007-2010:

$0.00084/ATH
Example 49,595 ATH/mo x .00084 = $41.66/mo or $500 annual
Example 100,000 ATH/mo x .00084 = $84/mo or $1,008 annual
Example 250,000 ATH/mo x .00084 = $210/mo or $2,520 annual

This is my starting negotiating points for SoundExchange to consider.

What say ye SoundExchange?

It’s a little different game now that small webcasters have a self-appointed representative to negotiate on their behalf… isn’t it SoundExchange?

Are you scared yet? Or, are you going to maintain your hard line and simply point to the March CRB ruling and tell all of my constituents, “Sorry for your luck? Goodbye.”

If you really want to prove to Congress you are serious about negotiating with small webcasters, then counter my proposal and let us see if we can find a compromise. As far as I can tell, I am the only party stepping forward on behalf of small webcasters. So, deal with me.

Let’s get it on… we all want to get back to work.

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transition

By Verran on 9/14/2007 11:12:27 AM , Rating: 3

The tone of the letter really seems to change after the pricing scheme is laid out. The beginning is very humble and comes off as genuinely trying to find a compromise to make everyone happy. After the pricing, it comes off as very aggressive, almost belligerent with lines like:

quote:
It’s a little different game now that small webcasters have a self-appointed representative to negotiate on their behalf… isn’t it SoundExchange?

quote:
Are you scared yet?

quote:
Let’s get it on…

It almost seems like the two parts were written by different people or something.

RE: transition

By TomZ on 9/14/2007 11:22:40 AM , Rating: 2

Yeah, I agree, and I wonder if such an agressive tone is really an effective way to propose beginning a negiotiation process.

Parent

A major problem...

By Screwballl on 9/14/2007 11:00:58 AM , Rating: 2

... is that SE is going after ALL broadcasters, even if they have previous contracts with the independent labels and pay them directly (if I read the publicly available documentation correctly). SE is requiring all money be paid through them and they will pay out to the artists accordingly, and apparently if a label is not contracted to SE, they pocket the money.
This is the major problem. Many small labels and independent groups/singers either do not have any contract or they make so little that getting setup with SE will basically mean they see no money coming in at all.
The extra money asked for by SE, MPAA and RIAA is going to be lining their own pockets, not the pockets of the artists which is why SE and the others needs to be shut down or shut up, not negotiated with. No matter what the outcome, negotiating with the devil still means you will end up in Hell, the negotiation is just a matter of how long until you get there.

SoundExchange

By ancient46 on 9/14/2007 11:25:08 AM , Rating: 2

From the tone of your article I don't believe you expect any negotiations to proceed and neither do I. I don't think SoundExchange and their ultimate backers want Internet Radio or Internet anything to succeed. I think the potential freedom of music distributed on the Internet scares the heck out of them. They want to crush it before it gets out of their control, not negotiate to keep it alive.

A new generation of Internet savvy and digitally aware music creators is their own worst nightmare. Once you can, at a reasonable cost, digitally enhance a garage digital recording to sound as if it were recorded in a studio, get your music heard on Internet radio, and sell it from a website, their entire business model is history. Artists touring digitally from their home arenas over high speed connections is a possibility that is frightening for the current business model. If you don't need big money to reach your consumers then they are not necessary. If they negotiate in good faith it probably will be the death of them.

seems fair

By Moishe on 9/14/2007 4:09:01 PM , Rating: 2

The rates you lay out seem fair and I like how they are different for commercial and non-commercial stations. It's a good starting point.

I do think the tone at the end should be left off. Even if the SE people aren't expected to accept this or capitulate in anyway it's better to be completely above-board and business like. Let them bury themselves and give no one any legitimate reason to dislike or disagree with you.

Total Frustration?

By SWAG on 9/17/2007 12:31:26 PM , Rating: 2

It seems the writer of this blog is totally frustrated with Congress, SoundExchange, and the RIAA.

Or better yet, the writer really doesn't want to negotiate with SoundExchange. Maybe the whole idea was to point out the idiotic concept of having to appoint oneself the industry negotiator, come up with a rate structure and then actually give any sense of reality to the idea that SoundExchange would actually negotiate with anyone from the small webcaster community.

Just like the war with radical jehadists, you cannot negotiate with someone bent on your destruction. It appears the only salvation left giving any hope at all to small webcasters is for the US Congress to move at light speed to overturn the CRB Ruling and pass the Internet Radio Equality Act.

This blog seems to be more of a taunt than a real offer to negotiate with SoundExchange. The small webcaster industry needs a long term solution so that this madness can be avoided in the future.

No webcaster should accept the meaningless SoundExchange offers made to webcasters of any size. The entire concept of having to negotiate with the the RIAA who is trying to control an entire up and coming multi-billion dollar industry is flawed from its outset.

Congress created this mess and Congress needs to clean it up. This whole CRB process has been orchestrated and used to the advantage of the RIAA and its minion SoundExchange. Can anyone really deal with an organization like this? I don't think Mr. Gathard thinks it can be done.