Copyright Royalty Board ruling on webcasting rates
Gus Van Horn wrote a post discussing the recent U.S. Copyright Royalty Board’s ruling to increase the rates webcasters owe for broadcasting music over the internet. His previous posts on this issue are what alerted me to the problem, so I wrote my feelings about the ruling as a comment on the post:
Tags: [copyright, government regulation, intellectual property, internet radio, royalty rates]Hi Gus. I saw the news about the internet royalty ruling today, too, and since I’ve been thinking and reading about this issue since your last post on it I thought I’d post another comment.
The problem with the rates that the government set is not that the rates are too high or low, but the fact that the government has any say in the rates at all. Those who hold the rights of the music should set the rates, and nobody else. It’s their music, so you need their permission. But so long as the government is playing a role in this issue, the government should side with the content owners. Like I said in my previous comment, the government should not be trying to balance the rights of the content owners with the wants of the broadcasters. Since SoundExchange seems to be very happy with the ruling, I’m more apt to believe that the correct ruling was made.
I disagree with how this issue is framed as a question whether “internet radio” will be allowed to continue. Internet radio will continue. This ruling doesn’t take away any broadcaster’s right to play music to which he or she has permission. What this ruling affects is what it will cost for some broadcasters to get permission to play some music, and it’s setting the cost to a rate that the content owners want. That’s all. Nobody’s individual rights are being violated (except the property owners for having negotiate with anyone about their own rates).
Imagine what would happen if the government gave the internet broadcasters the low rates they wanted. The government would essentially be telling the RIAA, “We don’t care what you want to do with your property, because internet radio must be preserved.” What is “internet radio?” Playing music over the internet? Whose music? Playing it to whom? These aren’t questions you’ll find answered on sites like saveinternetradio.org. There, you’ll just find easy ways to get in touch with your legislators and pressure them to take from the RIAA what you want.
I’d like to finish by pointing out that despite this ruling, it’s never been easier to listen to the music you want legally. Many websites allow online streaming and will continue to do so. Some even allow you to play a low monthly fee to have unlimited access to millions of songs, and even download them all to your mp3 player. For $12 a month, you can have a music library that beats the biggest internet music pirate. I think online music is going to be ok.
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2 Responses to “Copyright Royalty Board ruling on webcasting rates”
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I found your post interesting, and hope it’s okay that I offer a differing viewpoint.
I run a small internet radio station. It’s not for profit. Each month, I raise about $1200 in donations. That money is spent on hosting and royalty payments to SoundExchange, BMI, SESAC and ASCAP.
The SoundExchange portion is roughly 10% of revenues, or $120/month
Under this new ruling, my SoundExchange fees soar to $6,500/month
That’s an increase of 4000 percent. There is no possible way I can raise enough money from donations to pay that. And as a small station, advertisers aren’t interested in running commercials on my station. So I am finished.
So are thousands of other small webcasters who give exposure to indie artists that those artists don’t receive on terrestrial radio (Who, by the way, don’t pay SoundExchange a penny).
The draconian increase in rates will actually decrease revenues. You can’t collect any royalties from people that are bankrupt, or forced out of existance. I would argue that the new rates hurt artists, they don’t help them - because breakthrough artists are losing a valuable marketing venue for their work.
Even major artists like David Byrne and Bryan Adams have come out against this decision.
To address your questions What is “internet radio?” Playing music over the internet? Whose music? Playing it to whom?
Internet radio is like terrestrial radio. People listen to it at work in offices around the world every day. They hear new music, or old favorites, and when they go home, they often will go to iTunes and purchase the songs. As a station operator, I’ve always paid royalties and don’t have an issue with helping artists. My love of music is what prompted me to start webcasting. Now I have to stop, because someone in an office somewhere decided that they are losing so much money on piracy and declines in CD sales that someone has to pay.
As I stated, I can’t pay. So I will be gone. Someone, somewhere, should understand that 10 percent of something is better than 400 percent of nothing. Thanks for allowing me to present my opinion.
John,
Thanks for your reply, and it was definitely okay that you offered your view.
I have sympathy for broadcasters who were suddenly stuck with a huge bill that they had no idea they were going to owe (though, they did leave themselves vulnerable by essentially signing a blank IOU by playing music when they didn’t know what the fee would be). And I wish that you were able to continue broadcasting the music you love. However, none of these desires trump the rights of those who own the music. It should not be up to me or you or the government to decide what the rates for broadcasting music would be. What matters is what the owners of the music want, and judging from the RIAA’s position I think they think the rates you were paying in the past were way too low.
You may be correct that record companies will make more money if they allowed broadcasts of their music by webcasters like yourself. Again, though, that decision is not up to me or you. Record companies can run their business into the ground if they wish. Just because you disagree with their business practices does not give you the right to use their property without their permission.
I listed the series of questions about internet radio to point out that webcasters talk of “internet radio” without addressing what it consists of. Webcasters skip over the fact that they want to play music that’s owned by someone without their permission and instead just talk about whether “internet radio” should continue. What makes this even worse despite all of the dire predictions, internet radio will continue regardless of this ruling. It will just continue with those who can meet what content owner’s rates.