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News From Audio Graphics:
Publisher's Note: The following is from Paul Gathard at Barnabas Road Media, Inc..
SoundExchange and Internet Radio: Where's the Progress? |
Can SoundExchange and Webcasters Solve the Internet Radio Copyright Royalty Conflict Without External Help?
Will a wolf compromise with a rabbit or will the wolf simple kill and eat the rabbit?
SoundExchange is the wolf and they have been given some pretty big teeth by Congress via the Copyright Royalty Board Judge’s March 2007 decision. Small
webcasters are the rabbit in this case and they have neither big teeth nor sharp claws.
It appears the rabbit’s fuzzy loveable public appeal has had some impact on the lawmakers who allowed the wolf to get so ravenous in the first place, but
do lawmakers really think the wolf and the rabbit can somehow come to terms allowing both to coexist in peace without some further congressional
intervention?
Frankly, as long as SoundExchange has the March CRB ruling in their pocket, SoundExchange will have no motivation to negotiate from anything other than
their congressionally granted strength. Unless Congress first removes the previous CRB decision from the equation, SoundExchange has a duty to do the
bidding of its master.
Consequently, I would really be surprised if the RIAA willingly instructed SoundExchange to compromise and give away the strategic advantage the CRB
bestowed upon the recording industry.
My bigger fear is that large webcasters, who can afford a more liberal position of compromise, will negotiate with SoundExchange a deal suitable to them,
but that will force the rest of internet radio to shut down.
I first realized the impact of this potential when larger webcasters agreed to a per-channel cap of $50,000 and the same royalty rate as granted by the CRB
in March. The big webcasters could afford both, but the rest of the industry would still find itself in bankruptcy. This negotiated reality leads me to
think that only a power as broad as the US Congress could settle this issue without the carnage I envision taking place having left the negotiations to
only wealthy rabbits and a merciless big bad wolf.
So can SoundExchange and Webcasters work this deal out on their own without an Act of Congress? I personally don’t think SoundExchange and large webcasters
are capable of reaching a compromise that will be good for every party involved in internet radio without the help of new legislation.
The Internet Radio Equality Act may not be perfect, but it removes the unjust advantage granted the recording industry by the CRB decision and it applies a
reasonable minimum fee while giving webcasters an option as to how to report and pay performance royalty fees.
The proposed bill needs to have the music reporting method set as Aggregate Tuning Hours (ATH) and then almost all webcasters could comply without too much
technical reporting expense. Each provider’s ability to aggregate all channels into one ATH report would actually save administrative dollars.
Congress simply needs to require that of each dollar paid to SoundExchange a small percentage be retained by SoundExchange for administrative expenses. In
this manner, larger webcasters would pay more administrative fees as a product of increased and aggregated ATH volume.
I appeal to the House of Representatives and to the Senate to not accept a SoundExchange/Webcaster compromise that leaves 95% of the people involved in
internet radio without an internet radio station to operate.
I also plead with Representatives and Senators to not believe internet radio would be better off if the wolf was allowed to devour the poor and weaker
rabbits from the internet radio herd. Small webcasters and local radio stations serve small but important markets and provide community continuity not
found in larger national webcasts.
OK, so I am prejudice in favor of internet radio. This fact alone does not mean I am not empathetic to the plight of record labels and artists. Someday,
internet radio may be capable of providing the copyright royalty revenue so justly deserved, but that day is not today.
The danger in using Congress to snare the rabbits is that sometimes during the heated chase the wolf gets caught in the trap instead. Congress should
finish what it started. The Internet Radio Equality Act should be made law with one exception. The year 2006 royalties should be left as reported and paid.
The new law should be made effective as of January 1, 2007 and run through December 31, 2011.
Let's not make the Internet Radio Equality Act a hare short for 5 full years.
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Submitted by: Paul Gathard - Email Paul
Barnabas Road Media, Inc.
Indianapolis, Indiana
Comments may be published.
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