I had to go back and check the headlines on this because they all point to SoundExchange reaching a deal with webcasters in a "confidential" meeting held in New York Thursday. Here's how these radio industry trade mag headlines read.
Radio & Records: "Update: Major Labels, Webcasters Make Rates Deal"
Friday Morning Quarterback: "SoundExchange Reaches Agreement On Web Royalty Cap"
Inside Radio: "Labels and webcasters strike a deal."
Radio Ink: "SoundExchange, Webcasters Agree On Minimum Fee Cap"
All Access: "SoundExchange Agrees On Royalty Cap With Major Webcasters..."
But, wait. Let's check the parties attending this confidential meeting: AOL, Yahoo! LaunchCast, Pandora, Live365, MTV, and RealNetworks.
Nope. I didn't think there were any non-multimillion-dollar-backed radio stations in on this. What? The lone item announced from this meeting was that a $50,000 cap was placed on the amount to be paid, without regard for the number of stations these multi-stationed companies run. Well... that is a victory! Now, each of these largest-of-the-large internet radio industry companies can continue streaming over one hundred stations, because the $500 per station charge leveled by CRB (and needing to be paid to SoundExchange) is gone. $50 grand, and they can run as many stations as desired. So everyone breath easy. $50,000 to any of the above companies is pocket change.
What's that? The royalty rates are the same? So, thousands of smaller webcasters are still stuck paying enormously high performance royalty rates that are within reach of those bigger companies listed above. Then nothing's been solved relative to independent internet radio stations. Correct?
Aaaahhh, but SoundExchanged issued a letter and offer on Tuesday to hundreds of small webcasters, with a line in the cover letter reading: "At the request of members of Congress and congressional committees, SoundExchange is making the attached offer available to small commercial webcasters which do not exceed an annual revenue threshold or a monthly threshold on aggregate tuning hours."
Continuing to read through the offer makes you say "what?"
There are so many caveats contained within; do the math and you'll see that whatever is being offered is meaningless.
For example, try this sentence: "Please note that SoundExchange is making this offer only on behalf of its copyright
owner members and has no authority to make this offer on behalf of non-members of SoundExchange." This means that all bets are off
for this rate reduction unless the artists that stations play are on the 20,000 or so list of "SoundExchange" member artists. That's not really a deal.
In the agreement sent with this letter, SoundExchange plainly states: "It is the intent of the parties that the rates and terms set forth herein (including any rate structure, definitions, terms, conditions, or notice and recordkeeping requirements) shall be considered as a compromise motivated by the unique business, economic and political circumstances of small webcasters, copyright owners, and performers rather than as matters that would have been negotiated in the marketplace between a willing buyer and a willing seller...."
Rephrased in shorter version: "You can't use this to justify that our lowering of the CRB's requested rate means we realize that you'll go under if we don't."
And, we've not gotten to the most restrictive portion of the agreement sent to small webcasters, the part where they are limited to how big they may grow. If a small webcaster reaches success and pulls in more than $1.25 million in gross revenue, the rate reduction vaporizes and reverts back to the exceedingly high royalty rates that make running an internet radio station unprofitable unless you are one of the big, big companies that participated in Thursday's meeting.
Want to talk about the reporting requirements, too? Actually, we'll just let it be said that this is the easy part.
While there are a few internet radio execs popping champagne corks today, and some persons in the radio industry feeling better because it's now reported that a deal is set, the highest hurdle has not been approached - and it looks like it won't be addressed, either. You see, this offer made to small webcasters by SoundExchange HAS to be accepted by September 14 or everything is pulled from the table. That is, except the $50,000 station cap fee.
Those are swell headlines we've been treated to about SoundExchange and webcasters. Only, this "deal" really has nothing to do with the thousands of independently owned stations that are fighting for their online life. And, there's nothing in the SoundExchange offer made on Tuesday that a sane small independent webcaster would sign. It's just that if they don't, there's no alternative.
SoundExchange is coming off like it's making reasonable adjustments to its unreasonable rate monopoly, bestowed by the Copyright Royalty Board. Therefore, Washington is thinking "there's progress being made, and the Internet Radio Equality Act doesn't need to be passed."
This leaves independent internet radio stations no better off than one month ago; face high fees, or agree to stunt your growth so you never become a truly successful online radio station which can compete with the companies that were in on the meeting on... oh, never mind.
Maybe the first sentence under the headlines we all saw on Thursday should have read: "SoundExchange and major online radio groups scratch each other's back - and smaller, independent internet radio stations be damned."
Don't kid yourself into thinking anything is resolved.
The major issue of high performance royalty rates hasn't been discussed with any smaller webcaster. It's been mandated as a take-it-or-leave-it offer by SoundExchange.
But, that wasn't mentioned in any headline or story that I saw on Thursday.
From: Raymond
Well, in the 18th Century the Luddites in England were eventually motivated to destroy the machines which were vexing them.
Maybe it needs an Association of Vexed Internet Radio and Music Industry Artists (AVI-MARIA) to make a deal with ALL artists to once and for all strike
and destroy the monopoly these scum who run the recording industry have over us.
From: Cliff D
I agree with Raymond, I knew Sound Exchange and the CRB as well as the treacherous RIAA would start making behind the back, conquer and divide deals when they didn't get their regular 9/10 of the pie deal like they have manipulated for years!
To be really honest with you I believe we will have to go to the extremes Raymond quoted below to resolve our rights and freedoms with this mangy scum who run the recording industry have over us.
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