Money, It’s a Gas

Photo by Evoke — Creative Commons License Some Rights Reserved

Pink Floyd’s song Money might be the perfect anthem for the fight against a US Copyright Office rule change that appears to target independent webcasters, a.k.a. internet radio.

A government committee is hearing a lot of sound about the proposed performance royalty payment structure which would essentially shut down these music webcasters.

Every song has two copyrights attached: one is owned by the song writer or music publisher; the second is the “performance copyright” that is owned by the recording artist or, more likely, the artist’s record company.

All radio stations, including satellite and webcasters, pay royalties to the first category — song writers/music publishers — through organizations such as ASCAP or BMI.

Traditionally, radio stations in the US have not paid performance copyrights because broadcasters have argued that airplay is a promotional tool for the record companies that enhances their sales. (The record industry has always more than agreed — payola, anyone?)

However, since 1995 the record industry has been pushing the government to recognize that there is a difference between access to a song on the radio (analog) and on the web (digital). The latter is better for copying which hurts, rather than helps, sales. So, webcasters should be responsible for the performance royalties to be set by the US government.

No doubt cd sales are down, worldwide. No doubt iTunes commands 75% of all digital music sales. No doubt the iPod accounts for around 80% of all digital music devices. Should we doubt that independent webcasters might be helping sales? Should we doubt that this legislation would very much favor the large media companies that also stream on the web?

For those broadcasting solely on the web the US Copyright Office wants performance royalty fees to be based on the number of people listening, as opposed to the current system of royalty based solely on a percentage of revenue.

What would be the difference? According to Ann’s favorite webcasting station, Radio Paradise, their payment would jump from 12% of their revenue to 125% of revenue — in other words, they are out of business.

From their calculations, under the new rules a site with 1,000 listeners would owe $134,000 in royalties during 2007, plus $98,000 in back payments for 2006. In 2008 the fee would be $171,000 and $220,000 in 2009.

Webcasters already operate under rules designed to prevent digital copying: They are not allowed to announce upcoming songs; They are not allowed to play more than 2 consecutive songs by the same artist; They are not allowed to play more than 4 songs over a 3-hour period by the same artist; They are not allowed to offer portable recording devices. None of these restrictions is true for traditional radio companies. (Remember, “Is it Live or Is it Memorex?”)

Is this the sound of government bias against the small-time webcaster in favor of the larger multi-platform company?

To participate in a campaign to keep independent webcasters in the pink, as opposed to red, check out Bill Goldsmith’s “View from Paradise.”

To learn more about the process, check out Kurt Hanson’s Radio and Internet Newsletter.

To make art, let’s get The Buggles to do a rewrite: strike “video,” add “internet.”

- Bill Reichblum

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One Response to “Money, It’s a Gas”

  1. KadmusArts Playlist » Blog Archive » Money
    March 14th, 2007 08:15

    [...] As a special tribute to the oh-so-brilliant decision by the Copyright Royalty Board to ensure the well-being of musicians by guaranteeing that all music will be broadcast solely by oligopolies (e.g., Clear Channel), this playlist will focus on the topic of money in song. As will be clear from the song lyrics, musicians are starry-eyed idealists, who would be taken advantage of by the rapacious indie Webcasters, were it not for the benign and wise oversight of the RIAA: [...]

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