...

... It has been brought to our attention that, following the public posting of video of testimony from yesterday's House committee hearing on YouTube, one or more SoundExchange witnesses may have been the subject of harassment by others with opposing viewpoints. We strongly believe that no professionals involved in the effforts of webcast royalty relief would resort to intimidation practices. That said, we at RAIN always assume that even those with whom we disagree operate under the sincere belief that they act in the best interests of themselves and their industry, and always have the right to do so. Thanks. -- RAIN publisher KURT HANSON and the RAIN STAFF ...

From a SoundExchange press release: "SoundExchange announced that it proposed a voluntary cap on the minimum fees charged against royalties for sound recordings played on Internet Radio. SoundExchange proposed capping such advance payments at $2,500 per service.

"Recently enacted regulations (due to go into effect on July 15) require each webcasting service to pay a $500 minimum fee 'per station or channel' regardless of the overall number of stations/channels they are streaming...

"'There was a lot of misunderstanding out there about how the minimum fee would apply, and frankly some people were wrongly stating SoundExchange's policy on this matter,' said John Simson [right], Executive Director of SoundExchange. 'We certainly don't want anybody to get unduly hurt by the minimum fee, but there is a value to music and a cost to administering the digital royalty program, and we wanted to ensure that everyone was treated fairly -- artists, webcasters and record labels.'

"SoundExchange has reached out to the Digital Media Association this week to discuss the proposal...

"'The idea that the per-channel minimum might have a disproportionate impact on certain Internet Radio stations was never presented to the Copyright Royalty Judges,' said Michael Huppe, General Counsel of SoundExchange. 'Nonetheless, at the request of Congress, we are trying to work with the small subset of affected webcasters, and are offering this proposal in the hopes of addressing those concerns.'

"SoundExchange is also currently in active negotiations with small commercial webcasters and non-commericial webcasters such as public radio and college stations to provide below-market rates under terms similar to those they enjoyed in previous years under the Small Webcaster Settlement Act...

"'In proposing these various accommodations to webcasters (especially small and non-commercial webcasters), SoundExchange has taken the initiative to attempt to address the concerns that have been raised by Congress and affected webcasters,' Simson also noted."

Read SoundExchange's press release here.

From Business Week: "Small webcasters intent on keeping Internet radio stations from going out of business best not look to Congress for help. That's the message from a June 28 House of Representatives hearing aimed at resolving a dispute over efforts to increase the royalties paid by Web radio stations to musicians and record labels for spinning their songs...

"No can do, said House Small Business Committee Chairwoman Nydia Velazquez [at right]. The New York Democrat said she'd prefer Webcasters and the music industry come up with their own compromise.

"'I really don't think Congress would be the best type of vehicle to resolve this type of issue,' she said after the testimony of seven witnesses, including independent record-label owners, musicians, and Webcasters. 'July 15 is just around the corner, and I hope the two parties can come together and resolve this issue.'

"Some legislators said they're genuinely puzzled about how to come up with a decision that would appease both parties. 'I have not heard what the win-win is,' said Representative Yvette Clarke (D-N.Y.) after hearing the witnesses' testimony...

"Meantime, representatives of Web radio, listened to by 57 million Americans each week, will redouble efforts to reach a compromise.

"'We might now be at the beginning of real negotiations with SoundExchange,' says Ian Rogers [above], general manager of Web radio leader Yahoo! Music...

"So, what alternatives might SoundExchange and Webcasters reach? In her closing questions, Velazquez seemed to suggest that the warring sides change the definition of a small Webcaster to allow larger companies to pay lower rates...

"That said, Webcasters and the music industry could yet leave crafting of the compromise to Congress or the courts. Webcasters are appealing the CRB decision and hope an appeals court judge will take the case before July 15, says David Oxenford, partner at law firm Davis Wright Tremaine, which represents Webcasters in the appeal. The appeals court, however, may not act on time—or in the Webcasters' favor.

"'Committee members are very concerned there's a train wreck coming,' says Jon Potter, executive director of the Digital Media Assn., representing Webcasters. What they may not know is how to avert it."

Read this entire Business Week article online here.

...

... While I didn't come away from these hearings feeling great, I don't necessarily agree with the gloomy tone of this article. There was plenty of "armchair quarterbacking" in the RAIN office as we watched the video, no doubt ("No one is saying artists shouldn't be paid!"; "Yes, Congress should be involved -- the rate-setting process they created is broken!"; "What!?! *&%$! lemonade!?!"). One important point to keep in mind, as webcasters are discussing today, that a direct settlement between SoundExchange and webcasters -- what the Small Business Committee (and most of Congress, I'd assume) says it wants -- would only cover the minority of recording artsits for whom SoundExchange is authorized to negotiate. This is not the intended result of a "one-license-to-cover-it-all" statutory rate. I have hope that making this point clear to members of Congress will help convince them to come around to the thinking of their 130 or so colleagues who already understand Congressional intervention to fix the process is necessary and cosponsor the IREA. -- PM ...

Below are some highlights from the hearings that were re-printed in RAIN late yesterday afternoon.Read RAIN's full coverage here.

For full videos, visit the Small Business Comittee's YouTube playlist.

From today's Chicago Tribune: "It's the Tickle-Me-Elmo moment for the mobile phone.

"Just like a must-have toy or hot new video-game console going on sale for the holidays, Apple Inc.'s new iPhone has become the talk of the nation...

"Some see the iPhone, which goes on sale 6 p.m. Friday and costs $500 for the entry-level model, as a turning point for a gadget-crazed society. It combines two functions that people use every day — their iPod and a mobile phone.

"Throw in a big screen with a sexy touch controls and months of hype by Apple touting the phone as a revolutionary device, and a new cultural icon is born...

"Now, with the iPhone, Apple is flexing its gadget muscles and wants to change how people think of mobile phones.

"The potential for the iPhone to change the mobile landscape, as the iPod altered the music industry, attracts people...

"Cachet and design have been Apple hallmarks under Jobs' leadership... The iPod has only enhanced that following, making it more mainstream...

"In a Wall Street Journal interview this week, Jobs said it is the 'most advanced keyboard in any mobile device... iPhone users will quickly learn to trust its intelligence to correct their mistakes.'

"And if there's one big hurdle Apple faces when it comes to the iPhone, it's the price."

Read the entire article at the Chicago Tribune.

...

x It should only take a few days (hours?) for news and reports of the iPhone's seemingly limitless capabilities to spill out, but for now it's impossible to say with any certainty what sort of impact the device will have on audio streaming and Internet radio. Still, like this article alludes to, the high-profile attention and ubiquitous hype that the device has garnered up to now, the day of its actual consumer release, has hammered the idea of the confluence of music and mobility into the global imagination in a way we really haven't seen before. Potential shortcomings aside, that is probably good news for online music of all varieties. -- DM x

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From CMJ: "A number of Internet radio stations will be joining together on July 1 in San Francisco venue Bottom Of The Hill for a benefit to raise money for SaveNetRadio's final two-week campaign against the upcoming July 15 ruling to increase royalties on all webcasters.

"Organizers Corey Denis (who knows first hand how important Internet radio is as VP of Integrated Marketing at San Francisco indie label Reapandsow) and Internet stations Soma FM, Pandora, BAGel Radio, among others, will also help increase awareness of the harsh realities should the ruling go into effect...

"Denis explains, 'Without webcasting, music diversity — the cornerstone of independent music — is choked out of existence... '

"And hey—Nancy Pelosi and Arnold Schwarzenegger were also invited, so what more do you need?"