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We'll send you a brief daily summary of each day's stories with a clickable link to the RAIN home page.

 

 
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BREAKING NEWS: The full text of the Copyright Royalty Board decision is now available here [PDF]. More information and analysis coming soon.
x

x
Read RAIN's Friday initial coverage of the royalty rate
release including a table of the announced rates here.
x

Headline: "Major push to mobilize listeners launched by Webcasters, fans"
BY DANIEL MCSWAIN
Webcasters across the country have begun an organized effort to mobilize listeners in the fight to keep their operations save the streamsonline.

Faced with last week's Copyright Royalty Board decision, which threatens to shutter the huge majority of Internet radio operations in the U.S., webcast audiences are rushing to respond, signing online petitions and calling the attention of their elected officials to the Webcasters' struggle.

There are already a number of destinations for Internet radio listeners to support Webcasters in their fight against this latest ruling. Below is a list of sites where Webcasters and audiences alike can discuss the ruling, contact members of Congress, and generally contribute to helping to keep Internet radio online:

  • Save The Streams — A site published by the RAIN team designed to be a "central command" for Webcasters save our internet radioand audiences looking for continuously updated info and links.
  • Save Our Internet Radio — Site published by a Radio Paradise fan with comments from listeners, editorials on the CRB ruling (including one by William Goldsmith), and links to other relevant sites and information.
  • Congress.org — Varying forms of the standard petitioncongress.org  drafted by a group of Webcasters. Includes direct links for users to easily send their petitions to the elected officials in theirdistricts.

Headline: "Pandora 2006 royalty obligation could total nearly $4 billion"
Wired Listening Post
writer Eliot Van Buskirk, who has been playing close attention to the CRB decision since last Friday, writes today: "Larger services that offer thousands of channels, such as the free Pandora, are also facing a huge spike in royalty costs. Kurt Hanson, publisher of RAIN and CEO of AccuRadio, went so far as to speculate that Pandora, which pandora is based in the United States, could 'disappear' as a result of the new rates. Overseas competitors like Last.fm, which is based in London and removed from the board's restrictions, could easily claim Pandora's market share."

"If Pandora has to pay the annual $500 minimum for each channel, Hanson said, its sound-recording royalty bill for 2006 alone would be capped at about $2 billion (based on the service's 300 million registered users, each of whom gets to create up to 100 unique channels)."

Pandora CEO Joe Kennedy chimed in, calling the rates "disastrous", and adding: "I'm not aware of any Internet radio service that believes they can sustain a business at the rates listening postset by this decision. The only reason the services are not shutting down today is the belief that rationality will ultimately prevail here, either through appeal or Congressional intervention."

Kennedy goes on to warn of the competitive void that the demise of Internet radio would leave, and the gross disparity between formats that the decision creates. "If these rates are left standing, satellite and broadcast may be all that are left," Kennedy said. "Broadcasters pay no sound recording royalties at all and, at the new rates, Internet radio would have to pay 4-5 times the rate that the satellite companies pay."

In an e-mail to the GigaOm website, Pandora co-founder Tim Westergren added, "Left unchanged, it's over for us and every other internet radio service, period."

...
RAIN Analysis
...
I checked my notes last night from hearing a recent speech by Pandora founder Tim Westergren in Chicago, and the amount owed could potentially be even greater than I estimated in the article.

Westergren says Pandora currently has 6 million registered users; let's guess that at the end of 2006 they had at least 5 million. If the average user sets up 1.5 "stations," that's a 2006 royalty obligation of $3.75 billion. —KH
...

Headline: "Audio spots point audiences to online petitions, formus"
Webcasters aiming to raise awareness via their audio streams can use a number of pre-made audio spots being made available online. Check out a directory of files made by WZFB here.

Coming soon, RadioIO plans to publish a "package" of audio spots regarding the royalty rates and what listeners can do to take action. All interested Webcasters will have access to the package. As soon as it becomes available, RAIN will provide information on how to access the audio files.

 
RAIN is brought to you today by:
Link to AccuRadio.com

There's huge, and growing, demand among consumers for Internet radio (at least during the 9AM-5PM workday), as shown by the rapid growth of our AccuRadio project.

AccuRadio features a variety of popular music formats that you simply can't find on the broadcast dial: Swingin' Pop Standards, Brit Rock, Piano Jazz, Broadway and more at www.AccuRadio.com.

 

Headline: "Payola settlement includes deal to play more indie music"
From the Chicago Tribune: "Tired of the same old thing on the radio? So are federal regulators and independent music  labels.

"Weary of the illicit, recurrent practice known as payola, the two groups have reached tentative agreements with leading broadcasters to curb pay-for-play schemes and expand radio playlists.

"Sources said Monday that four major radio companies are close to finalizing not only a consent decree with the Federal Communications Commission, but also a deal with a group of independent music labels promising 8,400 half-hour airtime segments to local and lesser-known artists.

"CBS Radio, Citadel Broadcasting, Clear Channel Communications and Entercom Communications were accused of accepting money, airline tickets, clothing and other gifts from major labels to play certain songs such as Liz Phair, Jessica Simpson and Avril Lavigne. Now they will be expected to throw open the airwaves to a more eclectic mix...

"Peter Gordon, president of Thirsty Ear Recordings, who led the negotiations on behalf of the American Association of Independent Music said  independent music accounts for 30% of sales, but for far less in terms of traditional radio airplay. But on other music outlets, such as satellite and Internet radio, the amount of airplay goes past 35%. 'By joining forces with us, they're bringing a whole new relevance to terrestrial radio,' he said."

Read this Chicago Tribune article in its entirety online here.

...
RAIN Analysis
...
Well, this makes sense!

Once again, the government finds the major record labels doling out the cash to broadcast radio to make sure the artists they've put the most money behind (record industry folks call these projects "priorities") monopolize the airwaves at the expense of smaller labels, independent artists, and the public in general.

It has to be apparent to the federal government (FCC) -- as well as anyone reading this article -- that exposure for their artists means so much to major labels that they're willing to risk breaking the law by shoveling big bucks to broadcasters who play their music.

In fact, it must be doubly-important to get this music on the air, as anyone who's followed the record industry's struggles against file-sharing understands labels' (A) respect for the law, and (B) their dire financial situation.

Yet the government (in the form of the CRB), at the behest of the major label-established SoundExchange (formerly part of the RIAA), sees fit that Internet radio must pay for the privilege of playing recorded music, at rates that are certain to destroy the industry.

Part of the broadcasters' punishment? Play more independent recordings... something Internet radio has been happy to do from the beginning -- no government intervention necessary. —PM
...

We'll send you a brief daily summary of each day's stories with a clickable link to the RAIN home page.
 


Links to previous royalty rate coverage in RAIN:

Feb. 20, 2002
CARP rec.'s .07-cent fee for radio webcasts, twice that for 'Net only

Feb. 21, 2002
Industry reacts to CARP royalty rates for Internet broadcasts

Feb. 25, 2002
Industry still stunned by CARP arbitrators' recommendation

Feb. 27, 2002
CARP arbitrators gave RIAA more than they asked for!

April 18, 2002
Mercury News editorial

April 22, 2002
Day of Silence announced

April 23, 2002
More support in Congress

April 25, 2002
Day of Silence is ON!

April 29, 2002
DOS in USA Today, NY Post

May 1, 2002
Day of Silence

June 20, 2002
Librarian Decision

June 24, 2002
Cuban on Yahoo deal

July 11, 2002
Labels to Net radio: Die Now!

October 1, 2002
Forbes coverage (scroll down)

November 15, 2002
Small Webcasters Settlement Act

December 16, 2002
Small commercial webcaster license

 


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