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Music Media The Almighty Buck

Study Says $2.3B in Net Radio Royalties by '08 102

Posted by CowboyNeal from the biding-their-time dept.
An anonymous reader writes "According to a newly published report, the music industry will have a nice pile of cash to collect from net radio owners in 2008 — a staggering $2.3 billion to be exact. The report is based on current performance royalties paid by terrestrial radio vs. internet radio, and taking into account projected growth in listenership. Meanwhile, the corporate Clear Channels pay just $550 Million for broadcasting the same songs we've all heard before. Hardly a fair deal."
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Study Says $2.3B in Net Radio Royalties by '08 More

Study Says $2.3B in Net Radio Royalties by '08

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  • screw them (Score:2, Informative)

    by jacquesm ( 154384 )
    That's why I built my latest little project. MP3's by the boatload, napster
    squared. with storage approaching $400 / TB why not copy *ALL* the music ?

    MP3 is the standard, no matter what the big corps want you to believe.
    this mp3 file sharing system [mxchg.com] will merge two collections seamlessly
    and remove doubles, you can tag your files and if you have a band you can
    use this system to spread your music to your fans. It's just another CDN,
    but one that is based off KNOPPIX, so it comes with all the power of a
    full Linux

    • Re: (Score:1, Funny)

      by Anonymous Coward
      neat, that's like a terrorist-cell organization for music piracy.

      I'm curious how the RIAA would bust that one... looks watertight

      But I'm not sure that's what you meant when you built it :)

      you could sure use a web designer though ...

      • Re: (Score:3, Interesting)

        by jacquesm ( 154384 )
        let's just say not having a single point of failure was a design feature because I didn't
        feel like becoming the focus of an attempt to shut down the 'network'. Also because it is
        not technically intended to do that (just like a hammer is not technically intended to be
        a weapon) I think there is some wiggle room.

        But this advanced 'sneakernet' feature (which works just fine across the net as well, you
        basically only need to have two media exchanges near each other during the initial install,
        after that the traffi
    • "MP3 is the standard, no matter what the big corps want you to believe."

      ClearChannel broadcasts MP3s, with titles encrypted in a vain attempt to prevent wholesale internal copying. Unfortunately, CC treats its IT employees so poorly that the few "old-timers" (4+ years) have banded together to defeat the encryption. They just want to browse the library and augment their own MP3 libraries. Disclosure: I just happen to have been a contractor with a firm that successfully raided CC's IT department to fill the d
      • very interesting, I'm curious if that's ever going to be accessible in a mainstream way.

        btw there are harddrive images with about 160 G of billboards hot 100 over the last decades
        floating around, I think the RIAA is really underestimating the threat of the sneakernet.

        - untraceable
        - much faster than the internet
        - no damaged files.

        not to mention all those storage devices that are somehow selling above market value
        on sites like ebay (ipods too). Makes you wonder what's going on with that.
    • why not copy *ALL* the music

      Because theft is wrong. What part of this is difficult?

  • Two things... (Score:4, Insightful)

    by El Cubano ( 631386 ) on Saturday March 10, 2007 @10:58AM (#18299612)

    According to a newly published report, the music industry will have a nice pile of cash to collect from net radio owners in 2008 -- a staggering $2.3 billion to be exact. The report is based on current performance royalties paid by terrestrial radio vs. internet radio, and taking into account projected growth in listenership.

    First, this assumes that everyone will pay the new fees instead of finding alternative unlicensed content (that is free or Creative Commons or other similar content).

    Meanwhile, the corporate Clear Channels pay just $550 Million for broadcasting the same songs we've all heard before. Hardly a fair deal.

    Second, it is fair. It is called economies of scale. Clear Channel deals is huge quantities. To put it another way, if you go to a local corner market and buy a pack of four rolls of toilet paper for $2.00, then you go to Costco and see the same brand of toilet paper in a box of 40 for $10.00, is that unfair? No, it is called purchasing in bulk. Same as the sort of thing that MS does with corporate VLKs versus regular retail prices.

    • Re:Two things... (Score:5, Informative)

      by FlatCatInASlatVat ( 828700 ) on Saturday March 10, 2007 @11:08AM (#18299674)
      Second, it is fair. It is called economies of scale. Clear Channel deals is huge quantities. To put it another way, if you go to a local corner market and buy a pack of four rolls of toilet paper for $2.00, then you go to Costco and see the same brand of toilet paper in a box of 40 for $10.00, is that unfair? No, it is called purchasing in bulk. Same as the sort of thing that MS does with corporate VLKs versus regular retail prices.

      Wrong on two counts. Clear Channel and all other FM radio stations pay NO performance royalties. Yet the new rules would have inernet radio pay HUGE performance royatlies, relative to their revenues. (Both pay artist royalties. )

      Also, much of the reason that the toilet paper costs more at the small store is because of local overhead. The suppliers charge somewhat higher rates to the little guys, but not many times as much, as is being proposed in the new rules from the Copyright Office.

      • Re:Two things... (Score:4, Informative)

        by Anonymous Coward on Saturday March 10, 2007 @11:49AM (#18299908)
        Sorry bud, but the stations pay fees based on the estimated number of listeners (as part of the calculation, they multiply two other variable by that estimate). I would call that performance based.

        -1, no link handed to you
        +1, this was left out of article
        +4, TRUE

        Also, Neal let the phrase "just $550 million" in the summary, referencing 25% of the total internet radio revenue. Too much? Too little? "Just" is a blatant pejorative here.

        Why allow overtly biased statements in such a stupid way? We expect more cunningness.
        • No, you're wrong. Broadcast radio station's pay to the copyright holders of the lyrics, ASCAP. They don't pay the copyright holders of the performances, record companies, et al.

          Altogether, ASCAP earned $785 million in revenues last year. [ascap.com] That's from all music streams, radio, internet, live performances, etc.

        • You're wrong. The parent poster perhaps used the wrong term -- he should have said "FM stations pay no sound recording royalties" -- but you are incorrect in saying that FM stations pay them.

          Over-the-air stations do pay royalties, but only one set of them. They pay for the right to use the musical compositions that they use, but they have been given a free pass on paying for the right to use the actual sound recordings. This isn't a new thing, either -- it's been this way for years and years.

          Inter

          • better than that most Radio stations get some form of Payola to the tune of a few hundred dollars a spin.. so they actually MAKE money playing music!!!

    • Re: (Score:2, Informative)

      by Anonymous Coward
      will pay the new fees instead of finding alternative unlicensed content

      CARP created automatic royalties for ALL online music. Regardless of what you pay, you are legally required to pay RIAA's SoundExchange these automatic royalties, and it's SoundExchange's job to pretend to give that money to the artists. Same thing for bands that cover music, they pay automatic royalties regardless of what they're playing.

      it is called purchasing in bulk.

      Intellectual property does not occur "in bulk". One does not buy

    • Re: (Score:3, Insightful)

      by Shelled ( 81123 )
      "Second, it is fair. It is called economies of scale."

      Correct in a sense, unfair laws do scale up with larger users. The 'fair' notion relates to the fundamentals principles behind the collection of royalties, the 'size' part was using an example to demonstrate it taken to obscene levels. You missed the point entirely. Since you're fond of examples, the tools and labour used to build the studios artists record in contribute greatly to their art, so you agree with Craftsmen, Mikita and the local unions gett

    • Re: (Score:2)

      by Jahz ( 831343 )
      Economies of scale really does not apply to royalties. The internet radio community can grow 100 fold next year and will still have to pay the same amount. This is really just an example of big corporate interests and evil lobbying.

      The terrestrial radio world has sucked for a long time, and now they're seeing market share get eroded away on all fronts. In cars, some people are turning to satellite solutions. At home/work and work, internet radio is a great solution since it provides better playlists and
    • First, this assumes that everyone will pay the new fees instead of finding alternative unlicensed content (that is free or Creative Commons or other similar content).

      It assumes that the majors will remain the majors: free to draw on over 100 years of recorded music. Elvis may go out of copyright in Britain - but the master recordings still belong to his label.

      • Re: (Score:2, Informative)

        by broohaha ( 5295 )

        First, this assumes that everyone will pay the new fees instead of finding alternative unlicensed content (that is free or Creative Commons or other similar content).


        This also assumes that internet radio companies will remain in business to pay those fees. It's likely that many cannot. www.radioparadise.com's argument is that they will not be able to afford to continue operating if this were to happen.

        • Re: (Score:1)

          by Etobian ( 693918 )
          Maybe that's the intent of RIAA - to take internet radio down. They don't REALLY expect a $2.3b winfall. What they want is control. Terrestial radio gave it to them...limited exposure to non-mainstream artists, and CD sales were concentrated on the artists they wanted to push. What they don't want is a fragmented audience.
        • This proposal is an incredible increase for a small web broadcaster like

          http://somafm.com/ [somafm.com]

          Without my soma, I won't want to play sex games with all the other children.

          "All citizens are expected to be involved socially; spending time alone is discouraged and sexual promiscuity is norm. Recreational drug use has become a pillar of society and all citizens regularly swallow tablets of soma, a narcotic-tranquilizer that makes users mindlessly happy."

          Ref: http://en.wikipedia.org/wiki/Brave_New_World [wikipedia.org]

    • Re: (Score:1)

      by RonVNX ( 55322 )
      It also assumes that they're not going to put most of the Internet radio industry out of business, which is the most likely outcome. Even loan sharks understand you don't collect anything from the dead, apparently the RIAA and friends haven't got the sense of a common street thug.

    • Re: (Score:1)

      by Talchas ( 954795 )
      You do realize that economies of scale are pretty meaningless when dealing with data over the internet, right?

  • huh? (Score:5, Insightful)

    by mastershake_phd ( 1050150 ) on Saturday March 10, 2007 @10:58AM (#18299616) Homepage
    Are they trying to make money or shut down internet radio? I was under the impression that most internet radio stations were run for fun, not profit.

    • Good question (Score:5, Insightful)

      by NetDanzr ( 619387 ) on Saturday March 10, 2007 @11:14AM (#18299714)
      And the answer is that they are trying to shut down Internet radio. Consider this: currently, you can connect to the Internet almost anywhere with certain data packages from cell phone carriers. Soon, in major metro areas you'll be able to do the same via municipal WiFi or mesh networking. Some people have been streaming Internet ratio [garyturner.net] in their cars for years, so fully Internet-enabled car stereos can't be far behind. This is a situation that gives Clear Channel and other large radio companies nightmares: the ability of people to choose from thousands of commercials-free radio stations instead of being stuck with the same selection of ten traditional stations.

      • Re:Good question (Score:5, Insightful)

        by Abcd1234 ( 188840 ) on Saturday March 10, 2007 @11:33AM (#18299822) Homepage
        As it happens, this also further damages traditional media business models. Right now, with their control on distribution, the large media companies can use their clout to promote artists they believe are mass marketable. Internet Radio, on the other hand, fractures their market, because smaller (or worse, independant) artists may get more airplay. It also means their current payola schemes no longer work... how can you buy off thousands of internet radio stations running out of people's basements?

        In the end, the only people Internet Radio helps are the small artists and the music-listening public. Unfortunately, neither of these groups has much lobbying clout, and so we see ridiculous outcomes like this.
        • how can you buy off thousands of internet radio stations running out of people's basements?

          Hot pockets?
        • The ultimate beneficiary in this may end up being XM-Sirius (or Siruis-XM, whatever they'll call themselves). Internet-based radio will likely need to be a paid service with a pricing point similar to satellite. This means that propietary content will be the deciding factor for consumers and satellite just might have a chance of surviving.
    • If internet radio sends only a single copy of the music (At the new low low price of $.0008 per performance) And then sends play lists. The radio station has only played it once. How long it is "cached" on the user's computer is not something the radio station need to deal with. Once "cached". Under fair use it can be put on iPods and other media players.

      Looks like a good deal to me.
    • Are they trying to make money or shut down internet radio?

      Apparently shut down internet radio in the US.

      Personally, I like to listen to http://ebm-radio.de/ [ebm-radio.de] and various other European types. I even have a Moscow Russian station which I listen to every now and then on my audiotron at home.

      Although, copyright might affect most of those in the states and then some major stations in EU and Eastern Europe, most of the artists that fall under those stations aren't American artists or under RIAAs jurisdictions.

      I c

    • I am of the opinion that they are trying to shut down Internet radio in an effort to keep their stranglehold on the market.

      Back when Live365.com first started, I was one of the founding broadcasters and I ran a very popular stream called Hair's To The 80s Internet Radio. For the first couple of years (the exact time frame escapes me) everything was free and advertiser supported. Live365 also had a neat feature where you could click on the song title and be taken to their online store to purchase the album t

  • Yea, I don't think so... (Score:5, Insightful)

    by Anonymous Coward on Saturday March 10, 2007 @11:01AM (#18299626)
    That projected growth is on the tacit assumption that folks will pay more for the same product -- and they won't, The broadcasters will either raise fees or shut down entirely. Either way listenership goes down.

    There seems to be the gross assumption that Internet radio is insanely profitable. While it certainly enables small producers an outlet for their work vs conventional broadcasting, they still tend to have small audiences with niche markets.

    RIAA just needs to keep pushing until all we listen to is pirated, ripped MP3s all day, everyday.
    • live365 and others will go the way of the dodo. Don't you just love how incredibly stupid these music execs are?

    • Re: (Score:2, Insightful)

      by Loconut1389 ( 455297 )
      Didn't we already do this once? I recall in the last 90's a bunch of stations had internet streams and then the RIAA/etc started pulling rank and they all vanished. Only now are they coming back, won't this just make them disappear again?

      Forgive me if I missed something, I'm just an average consumer and that was my perception.

      • Re:Yea, I don't think so... (Score:5, Informative)

        by Abcd1234 ( 188840 ) on Saturday March 10, 2007 @11:39AM (#18299848) Homepage
        It was actually back in 2002, all thanks to the DMCA CARP ruling. The SomaFM About Page [somafm.com] covers what they went through during that time. Now, with the latest fees, they're looking at about $1 million in royalty fees for the year of 2007, compared to $22,000 for 2006.

        And all this just as I started listening to them... thanks a lot, Copyright Royalty Board. Assholes.

        • It was actually back in 2002, all thanks to the DMCA CARP ruling. The SomaFM About Page [somafm.com] covers what they went through during that time. Now, with the latest fees, they're looking at about $1 million in royalty fees for the year of 2007, compared to $22,000 for 2006.

          And all this just as I started listening to them... thanks a lot, Copyright Royalty Board. Assholes.

          Actually the fees are retroactive to 2006, so they still owe $1m for 2006, they just did not know that in 2006. This is ridiculous.

          -Em

          • Re: (Score:2)

            by Tassach ( 137772 )

            Actually the fees are retroactive to 2006
            So much for the Constitutional prohibition against ex-post-facto laws. Somebody needs to fight this in court, it's blatantly unconstitutional.

            • So much for the Constitutional prohibition against ex-post-facto laws. Somebody needs to fight this in court, it's blatantly unconstitutional.

              I don't think this is a law and thus not unconstitutional - however it could be illegal business practice.

              Personally, I think retroactive pay-per-play (payola laws do not cover Internet!!!) fees are in order. RIAA now owes us 10 cents per song per listener we have played since station's beginning in '95. That should be a few trillion dollars.

              While above is a joke, I think pay-per-play IS the answer to this. Let internet station CHARGE RIAA artists for playing their songs. If internet has so many listeners,

        • I'm with your there. I'm listening to Boot Liquor from SomaFM right now. Other than Willies Place, Country X, on XM it's the only place to find newer honky tonk music. With traditional radio all you get is the B.S. coutry pop of Tim McGraw, and Shania Twain.

          Granted alot of these new female country singers can carry a bit of a tune, and some are great to look at. It's just twangy top 40 pop music.

    • Re: (Score:2)

      by mi ( 197448 )

      RIAA just needs to keep pushing until all we listen to is pirated, ripped MP3s all day, everyday.

      Illegally...

      That really is no small addition. The advice to stop pushing applies to RIAA only, who is unlikely to be reading these pages anywa.

      You, on the other hand, seem to justify illegal behavior. And not just illegal, which is not in itself necessarily wrong, but immoral too.

      If you don't like the way the music is sold, the honest choices are:

      1. buy it anyway (while, perhaps, complaining).
      2. don't buy i

      • Re: (Score:3, Interesting)

        by cpt kangarooski ( 3773 )
        You, on the other hand, seem to justify illegal behavior.

        There's nothing wrong in that. The present configuration of laws that we have is by no means perfect. Some things that are legal should be illegal; some things that are illegal should be legal. While we ought to respect the law, where the law is in great conflict with what it ideally should be, and with people's norms of behavior, and lacks any or enough moral support, then that law is unworthy of respect. It ought to be changed, but it's of relativel

        • Re: (Score:2)

          by mi ( 197448 )

          No. There is no moral component to copyright law; it's purely utilitarian. But if there were a moral component to it, it would actually be on the side of the pirates.

          Certainly not. And here is why. Even the vilest pirates claim, they only steal from the RIAA/MPAA — not the original authors: musicians, artists, whoever.

          Ergo, morality is involved. That's one.

          Pirating from **AA is also wrong — claiming otherwise is equivalent to claiming, that the products of those original authors' — w

          • Re: (Score:3, Interesting)

            by cpt kangarooski ( 3773 )
            Certainly not. And here is why. Even the vilest pirates claim, they only steal from the RIAA/MPAA -- not the original authors: musicians, artists, whoever.

            What do their claims have to do with the underlying morality of it? Besides, the vilest of pirates don't bother to claim anything. They're in it for the money and don't care about making claims, whether those claims are fig leaves or not. The pirates you're thinking of operate on a more casual level and post on places like Slashdot.

            Pirating from **AA is a

            • Re: (Score:2)

              by mi ( 197448 )
              Too long to foolish. Not at all convincing. Yawn...
              • Too long to foolish.

                I'm not sure whether you meant to say 'Too long, too foolish,' or 'Too long to finish.' Maybe it's a portmanteau?

                In any event, while I know I can be a bit long-winded, I'd appreciate it if you gave it a shot, bearing in mind that it is not an apologia, but is an earnestly-held argument made in the public interest.

                • Re: (Score:2)

                  by mi ( 197448 )

                  You lost me right there at the denying to creators the power over their creations — and the property rights. Previous attempts to strip owners of their property were rather disastrous and anyone advocating anything similar is not worth studying to me.

                  an earnestly-held argument made in the public interest.

                  Try writing it into a Manifesto...

                  • Re: (Score:3, Interesting)

                    by cpt kangarooski ( 3773 )
                    You lost me right there at the denying to creators the power over their creations -- and the property rights.

                    Hm?

                    First, what I'm advocating is a reformed, lesser copyright. I do think that copyright is a good idea, I just don't think we've implemented it well.

                    Second, I have no idea what the hell you are talking about. Copyright has never been about giving creators power over their work merely because they created it; even today, copyright doesn't do that. (For example, the law currently denies architects any
    • You nailed this sentiment.

      It seems as though some of the individuals involved here (typical of government bureaucrats BTW) don't have the first idea of basic economic theory:

      If you raise the price of something, the demand goes down. How simple can you get here?

      There are some product like gasoline which in the short term doesn't display this tendancy, although even the oil companies have been required to adjust to fuel efficient vehicles, where even state taxation authorities have realized that highly fuel
    • The projected growth will still happen, just not in the US. If I start up streamtuner, I can listen to any of over 2000 streams for free. (None of the ones I listen to happen to be in the US anyway.)

  • Good business idea (Score:4, Funny)

    by Sunburnt ( 890890 ) on Saturday March 10, 2007 @11:01AM (#18299630)
    If you have a crowd of credible amateurs giving your product exposure in a new medium with excellent youth market penetration, the best thing to do is shut it down. After all, they should be re-imbursing the labels for...um...the free product advertising?

    Oh, wait, that's actually a terrible idea. And from those peerless innovators in the recording industry - who knew?

    • Re: (Score:2, Informative)

      by mastershake_phd ( 1050150 )
      If you have a crowd of credible amateurs giving your product exposure in a new medium with excellent youth market penetration, the best thing to do is shut it down. After all, they should be re-imbursing the labels for...um...the free product advertising? Oh, wait, that's actually a terrible idea. And from those peerless innovators in the recording industry - who knew?

      Maybe the only rational explanation is the Broadcasting Industry and the Labels are one in the same. They sure act like it.
  • The music industry isn't being fair? Stop the presses!
  • I think we can all agree that the RIAA and MPAA are stuck in the past with obsolete marketing and values. They are ether to retarded to see where things are and where they going or they are realizing that they are the middle man that is easily replaceable via the most abundant resource we have at the moment, the Internet.

    What we need is for these people to be slapped back down to the supporting role that they started out as, this is a prime example of abuse of power.

    Quick sue the collage students! /diaf
  • Huh? What did you expect? You've never been involved with the mafiaa, or you'd know that you can't get a fair deal with 'em. Monopolies don't tend to make fair deals.

  • "terrestrial" radio? (Score:3, Insightful)

    by The Living Fractal ( 162153 ) <banantarrNO@SPAMhotmail.com> on Saturday March 10, 2007 @11:40AM (#18299852) Homepage
    That's the worst possible word to describe what is simply IP radio. What does it even mean? That the radio travels over lines that are on the ground? And what happens when it goes through the millions of wireless broadcast points and everyone can access it like it was...radio?

    Radio is radio. The idea that they should be taxed differently is absurd. Even more absurd is the idea that IP radio be taxed more than normal radio because normal radio can be freely recorded and digitized by anyone within the broadcast radius, whereas to get IP radio you have to be paying for internet access (most of the time).

    TLF
    • OK, so I read that completely wrong.

      Let the pain begin. :)

      Sometimes I really wonder why /. doesn't have an edit function. Why why why?

      TLF
    • Radio is radio. The idea that they should be taxed differently is absurd. Even more absurd is the idea that IP radio be taxed more than normal radio because normal radio can be freely recorded and digitized by anyone within the broadcast radius, whereas to get IP radio you have to be paying for internet access (most of the time).

      I agree that the medium shouldn't matter at all for the cost of distribution rights. However, the fact that people pay for net access has as little to do with anything as the fact

  • Great returns! (Score:5, Insightful)

    by Bobzibub ( 20561 ) on Saturday March 10, 2007 @11:41AM (#18299856)
    $2.3B per year on a $23m investment in bribing congress (http://opensecrets.org/industries/indus.asp?Ind=B 02) is:
    ($2,300,000,000 / $22,699,424) *100%= 10,132% return. = Damn near priceless.

    Now RIAA members *could* invest in modernizing their legacy business model, but their current one is clearly much more lucrative.

    • Re: (Score:2)

      by Shelled ( 81123 )
      Someone who truly understands the business model. Mod up.

      • Re: (Score:3, Insightful)

        by jacquesm ( 154384 )
        the first time I read about the RIAA was when I was building a record player pre-amplifier.

        If I had known at the time what I was getting involved with I would have left it at a
        flat curve :)

        But I think that another 10 years or so should see the end of them as a relevant entitiy,
        they won't go without a fight though, that's for sure.

        • The RIAA won't go away until musical artists stop going to the record companies who form the RIAA to "broadcast" their material. The artists won't stop going to these mafiaa companies until there are other alternatives for them to go to so they can (a) broadcast their music, and (b) earn a living.

          That is what the RIAA is defending, and they are doing a damned good job because outside of MySpace and YouTube there are no universal places to reach listeners from... and who honestly uses MySpace or YouTube to
          • "Those sites are virtual wastelands for content (i.e. lots of content, but little substance)."

            Kind of like...commercial radio?

            It's too bad music is so subjective--otherwise, my guess would be that the ratio of shit/gold is about equal between commercial radio and the internet.

  • "Taking into account projected growth..." (Score:3, Funny)

    by jayhawk88 ( 160512 ) <jayhawk88@gmail.com> on Saturday March 10, 2007 @11:44AM (#18299866)
    OK say what you want to about the RIAA, but that's a funny line.
  • I think that the addition of the 'levies' will reduce the number of ( legit ) stations broadcasting on the net. So the net ( no pun intended ) income will be less.

    • There are actually very few fully legit internet stations in the US. Minimum fees from SESAC/SoundExchange/ASCAP run around ~$2,400 a year. It's tough to foot that kind of bill when your income is ad and donation based.
  • Check out www.saveourinternetradio.com [saveourinternetradio.com]. Sign the online petition. Write your Congressman. For anybody out there who listens to stations like Radio Paradise and Pandora (my personal favorite), let your voice be heard before these staggering fees kill these great stations.
    • No!

      Petition the larger streaming stations to stop playing useless shit from the RIAA, find indie bands who want exposure and are willing to allow the station to play their songs for free, and stop buying into the idea that the RIAA controls music.

  • Push Money (Score:2, Interesting)

    by mazphil57 ( 792004 )

    Meanwhile, the corporate Clear Channels pay just $550 Million for broadcasting the same songs

    Ordinary radio stations are expected to play [only] the songs they've received incentive pay or broadcasting discounts to promote. For example, if a performer is giving a concert soon nearby, airplay will be purchased of that performer's songs to drive ticket sales.

    There is software that "listens" to the radio station and verifies that the songs and commercials they've been paid to play a certain number of times are actually being played that many times. Usually it is fully automated, but occasionally

    • Ordinary radio stations are expected to play [only] the songs they've received incentive pay or broadcasting discounts to promote.

      Thy shouldn't be. See Payola [wikipedia.org]

      To quote the first paragraph:
      In the American music industry, the practice of record companies paying money for the broadcast of records on music radio is called payola, if the song is presented as being part of the normal day's broadcast. The practice is illegal in the U.S.
      • Your Wikipedia link does not refute my assertion, it only says direct record company payments to radio stations are illegal, not the payments by third party intermediaries. Your link also shows three record companies settling with Elliot Spitzer in 2005 over this practice.

  • Outsourcing (Score:2, Interesting)

    by Quzak ( 1047922 )
    It just shows that its time once again for Americas FAVORITE game show!!!!!!

    OUTSOURCE

    Simply outsource the radio broadcasting service/equipment to someplace where location != United States.

  • The irony is they are writing their death sentence (Score:5, Informative)

    by bloosqr ( 33593 ) on Saturday March 10, 2007 @12:47PM (#18300300) Homepage
    The *royalty* payments are only for RIAA/BMI/ASCAP/Harry Fox related artists and labels. All the labels in the indie scene and the labels are actually labels that are much bigger than you might think (though this excludes the fake indies or 'boutique labels') will give you - if you ask nicely - a blanket license not only to stream their music but to podcast it as well. Podcasting has serious licensing issues well beyond streaming internet radio but all of this is obviated if you are allowed to negotiate with the label or the copyright owner directly. Remember the RIAA/BMI/Harry Fox are acting on behalf of *their* labels, not music in general. They can not dictate what a label or an artist themselves say if the artist and the labels are not part of that agency.

    To be clear, my show gets about 1500 listeners a week and industrial / new wave electro and here is a list of labels that have given permission:

    http://www.bloosqr.com/the%20essence/the%20labels. html [bloosqr.com]

    *the irony* of these laws it is giving these labels much more exposure because by definition the indie/hipster/creative kids making their shows are now even more likely to only play music from the indie labels and more over anyone looking for internet music is more than likely to be exposed to music from these labels which given the distate for the "big 4" could easily turn some of these artists/labels into the next big thing
    • The problem is that it can be a significant legal hassle to get the necessary agreements in place, a hassle which is costly in both time and money. The result is that many internet radio stations will likely just disappear.

      What the indie scene desperately needs to do is band together and form a licensing clearing house, similar to ASCAP and the like, which could serve as a single point of contact for radio stations to license their works.

      • Re: (Score:2)

        by bloosqr ( 33593 )
        Its not as hard as you think to be honest.. I'm not saying its a piece of cake but there are two sides of this.. the legalesque is only needed to cover you in case the label is going to sue you. If as is mostly the case the non-ascap/bmi labels aren't going to sue you for the obvious reason that streaming radio is an asset, so most people 'fly under the radar'. Getting permission isn't much more than sending labels an email.. a few of them are actually starting to clue in to this and have blanket permissio

        • Re: (Score:2)

          by Weezul ( 52464 )
          Why not just try to merge these contracts into one "starting point" contract for the labels to place on their webpage? No doubt some labels will change it. But, as with OSI approved licenses, you could still have some site listing everyone who follows more-or-less this license. Such an indexing site is a major selling point of posting the license because radio operators themselves will find your material more easily.

          A big boost to the labels might be asking the radio stations to clearly present their pla
    • Of the radio stations I listen to, most are very niche internet radio stations run by DJs and the associated community. Out of maybe 100 djs, a good 20-30% of them actually produce their own tracks and use it as a form of marketing for themselfs.

      We're talking very very small record labels here, with a handful of releases a jear catering for DJs. This is so highly in contrast with what the big labels are doing that I really don't think they have enough perspective to suggest that this should be adopted on a

  • A recent article from BetaNews has analyed facts and figures on royalties currently paid by terrestrial radio stations to the three major performance royalty organizations (PROs) -- ASCAP, BMI, and SESAC -- and has determined that, under the new rates proposed last week by the Copyright Royalty Board (CRB), Internet radio stations operating in the U.S. would have to pay $2.3 billion in performance royalties annually, compared to $550 million for the more than 14,000 terrestrial radio stations combined.

    I co

  • Oh, they can kiss my ass. (Score:5, Informative)

    by rantingkitten ( 938138 ) <kitten@NOSpAM.mirrorshades.org> on Saturday March 10, 2007 @02:31PM (#18300910) Homepage
    As the operator of an internet radio station [mirrorshades.org] myself, my response is "kiss my ass". Like most other stations, I broadcast things that aren't ever going to be heard on conventional radio, giving (relatively) niche or obscure artists that much more free exposure. I know this works for two reasons:

    1. I myself have bought albums after hearing certain artists' songs on other net radio stations -- music I would never, ever, ever have heard otherwise except perhaps in the drunken haze of a goth club.

    2. Several independent artists have sent me singles and even entire albums, encouraging me to put them in rotation. To quote the latest, after he sent me a few samples and I liked 'em:

    Thanks I appreciate the exposure, it's hard to get the music out as an
    independent artist which is why I'm trying to get radioplay. The CD is
    the mail.

    This has happened several times. It's good for the artists who are trying to get noticed; it's good for the audience who gets to discover new music; it's good for the broadcaster cause it's just fun. I get permission from many of the labels or artists to play their stuff, and when I don't, well, it's a freaking 96k broadcast that can't be copied without some technical know-how (certainly much more difficult than jamming a tape into your radio and hitting "record"). Exactly who is being harmed here?

    The RIAA's outmoded and antiquated business models, and their continued attempts to strangle the life out of emergent technologies, is absolutely appalling. I'll continue to broadcast from my host in Germany and here's a big screw you to the suits. I don't make a single cent off my broadcast, and I don't play the kind of music that would come close to competing with the mass-appeal fare on the normal airwaves. You'll never get a dime from me.
    • http://afterhoursdjs.org/ [afterhoursdjs.org] Agrees.
      • Yeah, I've listened to them before, and they seem to have kind of the same deal. no radio station in the US that I know of is going to play trance, certainly not the generally unknown stuff from afterhoursdjs -- as far as I can tell artists on that station aren't even signed to any major label. Why would the RIAA care about that? Utterly idiotic.
        • Some radio stations [myindiradio.com] will happily play that sort of material and will never bow to the RIAA. There's a new revolution coming. People everywhere are getting pretty sick of the RIAA telling us how much music should cost and who should be paying. It's time for a change in leadership (or just complete anarchy). Let the free market rule, and get rid of the outdated cartel.
    • I was sitting in a club one night with a musician and the father of another musician once, and mentioned that I was sneaking 45's into the jukebox at my job. The dad was thrilled to get my address and his son sent along all three of his own singles, just for the thrill of the exposure and free promotion. And he thanked me for doing it. One of the songs was getting a lot of airplay on the radio then (and now). Once you get past the "middlemen", you often find an artist who just loves to have an audience, and
  • I'm a frequent listener of net radio and the stations I've been listening to have been advertising a website that has been put up to help support net radio. The website is www.savenetradio.org they've got a petition setup on there as well as other ways that people can help a good cause. Spread the word, tell your friends about it, help stop the madness that is the RIAA!
  • Meanwhile, the corporate Clear Channels pay just $550 Million for broadcasting the same songs we've all heard before. Hardly a fair deal."

    This just illustrates that Clear Channel is stupid, careless with their shareholder's money, or knows they'll still come out ahead on advertising revenue because we're stupid and continue to listen to the same music over and over again on the radio, rather than on our iPods.

  • A petition can be signed to over turn this ruling can be found here: http://www.petitiononline.com/SIR2007r/petition.ht ml [petitiononline.com]
  • Disclaimer - I'm the owner of an internet radio station [gothradio.com].

    Independent labels are starting to worry the majors. In particular, Internet Radio plays a big role in this as it tends to help the independents & the majors would probably be happy to see it go away.

    Specifically, in the genres we support, artists have had some great success on the Billboard charts in 2006. Most notably, Mindless Self Indulgence & Cruxshadows who each took a turn at knocking a major out of the #1 spot, yes that wasn't a ty

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