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Don’t believe it ... small webcasters will continue to fight SoundExchange

(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.)

Unfortunately, it may be a fight to the death for small webcasters unless the US Congress takes up the cause of small webcasters and pass the Internet Radio Equality Act.

Although one cannot imagine large webcasters (AOL, Yahoo, Live 365, MTV, Pandora and Real Networks) really liking the deal they struck with SoundExchange, their ability to afford more financial pain than their smaller webcaster counterparts probably gave them a small bit of joy. The acceptance of the SoundExchange deal means none of their now smaller competitors will be able to play in their digital universe in the future.

Who could blame these larger webcasters from accepting a deal with SoundExchange that, under other circumstances, would be considered a matter for the Justice Department as a possible anti-trust violation? The agreement was a stroke of brilliance and a sweet deal for both parties. SoundExchange got what they wanted (a new world-class benchmark copyright rate for performance royalties) and large webcasters got to pull the up-start small webcaster weeds from their Internet radio garden.

The war is not over. Thousands of Internet radio stations and broadcast radio stations still desperately need Congress to come back from their summer recess and reset the playing field so small Internet radio operators will have a fighting chance to avoid bankruptcy. Absolutely no reasonable relief has been offered to small webcasters by SoundExchange.

The SoundExchange offer to extend the 2002 Small Webcaster Settlement Act could be likened to organized crime coming to your store and stating that if you didn’t pay up, they would bust up your store and put you out of business. And then, if while under this extortion you somehow managed to grow your business, this gang would come back and demand 10 times more. Webcasters and broadcasters have to stand together and continue to push the bully out of their neighborhood before it is too late.

All that small webcasters are asking Congress to do is to not let the RIAA and SoundExchange line them up against a wall and shoot them. Does that sound too dramatic? It is not too dramatic. SoundExchange has demonstrated their desire to cleanse the digital airwaves of Internet Radio stations because the RIAA no longer wants them to exist.

This callous behavior is equivalent to an Internet radio bloodbath exacted upon the weaker and poorer Internet and broadcast radio stations. This is a digital genocide set up by Congress when it gave SoundExchange the power to execute small internet broadcasters based upon the Copyright Royalty Judges reasoned “no right to live” decree.

If an Internet radio operation could not pay their determined “fair market” copyright royalty rates, then that Internet radio operator had no business being in the Internet radio business. Of course the flaw in this final decision is that “willing buyers and sellers” do not negotiate deals they know will bankrupt themselves in the real world.

The Copyright Royalty Judges basically acted without compassion as they followed the letter of the law handed down by a Congress, who could not have foreseen the carnage their decision would cause.

Congress gave SoundExchange this “Death Star” power over the fate of small Internet and broadcast radio simulcasters. It is my most humble plea that Congress set aside the CRB ruling and level the playing field again. The Internet Radio Equality Act may go too far in the other direction in favor of large webcasters, but there is a better way to end this conflict than the death of an industry just starting to realize its potential. I guess it is this very potential that scares the RIAA and the bigger webcasters.

Small webcasters have no money for lobbyists or big PR campaigns, but we, like all Americans, have a right to life, liberty and the pursuit of happiness. Running our Internet and broadcast radio stations just happens to be the way we make ourselves and our listeners happy. So, if our Senators and Representatives could take some time to simply protect the rights of the little guy and save us from digital genocide, I personally will vote for and sing the praises of those stepping up to say “enough is enough”.

We want the war to be over, but we don’t want to be the only casualties left on the battlefield.




"I'd be pissed too, but you didn't have to go all Minority Report on his ass!" -- Jon Stewart on police raiding Gizmodo editor Jason Chen's home
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