DailyTech - SoundExchange: Who Won the War?

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Blog: Internet SoundExchange: Who Won the War?
Paul R. Gathard (Blog) - October 15, 2007 1:02 PM

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6 comment(s) - last by Melted Metal W.. on Oct 17 at 10:52 AM

Paul R. Gathard discusses the aftermath of the SoundExchange Copyright war

(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.)

The March 2007 Copyright Royalty Board decision threw the entire Internet Radio industry in the United States into a panic and hope sprung eternal until just last month. It appears the war is finally over for now.

Who won the copyright royalty rate war? Well, I would venture a guess that SoundExchange thinks it won the war. They still have their miserably high CRB imposed “per-song played” rate intact today.

Many commercial webcasters are packing it in and calling their Internet Radio broadcast finished. Some may even file bankruptcy over retro-royalty payments now due. These are losers in this war.

Many Internet Radio listeners will no longer to be able to go online and hear their favorite online broadcast. These too are losers in this war.

Many Indie artists will no longer have a place for their music to be played. These too are losers in this war.

I see only one bright spot and winner in this war, other than the RIAA that is. That winner is small and medium sized non-commercial webcasters and simulcasters. Religious and educational webcasters are no worse off if they webcast 159,140 or less hours of music each month.

This may seem like a small blessing, but some recognition was given by the CRB ruling to the special nature of this very important segment of music webcasters. Religious music has never been a big seller for record labels and radio play still has a very big impact on religious music sales. I guess leaving this group alone really makes perfect sense to record companies.

Most radio stations in this genre do not produce very large online audiences unless they are the top stations in this genre located in a large metro-market. Profit is not the motivation behind these radio station operations and there is little excess revenue for record labels and artists to tap for additional copyright fees.

This genre is, more often than not, directly listener supported. The recording industry truly has nothing to gain and everything to loose by financially hurting this genre of music. I only hope this slower than mainstream group of technology adopters embraces the advantage they have been given in low copyright royalty rates and runs up their audience size right to the limit of their low rates.

Non-commercial webcasters and radio simulcasters should thrive while they can as the RIAA wolf may still be hungry after it has eaten all of the fat webcasting losers of this copyright royalty war. There is only a little over two years before the war begins again.

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Funny

By TomCorelis

(blog) on 10/15/2007 3:56:01 PM , Rating: 2

I personally predicted doom and gloom, but it seems so far that the stations that I frequent have not really been affected. These are radio stations that play music from the so-called "underground" but they have a high listenership relative to the size of that given music scene. BassDrive.com, di.fm, Proton Radio... I haven't noticed any of these stations skipping a beat (hehe, pun) with their broadcasts.

One may argue -- as Proton did in my interview with them -- that their private arrangements with individual, fragmented labels, preclude any kind of obligation to SoundExchange. I'm curious to see whether SoundExchange will honor that or will demand royalities anyway.

RE: Funny

By HaZaRd2K6 on 10/15/2007 6:56:17 PM , Rating: 2

Me too. I've even noticed that DI.fm has a few "Premium" channels available for public use (for those who couldn't figure it out, the premium channels are paid-for, higher-bitrate and ad-free). Strange. But I guess it'll take some time to see the effects of the new rates.

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RE: Funny

By ThereIsNoRadio on 10/15/2007 10:55:16 PM , Rating: 3

All internet radio stations are affected. We are all still broadcasting under the deal with SoundExchange that extended the due date for the current royalties and lets us continue to temporarily pay based on percentage of revenue. If you want to keep your favorite station, call your congressmen and tell them that anything less than the Internet Radio Equality Act guarantees we return to their offices in 2yrs with the same problem. Don't be fooled by the fact that we are still on the air. We are still fighting for our lives and could be forced to shut down due to bankruptcy at any time. You would expect a website called DailyTech to have more of a clue than is shown in this article. Do a little research and maybe interview some people. There have been several press releases by webcasters and SaveNetRadio rejecting SoundExchange offers just in the last few weeks. Articles like yours, declaring the war over, work to the advantage of SoundExchange. On further investigation, the company Barnabas Road Media, Inc. is a major broadcaster that is calling a victory here in this "article", which is just a copy/paste of their press release. You might as well post SoundExchange propaganda.

The war is not over. There have been no winners. Call your congressmen and tell them to support the Internet Radio Equality Act HR 2060 and S 1353.

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Pandora, Rhapsody, and Live365

By Enoch2001 on 10/15/2007 11:24:12 PM , Rating: 2

Just as long as those 3 companies keep operating as usual, I'm a happy camper. I realize many small stations that were on Live365 were forced out of business, but the selection still seems astronomically large as of right now.

RE: Pandora, Rhapsody, and Live365

By Frallan on 10/16/2007 8:58:42 AM , Rating: 3

Pandora is under heavy preassure. So heavy that all non US listeners are shut down. So dont fool yourself to believe that it will remain open.

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Webcasters Are Still In A Powerful Position

By Melted Metal Web Radio on 10/17/2007 10:52:48 AM , Rating: 2

The way the game has been played by SoundExchange (SX) is of the same style of big business on Wall Street, and in political players in Washington DC. This is incredibly effective in the short term.

But, the reality is that any public position must have the support of the general population to become the norm, and the general population can see something wrong with the strategies and tactics of SX, and their supporters.

For the moment, SX has tactfully maintained the status quo. But the political season, and public sentiment, is against them. Over the next 6 to 8 months you will see webcasters in a, solid, positive, position.

Besides- the labels are about to be distracted by the likes of Madonna and Radiohead, who have made blistering action-statements that major labels have little place in their future.

http://www.meltedmetal.com/scorch/save-net-radio/
http://www.meltedmetal.com/

Melted Metal Web Radio

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