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Increased royalty fees may force some internet radio stations to shut down

Over the last year, the online music industry has been in what many call as a major shakeup. Music artists and labels represented by SoundExchange say they are being treated unfairly, receiving less than a fair amount of money being generated by online radio stations. SoundExchange has been lobbying Congress over the last year to force online radio stations to pay for or pay higher royalties for songs played.

Working closely with Congress, SoundExchange has successfully convinced the industry that increased royalties are a necessity. The D.C. Circuit Court of Appeals has declined to put a stop on increased royalties. This Sunday, Internet radio stations will be slapped with a bill forcing them to pay higher royalties going forward and pay for music aired in 2006. By 2010, royalty rates will nearly triple what stations currently pay. Stations will also incur an annual fee of $500, but the annual fee hasn't been fully worked out. SoundExchange is unsure if it wants stations to pay $500 per station or per channel.

"This is just about the artists getting paid fairly. Artists and labels just want a fair share of the pie," said Richard Ades, a SoundExchange representative.

Late last month, many online stations banded together for a single day of silence, marking their stance against SoundExchange and its demands. Called "Day of Silence," the move created public awareness about how damaging the new proposed royalties could be. Despite the demonstration, SoundExchange chief executive John Simson said, the "rates are fair."

Tim Westergren, founder of Pandora, one of the largest Internet radio companies, said, although his company is able to pay for the new royalties he and his company would not go down without a fight. Pandora along with Yahoo, Rhapsody and Live365 represent the four largest Internet radio companies today. Whether large or small, all types of broadcasters will be affected. SoundExchange said it has taken this into account. Small and non-profit broadcasters will have a royalty cap of $50,000 per year -- still a very large amount.

"Nobody wins when Internet radio gets shut down, including artists who ostensibly are being represented by SoundExchange, the organization pushing for high rates. It's ironic. If SoundExchange gets their way, it means less money for musicians because people will cease to pay royalties all together," Westergren said.

Even with the cap, small broadcasters are still in distress. Michael Clark, owner of two small stations said that after Sunday, he would owe roughly $14,000 USD just for the holiday season of 2007. As for all the music that his station broadcasted during the 2006 year, Clark will owe $8000 on Sunday. One of Clark's stations already closed down because of the new changes and he was unsure of what to do after Sunday, he said.

Jake Sommers, owner of a similarly small station that plays jazz faced similar decisions and consequently closed down his station. Jazzplayradio.com closed on April 30th of this year when Sommers realized he would have to pay $2000 per month to keep his station of 20,000 listeners afloat.

"We never made a dime. It was a labor of love. Everything we made we put right back into radio station. It was a bunch of trumpet geeks playing music for other trumpet geeks," Sommers said.

As Patty Smyth once sang, "sometimes love just ain't enough."


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RE: Many of you are TOTALLY incorrect on the rates
By NYNoodle on 7/17/2007 5:57:11 PM , Rating: 3
First of all, I would just like to say that you're both amusing. It's been an interesting back and forth, but I would have to say that RaisedinUS is slightly retarded if he does not comprehend the points being made.

Actually, he's probably ignoring the points, because:
1) He knows he's wrong, and just doesn't want to admit it because it will make him look stupid (which of course makes him look ever more stupid)
2) He really doesn't care about the points and just wants to shout how he's smarter (sounds a bit Republican to me, they lack critical thinking in general as well)
3) He's good at being ignorant of the facts (already proven)

But it's an interesting read.

Oh and:
A sample size of 3000 is an EXCELLENT.
If you want 3000 to speak for 57 million, that's your problem.

Did you really want them to sample (keyword: sample) 57 million people? That IS stupid. That's what statistics is for (and just to be clear so you don't correct _is_ statistics as a category, not a group of numbers.)

get your calc out, what % is 1000 out of 300 million
300 million? Wrong, it's 57 million.

This one went over your head. 300 million = population of the US. Typical political poll ~ 1000-1500 sample. 300 million is wrong also, because more people vote for American Idol than for national elections. So they usually sample LIKELY voters (hard number to come up with, but let's say 30-40 million vote in presidential elections when it's interesting), so it's a sample out of 30-40 million (that 1000-1500.)

I want to point out something. But, i doubt you will. Instead you'll point out my capitalization or a typo or something.
For someone who doesn't care about caps, you sure used them more in the last rant. Did someone else write this for you or did you decide to care? Maybe your mom showed you how to "make a cap"? You get another gold star.
You are someone I want to be when I grow up. ./sarcastic


Ok, he was right on the caps/spelling vs. grammar. If you're going to get THAT nitpicky, it's Internet with a capital I. Stop typing internet, it's wrong.

I'm sure I could find more, but I just wanted to generally agree with Adam that RaisedinUS is a great example of what actually being raised in the US with today's education system means. Ignorance, non-critical thinking, and a tendency to try to fault others when the only one to blame is yourself.

Ta.


By wordsworm on 7/19/2007 7:07:07 AM , Rating: 2
quote:
Ok, he was right on the caps/spelling vs. grammar. If you're going to get THAT nitpicky, it's Internet with a capital I. Stop typing internet, it's wrong.
I've seen that the convention is capital I for Internet. But it feels wrong to me. It's almost like writing earth instead of Earth when all the other planets get caps. But, convention does not rely on anything but consensus.

I found it funniest when he blamed other posters for his faulty 10 cents per song point. Who would admit to being a lemming?


By NYNoodle on 7/23/2007 10:48:14 AM , Rating: 2
quote:
I've seen that the convention is capital I for Internet. But it feels wrong to me. It's almost like writing earth instead of Earth when all the other planets get caps. But, convention does not rely on anything but consensus.


Well, actually, there's a reason for the capital I. An internet is any type of interconnecting network. The Internet speaks about the one we all know and love. ;-). There are many internets but only one Internet. Of course, we usually know most people mean the Internet when they say "the internet".

As for earth, it's explained somewhere:
http://www.faqs.org/qa/qa-4756.html
quote:
I was recently asked, "Why is the earth not capitalized?" My answer: "It is not a name of a person. The other major planets are named after Greek/Roman gods.

I found that although earth was named after the Greek goddess, Gaea, its title still remains simply "earth".

My question: "Why do we not call earth Gaea, as we call all the other planets by their Greek/Roman names?"

Response
Earth is named after the Old English word eorthe, meaning "ground". Gaea is the goddess of the earth, who bore and married Uranus and became the mother of the Titans and the Cyclopes.


So really, we're just calling our lovely planet "ground", which does not get capitalized. If we started calling it Gaia or Gaea that would be different (damn those Japanese cartoons are popping into my head, FF.)


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