"This is like deja-vu all over again" was the famous quote from Yogi Berra. There's something unpleasantly familiar about the latest set of royalty rates for Webcast radio just announced by the Copyright Royalty Board. We did pretty much this same thing back in the fall of 2002 -- it stunk to high heaven then, and it looks like an even bigger pile of crap now.
Basically the way it works is this -- the record companies feel like they got screwed on the broadcast radio thing, so they've managed to finagle a 'per-performance' royalty requirement for digital broadcast of songs. So even after you've coughed up your
protection money royaties to BMI, ASCAP, SESAC, or whomever, for the tracks in your playlist, you still have to pay a per-play, per-listener 'performance royalty' to SoundExchange.
This means that a hobbyist Webcaster is expected to pay a royalty fee each time an individual listener hears a particular track, but a mega-corporation like Clear Channel pays zilch per-performance to broadcast the same song.
To add insult to injury here, Congress has given the RIAA a free pass -- a 'monopoly exception' -- to negotiate on the behalf of all artists who produce music. So even if artists don't want the record company goons 'negotiating' ("That's a real nice Internet radio stream you have there. It'd be a shame if something happened to it.") for them, there's no established, obvious way to opt out.
The system does still allow for artists to negotiate specific agreements of their own on a case-by-case basis. (Having the freedom to negotiate a contract with whomever you want is one of those pesky free-market fundamentals that must drive those record-label dudes completely up a tree.)
So when this royalty shit first hit the fan back in '02 -- rather than paying these silly people at SoundExchange actual cash to stream the downtempo electronica groove tracks on my not-for-profit Webcast radio station, EpiphanyRadio, I decided I'd actually try going the 'royalty-free wavier' route.
In October of 2002, I threw out the entire playlist and started over from scratch. Since then, each and every track is streamed with the explicit permission of the artist, with an understanding that I pay absolutely no royalties of any kind -- not to BMI, ASCAP, SESAC, and certainly not the laughable 'performance royalties' the RIAA has managed to scam out of a compliant Congress. (I should add that we also stream tracks from Netlabels like Monotonik or Kahvi Collective who explicitly state on their site that the music is freely distributable as long as you're not selling it.)
I get stuff in e-mail, CDs come in the mail to my house -- I pay no royalty fees, and the artists and labels get free promotion for their music.
These new royalty fees are interesting, because the first go-round with all this drove me to try the all-indie, 100% RIAA-free format -- with far more success that I initially anticipated. Now it seems they want to squeeze the poor hobbyists even more. My guess is that the short-term effect will be a lot of small streams going under. But the longer-term effect may be to push people even further from mainstream music, at least online -- people have had Webcast radio long enough that they're not going to go back to the lowest-common-denominator crap shoveled at them on FM radio.
Seeing this happening again now -- with an even more outrageous fee schedule -- makes me doubly happy that I've already opted out of that horrible, corrupt system. It turned out to be a beautiful thing, because some of these indie guys are amazing, creative geniuses, and have something really worthy of being heard. Now the stream has a really sweet playlist -- and it's all completely immune to the predations of despicable thugs like the RIAA and their ilk.
Maybe some other Webcast radio stations will take this change as an opportunity to follow suit, and angle toward indie music and direct communication with the artists.
The RIAA are only hurting themselves in the long run.
See my essay in the booklet for the netBloc vol. 3 release, for my take on the situation.
netBloc vol. 3 will be released on Friday March 14th.