Increased royalty rates for whom?
July 15th, the day that the new royalty rates will hit the internet radio, is coming this weekend. I’ve already talked a lot about this issue, but with the upcoming “deadline” (the Internet Radio Equity Act can still be passed after then) I’m going to get the rest of my thoughts out.
The save-net-radio crowd has had no trouble getting their arguments out, and after reading most news stories you’d think that the situation was dire. They refer to July 15th as “the day the music dies.” They want you to believe that all webcasters are going to go offline in a week, but there is a small fact that seems to get dropped from the discussion. A few months after announcing the increased SoundExchange announced the increased radio rates, SoundExchange made a concession that you might not have heard about.
That concession is: Small webcasters do not have to pay the increased royalty rates.
SoundExchange made an offer in May to allow small webcasters (those with below $1.2 million in revenues, if I remember correctly) to continue to pay the lower royalty rates they have been paying through 2010. This means that small webcasters can still play music just as they have been for years. This ruling is affect businesses who use this government license to play music without having to be bothered to ask copyright owners for permission.
Most importantly to me, this concession also means that small webcasters won’t be hit with a huge retroactive bill that will put them into personal bankruptcy. While I don’t believe that webcasters should be able to play people’s music without explicit permission, people who run small internet radio stations as a hobby should not have their personal and financial lives ruined by this government ruling. Whether or not the webcasters knew that they were playing music for rates that wouldn’t be decided for months, the government shouldn’t hang them out to dry.
What was the response from the save-net-radio advocates? Not good enough!
I don’t think this concession changes the fundamental issue in this debate, which is the role government should play in the music business. Still, I think this concession is important . If anyone wants to suggest that the music industry has been so damaged by government interference so badly that further government regulation is a necessary step to keep everything from collapsing, then we should discuss just how bad the situation is. Is music really going to die in less than a week? Is internet radio even going to die next week? Is your favorite webcaster even going to go off the air next week?
I don’t think the rhetoric matches the facts. More tomorrow…
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