x Three new co-sponsors for H.R. 2060 The total number of co-sponsors for the House version of the Internet Radio Equality Act reached 86 yesterday. Click here for the names of the newest co-sponsors. x

From All Things Digital, by Michael Robertson: "The bell is tolling for Webcasting in the U.S. after the Copyright Review Board refused to alter the new proposed royalty rates, which represent an enormous hike in the money online radio stations must pay...

"Oversized royalties create a type of censorship, and the resilient Internet and capitalism will route around this as well. Webcasting will be revitalized stronger than before, because this time it will have a viable long-term royalty structure...

"However, net users’ thirst for music isn’t altered one note by a royalty decision. People will still crave music and the passive listening experience while sitting in front of the computer, where they spend an increasing portion of their life. A new generation of Webcasters will emerge to fill the vacuum created by this royalty-induced musical implosion.

Cutting out the middle men
"This new generation of Webcasters will limit their stations to music from labels who will agree to a direct license at lower rates. Many were surprised when the Copyright Review Board’s rates did not offer a 'percentage of revenue' option–a concept both sides advocated, albeit with greatly different numbers. Webcasters will willingly pay record labels a single-digit percentage of revenue, similar to the 3% they pay to ASCAP/BMI... Smaller labels will agree to this or a more modest per-song royalty, recognizing that they are receiving (besides the money) valuable promotion.

"As more labels agree, the holdout labels will feel competitive pressure to ensure Internet promotion for their artists and be compelled to agree. For sure, this transitional period for Webcasting means many of your favorite songs will not be heard on online radio, because the major labels who sell 80% or so of music will not immediately voluntarily agree to lower rates...

"The temporary absence of the major-label song library may not be as crippling to Webcasting as you might think. The constraints of odd-numbered stations on the limited AM/FM spectrum have consolidated consumer taste. But the Internet has unlimited capacity, which allows for a much greater diversity of music. An astonishing 55% of the songs played on Pandora are from independent labels. And since users can vote thumbs up or thumbs down on every song, this is likely an accurate representation that consumers desire a greater variety in their audio experience.

Read all of Robertson's article at All Things Digital.

...

... Creative solutions to the CRB debacle will become increasingly valuable should webcasters need to rebuild their businesses around these ruinous rates. However, as we've mentioned before, the "direct deals" option has a major flaw: royalties paid directly to record labels for digital performances would almost certainly never be seen by the actual artists themselves. The reason for this is that performance royalties paid to SoundExchange, per the DMCA, are required to be split 50/50 between label and artist. A direct deal, unless stipulated otherwise, would cut artists out of digital performance revenues. While some may argue that the artist promotion those deals would facilitate could outweight the lost royalty revenues, the fact remains that a solution that cuts artists out leaves a lot to be desired from the artists' standpoint. -- DM ...

From the Broadcast Law Blog: "The battle over performance royalties for broadcast stations seems to have been officially joined. We wrote last week about the rumors of a coalition of record companies and musicians that was reportedly forming to lobby Congress to enact a performance royalty on broadcast radio for the use of sound recordings, and the NAB’s immediate reaction, writing a letter to Congress to oppose the new royalty.

"Now, the press reports that the pro-royalty group has responded with their own letter to every Congressman, asking that immediate action take place to impose the royalty. Two letters in one week indicate that this summer may be a hot one for broadcasters on Capitol Hill...

"The royalty on the use of sound recordings (the song as recorded by a particular artist) is in addition to the royalties that are paid to ASCAP, BMI and SESAC for the underlying musical composition. So, if imposed, this would be a new royalty for US terrestrial broadcasters.

"If a performance royalty was added to the costs of operating terrestrial radio stations, what impact would that have on the performance of these companies?... [H]ow would another hit to the bottom line be handled, especially if it were a significant one (like the one that was just imposed on Internet radio)? It could be a real concern – one that all broadcasters will want to vigorously oppose."

Read the entire post at the Broadcast Law Blog.

From Engadget: "Motorola has officially unveiled the successor to one of the most iconic mobiles ever made, the  RAZR 2...

"It includes something Moto is calling 'Crystal Talk' technology that automatically adjusts volume and tone based on ambient noise.

"Other features include external music controls, haptics (read: vibration) for tactile feedback when external touchscreen keys are pressed, a full HTML browser, 2 megapixel cam, the full suite of Bluetooth profiles, Windows Media Player sync, a 2-inch QVGA external display, 2.2-inch QVGA internal display, and twice the screen resolution of the original RAZR. GSM versions start shipping in early July, with CDMA following up later in the summer."

Read the entire article at Engadget.

A total of 85 Representatives now back the measure.

	Representative Lois Capps California's 23rd District 6th-term Democrat Key committee(s): Energy and Commerce
	Representative Danny K. Davis Illinois' 7th District 6th-term Democrat
	Representative James L. Oberstar Minnesota's 8th District 17th-term Democrat