The essence of the webcaster’s argument
There was some activity in the internet radio royalty rate issue last week. SoundExchange announced that they had made deals with 24 small webcasters. In response, a dozen webcasters released their own statement on the situation. That response contained some of the usual context-dropping statements, but I found one sentence that I think really illustrated what this debate is about.
We have asked for a reasonable, long term solution, not one that is subject to increase at the whim of the record industry every five years.
What they refer to as “whim” is the record industry’s right to control the price of their product: the music. One of the 24 artists that reluctantly signed the SoundExchange agreement added (emphasis mine):
Safroncikas added that he continues to strongly support passage of The Internet Radio Equality Act, HR 2060 in the House, S 1353 in the Senate. “A willing-buyer, willing-seller thoeretical standard cannot work when one entity holds all of the music cards. The rate-setting standard must be ammended,” he added.
What he refers to as the “music cards” is the record company’s property. What both are saying that so long as the record industry is allowed to control its own property and set its own rates, webcasters won’t have any choice but to accept the rates the industry sets. That would be bad, so the government should step in and give the webcasters some help.
I’ve written a lot on this issue, probably more than I should, and I’ve been trying to think of a way to explain why I’m against the Save-Net-Radioers cause and why I believe that most news and editorial coverage on this issue has not been complete and honest. And I got an idea. Ever since my first year of college, I’ve found that pictures and graphs can be very helpful in explaining programming concepts and methods. It allows people to see abstract ideas in a concrete form, which is very helpful when trying to communicate between two people. So, I’m going to try it here. As bad as this makes my writing sound, these two pictures probably present my argument better than I have in all my posts.
Here you can see the webcaster and the artist. The webcaster wants to play the artist’s music and the artist wants his music played by the webcaster. But unfortunately, there is a big obstacle in the way: SoundExchange! Note the “$” symbols next to SoundExchange. Greedy SoundExchange wants to take the webcaster’s money, but not give it to artists. Practically every news article I’ve read this year portrays the issue like this. Under these circumstances, if SoundExchange forces higher royalty rates, the wall between the webcaster and the artist will be insurmountable. But are these the real circumstances?
Here are the real circumstances. The webcaster wants to play music, and he currently has two options. He can use Option A and get the “right” to play the artist’s music by paying the government-set rate. Or, the webcaster can take Option B and get permission to play music directly from the artist.
Obviously, the webcaster is going to go with the option that costs the least amount of time and effort. Option A has been the cheapest and easiest for years, thanks to a low royalty rate that covered all music - regardless of the wishes of the individual who created the music. However, earlier this year the CRB announced that the cost for Option A was going to increase dramatically. That takes away Option A for most webcasters. That sounds bad, but look again. The government action has, in effect, priced themselves out of the market and made negotiation with record companies and artists the only remaining option. I think that negotiation should be the only option anyway, so I’m happy with the decision.
I’m not happy that some webcasters may have to shut down their radio stations. I’ve read a lot of their stories, and I hope many of them can continue. But then again, I’d also like everybody to have easy access to health care, education, clothing, job opportunities, good food, big houses, dating opportunities, fast cars, high-speed internet, and all of the things that help to make life fun and enjoyable. The question is, how do we do that? I think the answer is to allow people to live their lives as they choose without interference from other people or the government. The only role government should play is to protect someone from interference, and then let the chips fall where they may. If internet radio can survive and by dealing directly with music owners, then it will survive. If it doesn’t, then it doesn’t (it’s going to be fine, of course). I think we get in big trouble when we try to use the government to make the “right” outcome occur, whether it’s the promotion of internet radio or any of the other issues listed above.
Tags: [CRB, internet radio, soundexchange]