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Wednesday, June 27, 2007

Net Radio Royalty EXTRA -- UPDATES: David Byrne, Cover feature

Posted By on Wed, Jun 27, 2007 at 6:25 PM

June 27, 6 p.m. So the cover feature ran today (link to 'The Day the Music Dies'), which sucks cus I finally got respected musician and webcaster David Byrne to speak at length on the subject. Let's turn it over to Mr. Byrne.

"Internet radio.

One sure fire way to get ordinary folks to throw up their hands and “leave it to the pros” is to ...

make something seem incredibly convoluted and complicated, which is what has happened in the case of internet radio. The upshot will be * if the corporate types get their way- “it’s complicated, leave it to us big corporate radio stations- who will provide for your musical needs”. Funny how that works. Or doesn’t work. Yes, the new ruling implies that the artists will benefit- that the income for the licensing fees will trickle down. Uh huh.

Indeed, it would be nice if the artists got more money when and if income is generated by the use of their songs- but in most web radios that is simply not the case- they don’t have any income. Most of us do it for love-and there is some glory involved too. But there is no income to disperse. What this ruling will do is make the radios that make money (through advertising and payola) and those that don’t, equal- which is blatantly unfair.

This debate is actually about whether one should allow a populace to listen to multiple genres, styles and sounds- or be force fed a more limited “less confusing” selection of music. Don’t get me wrong- too much choice is a confusing thing, and an informed guide is essential on mountain slopes or amongst the mass of music out there. But I like to explore outside the mainstream from time to time- I like that as an option-and that’s what these amateur and NPR stations allow me to do.

My suggestion is that both can coexist. You should be able to have homemade, locally made juices and sodas, or Snapple or Coke too, if you want. One should never be allowed to drive out the other.

There are more musicians and artists outside the big 5 record labels, and therefore outside the RIAA, than there are inside. For the RIAA and others to claim that they represent recorded music is simply false- they represent big corporate interests- which is just fine, nothing wrong with that, but say so.



David Byrne Radio can be found by clicking on this link.

Thanks to everyone who helped with this story.

Lastly, the first congressional hearings on this issue occur tomorrow in the House of Representatives' Subcommittee on Small Business. It should be huge (with video streaming!).

Here's some of the speakers.

Washington, DC

10:00 AM EDT Thursday, June 28, 2007, 2360 Rayburn House Office Building


Full Committee Hearing on: Assessing the Impact of the Copyright Royalty

Board Decision to Increase Royalty Rates on Recording Artists and Webcasters

Witness List:

Bryan Miller

La La Media, Inc.

Palo Alto, CA

Tom Silverman


Tommy Boy Records

New York, NY

Joey Allcorn


Columbus, GA

Cathy Fink


Washington, DC

Kieran Kelly


Stunning Models on Display Records

Astoria, NY

Thomas F. Lee


American Federation of Musicians

New York, NY

Richard Eisworth

President, General Manager & CEO

Cincinnati Public Radio

Cincinnati, OH

Thanks, Fritz Kass - IBS - Intercollegiate Broadcasting System

IBS Student Radio Network (IBS SRN)

1,000 college/school radio stations/webcasters

UPDATE June 25, 9 a.m.: Like Times Square prior to Guliani, Internet Radio was once a dangerous edgy, little place. But that motherfucker just got rezoned like a red light district.

On July 15, out goes the funky dive bars full of cool music and no covers. In goes a Disney store and a Hard Rock Cafe. Don't like it? Hell's fire! But --- the metaphorical bar owners aren't going quietly into the night. They're fighting back in court and in Washington and they're 72 million strong.

Even more interestingly, they've allied themselves with the Disneys of Internet Radio -- AOL, and Clear Channel -- for an all-in gamble to settle the 15-year-old webcasting fight for once and all.

On June 27, the SF Weekly publishes another chapter from the gentrification of the web. A Wentrification Story. The neighborhood on the chopping block? The equivalent of 18th and Bryant St: low-rent, industrial, with bars and clubs and tech geeks galore. The chances of saving it? 60-40.

Advanced users: Read about tomorrow's net-wide "Day of Silence": Link to Release

Clock on to get up to speed and read last-minute highlights: -by David Downs

Hundreds of thousands of artists are owed an average of $365 in back royalties that the royalty collection board pockets every year. Become a member at SoundExchange to get your check.

Link to the SoundExchange unpaid artist list.

Local sites with a lot to lose:

Pandora (Oakland)

SomaFm (San Francisco Mission District)

Live365 (Foster City)

BAGel Radio (SF Inner Richmond)

Copyright Royalty Board Links:

Link to the Copyright Board that did it all.

The CRB's Royalty ruling (1st and last 20 pages most important)

The Rehearing Motion denial

SaveNetRadio links

The SavenNetRadio coalition web site

SaveNetRadio Release on DC Appeal

Link to GovTrack on Internet Radio Equality Act

Link to Radio and Internet Newsletter

SoundExchange Links

Link to SoundExchange

Link to SoundExchange Calling Relief Bill "money grab"

Link to SoundExchange's take on March 2 ruling.

Link to SoundExchange's take on March 2 ruling Pt. II

Link to SoundExchange's take on CRB Rehearing Denial

On Link to SoundExchange Rebuttal to Webcaster's numbers

Link to SoundExchange On Webcaster's consolation prize.

Net Radio Ratings and Data Links

Link to Internet Radio Research from Bridge Ratings

Link to Bridge Ratings Net Radio Listenership and demographics (based on 3,800 person survey)

Fiscal Analysis of Royalty Hike by Tom Cheney

Net Radio Press

Top Three Best Headlines for the Net Radio Story (in June)

Battle Royalty

Los Angeles Times, June 11, 2007

Pandora Strikes Back as Web 2.0 Demands, Jun 16, 2007

Can the music industry sue its way to profit?

Los Angeles Times, June 15, 2007

My last article on the issue in early April (before the hype, mind you) The Age of Dark Payola

Members of MusicFIRST Coalition present at kick-off press conference:

Mark Kadesh, Executive Director of musicFIRST

(Fairness in Radio Starting Today)

Martha Reeves, artist

Rob Garza, Thievery Corporation, artist

Phil Hawken, American Association of Independent


Hal Ponder, American Federation of Musicians

Terrie Bjorklund, American Federation of Television

and Radio Artists

Richard Burgess, Music Managers Forum

Daryl Friedman, The Recording Academy

Rebecca Greenberg (via phone), Recording Artists'


Mitch Bainwol, Recording Industry Association of


John Simson, SoundExchange


JUNE 12, 2007 The SF Weekly will print a story on June 27 detailing Internet Radio's "fight for life."

Royalty hikes threaten to sink stations like SomaFM, Live365 and Pandora (all local) before they even get started.

Their SaveNetRadio coalition has until July 15 to get legislative relief, go off the air, or start paying multiples of what they make.

Not a good business model.

Brush up on the story by reading "The Age of Dark Payola" at this link.

Now some questions I will be answering in the print feature on 6.27:

Are net radio stations just whining about a cost increase?

How much does it cost to create and operate a netstation?

What do they usually make?

Could they monetize better and make more money for artists?

What are the chances of legislative relief for netstations?

How independent is the Copyright Royalty Board?

Who stands to gain the most through hiked royalties?

And where do the artists stand on this stuff, as it's being done in their name?

We'll be updating this post as I go with links, interview excerpts and other ish.

-David Downs, Web Music Editor, Village Voice Music


June 15 UPDATE: Some Questions Answered

Are net radio stations just whining about a cost increase?

A little, yeah.

How much does it cost to create and operate a netstation?

Not that much.

What do they usually make?

On average, nothing. But some make millions.

Could they monetize better and make more money for artists?

Yes, but even the most monetized sites will go belly up, like Pandora.

What are the chances of legislative relief for netstations?

The Relief bill is not even out of subcommittee yet.

How independent is the Copyright Royalty Board?

It's independent, but its instructions came from RIAA.

Who stands to gain the most through hiked royalties?

No one that we know of. SoundExhange's royalty base will evaporate.

And where do the artists stand on this stuff, as it's being done in their name?

David Bern of the Talking Heads is in, Dave Matthews is in, along with about seven million no name bands. But big-label artists know where their bread is buttered. They're not going to fight for this. Right, Bono?

What about podcasts?

They already have to license songs directly.

Is this birth of pirate net radio?

Definitely, maybe.

Final wisdom I:

This fight is free PR for webcasters, and the biggest webcasting stations are ... yup, terrestrial broadcasters like clear channel, cbs, etc.

Final wisdom II:

This fight is free pr for RIAA's 4th push in 20 years to increase terrestrial radio royalty rates. Major newspapers in America has discovered this strange formula:

Percentage of gross revenue paid out as royalties by industry:

terrestrial radio: 2-5 percent

sat radio: 5-7 percent

internet radio: 100 percent after the rate hike. Hmm.

Final Wisdom III:

The fight between the radio lobby and the recording lobby will be huge, bloody and fun.

Please bookmark All Shook Down

Interesting LINKS:

Link to the Copyright Royalty Board where the rate hike decision includes lines about how the judges 'can't consider the industry ramifications'.

Link to a huge net radio usage survey by Bridge Ratings:I like the part about how the webcasting audience is all, like, 40-year-old males trapped in a cubicle somewhere, and listening to their commute broadcaster.

-David Downs

Web Music Editor, Village Voice Media -- SF Weekly


June 15 UPDATE pt. II

Thievery Corp and Warner to Big Radio: Pay Me

Today marks the launch of the Music First Coalition (which contains chunks of RIAA) and will fight for increased royalties from terrestrial radio broadcasters.

Their beef: it's not fair that all the other countries in the world have to pay performers AND composers for playing their song, but America doesn't.

The broadcaster's response: that's a 'performance tax' and we'll fight it. We help you sell sooooo many records when we spin your ish. Get off our backs.

Other notes:

This morning's Music First conference call starred: Martha Reeves and a dude from Thievery Corp. Yeah, like those two will be seeing major radio airplay ever again.

What Music First will do:

Lobby. "We've gone today to talk to members of Congress. As members are educated they understand how this works. We would expect that we'll have hearings on this."

What the labels get if royalties go up:

Half of anything collected.

The Executive Director of Music First dodged AP questions about his background. He is Mark Kadesh, former chief of staff for Diane Feinstein, and he distanced himself in an interview from her repeated introduction of the Perform Act (loathed by netties)

Awkward metaphor of the morning:

"If you go to KFC and order a chicken sandwich, KFC is paying for the chicken. We are a product. We are the main input for radio .. and we're not compensated," says Music first spokesperson.

Which makes Britney Spears, what, a cheap, cage-raised, drug-fueled, factory-slaughtered, machine-shaped, frozen-packed, deep-fried, America-poisoner? Sounds about right.

Why do this now:

"I don't know," said one member.


June 16 UPDATE pt. I

Lost in the noise over webcasting royalties going so high that it'll bankrupt the industry and throw Bay Areans out of work is the fact that royalty collector SoundExchange and the judges at the Copyright Royalty Board have a hard time paying artists. I hung out with Ted Leibowitz at Bagel Radio, and he said that SoundExchange hasn't paid anyone out since the beginning of 2006. And Communications Daily -- a D.C. trade publication -- said in the middle of last year that the Copyright Royalty Board is sitting on more than $1 billion due to artists because of bureaucratic sloth.

Other points from the most excellent Comm. Daily:

-- only one of the three CRB judges has substantial copyright experience.

--Court sessions are horribly low-tech for the future of music. No live video. No email announcement of agenda. If you want to view the transcripts you have to make an appointment and physically appear at the CRB. (If D.C. had a Brown Act, it sounds like it would've been violated more often than Paris Hilton at Rikers.)

--The two-year-old board appears underfunded and swamped with work.

Also the L.A. Times day by day battle between RAIN and SoundExchange is heating up.

Links to the June 11, June 12, June 13, and June 14 debates.

:::::::::::::: June 17 Update

--SoundExchange chief John Simson is on record saying his favorite net radio station is Pandora.

--An attorney for SoundExchange is on record saying the internet is a "cesspool of darkness."

-Spoke with Rusty at SomaFm. He says he’s “not vilifying the CRB. I’m vilifying the instructions the CRB has to follow.”

--Here’s a Flickr page of photos from SomaFM’s soon-to-be pissed-off fans

--Links to great local net radio stations:

--BAGEL Radio

--Live 365


--Radio Paradise

--All of SoundExhange’s PR

SoundExchange’s FAQ

Today I talk to the RIAA, the CRB, some local artists, visit Pandora and start the SF Weekly’s own radio station.

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