BY PAUL MALONEY
A recent letter from SoundExchange to its members falsely smears the SaveNetRadio coalition as a front for something it calls "BigNetRadio" and asks members for continued support as "artist's"performance royalties are "attacked."

With the letter, SoundExchange continues its campaign to misinform its members regarding the nature of the webcast royalty issue, misrepresent the Internet Radio Equality Act, and make unsubstantiated claims in an effort to portray webcasters as greedy operators of highly lucrative multi-billion dollar companies.

Congratulations, webcasters!
You're captains of industry!
The letter reads, "We believe when Congress takes a hard look behind this curtain of misinformation being fostered by SaveNetRadio, their campaign for BigNetRadio will be fully revealed for what it is: a cash grab by BigNetRadio."

Citing "facts" to support this portrayal of royalty relief efforts as a "cash grab," SoundExchange claims, "14 of the 20 largest webcasters, some who comprise DiMA and SaveNetRadio, have market capitalization ranging from one billion to several hundred billion dollars," and "The other large webcasters have significant venture capital backing." Naturally, SoundExchange fails to mention the names of these 14 multi-billion-dollar public companies, or what it considers "significant venture capital backing" for the other six operations.

SoundExchange does cite CBS' recent $280 million acquisition of Last.fm, and bemoans the fact that "none of (this money) went to artists or copyright holders" (read: labels). What isn't explained is why "vendors" would expect to receive a share of proceeds from the sale of "a customer" (or the fact that artists receive no share of the enormous sale prices of major label groups as they consolidate).

What would be the industry's highest royalty "unspeakably low" to SoundExchange
Much of what the letter suggests has been previously (and repeatedly) refuted by webcasters. For instance, SoundExchange describes the IREA's 7.5%-of-revenue provision as "unspeakably low," and "an artist paid subsidy to multi-billion dollar corporations." But as Radio Paradise founder Bill Goldsmith argues (in RAIN Reader Feedback, here), "The 7.5% of gross revenue rate that would be set by the legislation that the RIAA is so aghast about would bethe highest royalty paid by any class of broadcaster in the U.S., and among the highest anywhere in the world."

On this note, webcasters facing an almost certain demise under a royalty structure that would require them to pay a huge proportion (in some cases, multiples) of their revenue might be interested in the letter's note about satellite radio royalties. CRB hearings have started for sound recording royalties for XM/Sirius for 2007-2012, and the satellite operators are arguing for a royalty rate of "less than 1% of revenue" (which SoundExchange calls "not only laughable but downright insulting."

RAIN's RIAA "myths" vs. reality
As mentioned above, webcasters have heard much of this propaganda before. In letters like this, in media interviews, and in press releases, SoundExchange spokespeople  like John Simson purport to dispel the "myths" surrounding webcasters' claims. (What actually, happens, of course, is that real facts get obscured, selectively cited, or altogether omitted as the label organization portrays itself as a guardian of artists' interests.)

To bring some real clarity to the issues, we've created a list of alleged "myths" supposedly dispelled by SoundExchange/RIAA, the "facts" they cite in their arguments, and the real facts behind their posturing. We hope this table might be a helpful reference tool to webcasters who get the opportunity to communicate with lawmakers and the press.

Please see the table here (or, click the image), and feel free to bookmark it and direct journalists and legislative aides to it.

Read the entire unedited SoundExchange letter here.

From CNET News: "The RIAA has already mounted a court challenge against XM Satellite Radio over gadgets like the Pioneer Inno that allow consumers to trap individual songs originally played on air in alleged violation of copyright.

"Now the industry group is urging that issue to be one of the deciding factors for federal regulators weighing the proposed multibillion-dollar union of XM and its sole competitor, Sirius Satellite radio...

"[T]he RIAA said it's concerned that both satellite radio companies have invested in technologies that allow them to shortchange artists on the distribution side 'by giving users the ability to download copyrighted sound recordings to portable devices, effectively transforming a radio-like service into a digital distribution subscription service like Rhapsody or Napster.'

"A merger could bolster those investments and 'seriously threaten the viability of the music industry as a whole,' the RIAA wrote. The group also called on the FCC to require the merged companies to pay higher royalty rates in general to the record industry, arguing the firms are 'no longer new, struggling companies' that can get away with paying what it called 'below-market rates.'"

Read the entire article at CNET News.

From Digital Music News: "Mobile-focused radio provider mSpot has now licensed programming from the ABC Radio Network, an expansive move by both companies. 

"The deal involves programming from 14 different terrestrial stations...  'By offering our content on mSpot, we are rapidly expanding both the range and reach of our customer base,' said John Rosso, senior vice president of Affiliate Relations and Digital Media at ABC Radio Networks...

"For mSpot, the ABC deal adds to a considerable content portfolio.  The provider also carries stations from NPR, Fox Sports, Radio Disney, Clear Channel, Marketwatch, and CBS Radio.  It also delivers live broadcasts from roughly 100 terrestrial stations in the United States, and provides that content to [telephone] operators like Sprint, US Cellular, Telus, and Bell Mobility."

Read the entire article at Digital Music News.

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