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mortslim
2009-07-07, 15:38
Online radio stations strike big deal on royalties
By JOELLE TESSLER, AP Technology Writer - Tue Jul 7, 2009 2:41PM EDT

WASHINGTON - The future of Internet radio appears more secure after a handful of online stations reached an agreement Tuesday to head off a potentially crippling increase in copyright royalty rates.

The deal is the product of two years of negotiations between webcasters and copyright holders. In March 2007, a ruling by the federal Copyright Royalty Board dramatically raised the rates that Internet radio stations must pay artists and recording labels — leading many online radio stations to warn that the new rates would put them out of business by eating up as much as 70 percent of revenue.

At least one popular online radio service — Pandora Media of Oakland, Calif., which derives much of its revenue from advertising — said the new agreement will help ensure its survival.

"For us, it's hard to overstate how significant this is," said Pandora founder Tim Westergren. "It was either this or an ugly alternative."

The revenue-sharing deal announced Tuesday is between SoundExchange, a nonprofit that collects royalties for recording copyright owners from digital radio services, and three smaller webcasters: radioIO, Digitally Imported and AccuRadio.

Westergren said Pandora plans to sign on to the new royalty terms too. And Jonathan Potter, executive director of the Digital Media Association, which represents webcasters and other online media companies, predicted some of the association's other members will also join the deal.

Under the agreement, large commercial webcasters will pay copyright owners up to 25 percent of their revenue or a "per-performance" rate that is below the rates set by the Copyright Royalty Board. Smaller webcasters will pay either a percent of revenue or a percent of expenses.

In a statement, SoundExchange executive director John Simson said the deal will give webcasters a chance to "flesh out various business models" and give artists and other copyright holders the opportunity to "share in the success their recordings generate."

Lawmakers also praised the agreement. Congress has already passed legislation making any deal reached between webcasters and SoundExchange legally binding. Because Internet radio companies operate under a government license, these deals need congressional authorization.

Already this year, SoundExchange struck new online royalty agreements with the National Association of Broadcasters and the Corporation for Public Broadcasting.

Traditional AM and FM broadcasters are exempt from copyright royalty rates for over-the-air radio play, because that airplay is thought to provide free promotion for artists and labels. But the broadcasters are subject to the new rates for any songs streamed over radio station Web sites.

toby10
2009-07-08, 03:40
Thanks mortslim, I've been wondering where this situation was at.

What is not clear, and what I fear, is that this only resolves the issue for the bigger streaming operators and the smaller operators may still end up getting pushed out of the market. :(

I love the big boys in the market (Pandora, Slacker, Sky, DI, RadioIO, 181, AVRO, etc....) but probably 50% of my Internet Radio listening is from small single stream operators that may still get the boot. :(

Labarum
2009-07-10, 04:50
Here is a view on the subject

http://www.michaelrobertson.com/

autopilot
2009-07-10, 08:05
Some recent good news from the UK too - http://news.bbc.co.uk/1/hi/technology/8068154.stm

MrSinatra
2009-07-18, 04:47
i think that article is factually incorrect.

over the air FM/AM stations are NOT "exempt" from royalties, (what laughable hogwash!) they DO pay them, and pay them AGAIN if they stream, albeit under different terms. one doesn't cover the other.

secondly, i know of NO "gov't license" for interent only stations, but there may be something to that; i'm not 100% on that, but i doubt its the way the article portrayed.

NFLnut
2009-07-20, 22:13
Lawmakers also praised the agreement. Congress has already passed legislation making any deal reached between webcasters and SoundExchange legally binding. Because Internet radio companies operate under a government license, these deals need congressional authorization.


Wow! Do you mean that PRIVATE enterprises could POSSIBLY come together and solve problems WITHOUT GOVERNMENT help?!! Say it isn't so! I thought we were just too dumb to do things on our own!

snarlydwarf
2009-07-21, 15:55
Wow! Do you mean that PRIVATE enterprises could POSSIBLY come together and solve problems WITHOUT GOVERNMENT help?!! Say it isn't so! I thought we were just too dumb to do things on our own!

Depends on how you look at it: the rates set originally were impossible. (Especially for "on the fly" stations... Pandora has a stupidly large number of "stations", as does last.fm, rhapsody, etc.. Each would have had to pay an expensive base rate. ("BillyJoes favorite songs!" would count as a station, even if only one person listened, and even if he listened to it only once...)

Several congresscritters actually intervened and put the new rates on hold, forcing them to reconsider the rates....

So, yes, it was Government Intervention that deferred the original rate changes and forced a reconsideration.

Locuth
2009-07-30, 15:45
Internt stations will eventually end up paying the same kind of royalties AM/FM stations are paying now.
And theses fees will be payed for by commercials or listener fees.

At the latest when internet radio takes the place of traditional AM/FM broadcast.

MrSinatra
2009-09-02, 18:26
http://government.zdnet.com/?p=5290


Follow the money: If LAUNCH is interactive, then Yahoo (and thus, Pandora, and any damn webradio service in the world that lets you create “stations” or “channels”) would have to pay individual performance royalties for every song played. Big bucks for the RIAA! If not, they get “only” the statutory royalties set by the Copyright Royalty Board.

They lost at trial but Sony appealed. And lost

MrSinatra
2009-09-17, 14:27
http://blogs.zdnet.com/BTL/?p=24470

mal808
2009-09-19, 03:12
All these articles are all well and good from the end users perspective, but copyright holders ARE getting shafted by the likes of iTunes who are continually trying to devalue music.
Just because it isn't a physical product doesn't mean you shouldn't have to pay for it.
If you can't afford the costs your business model is flawed.
If you don't want to pay what's owed for the "BillyJoes favourite songs" station then don't set it up.
I agree there needs to be a reworking of the rights involved, and this appears to be happening, but there's a minimum value applied to music and if you you can't pay it then you need to reconsider your business model.

If I decide tomorrow that I want to sell computers, but I don't want to pay the wholesale price, I wouldn't get to throw a tantrum and demand dell or whoever supply me the pcs at half price coz my business can't afford them.
this royalty argument is a joke, music has been devalued enough, these companies are creaming it in profits, Music industry costs have dived in the past ten years, record labels wont even look at new artists unless they hand them an album that's 99% complete and yet the industry is still bitching and moaning about copyright holders fees.they need to pay up.

Rant over! :-D

gbruzzo
2009-09-28, 18:15
I agree with you

MrSinatra
2009-09-28, 18:46
i don't.

rrgmrg
2009-09-29, 09:01
Long live Pandora.

mark-e-mark
2009-10-29, 21:44
Many fees for use of copyrighted material, especially music, have been too high for too long. Historically, owners of copyrighted material could charge high fees because the distribution was tightly controlled. This is called exclusivity. The revenue potential is so high that the history of the music industry is rife with stories of theft and squander. It's understandable that many owners complain that they loose money in a new world of free information and open networks of sharing.

I for one, do not have compassion for those who lament disappearance of the old ways of commanding control of distribution. It's time for new business models that embrace the openness of the net.

Here's an example: www.cdbaby.com. You'll notice that the musicians set prices and label fees are set up front, and the musician retains ownership.