Why Does The RIAA Hate Webcasters? Webcasters Don't Play Very Much RIAA Music

from the nothing-like-a-little-competitive-pressure,-huh? dept

Mon, Jul 30th 2007 6:54am — Mike Masnick

Back in March, when the word came out that the new royalty rates for webcasting were much higher than in the past, we were confused. After all, webcasting helps promote music -- so why would the RIAA (and its SoundExchange spinoff) want to set rates so high that it would kill off this promotional channel? The answer isn't that hard to figure out. Traditional radio, of course, is dominated by a few similarly formated stations that all play RIAA-backed music. 87% of the music you hear on the radio is from an RIAA-member record label. However, when it comes to music on webcasts, the story is quite different. Jon Healy, at the LA Times, points out that only 44% of music on webcasts are from RIAA labels. This, at least, based on the findings of Live365, one of the larger webcasting services out there. So, with more than half the songs coming from non-RIAA labels, no wonder they're less interested in keeping webcasts alive. And, of course, the situation really is a win-win for the RIAA (in the short-term). It either kills off those webcasters who don't contribute to the homogenization of music, or it forces them to pay large sums even if they only play non-RIAA music. Of course, this is a strategy guaranteed to backfire in the long run, as it simply pisses off even more music fans who will simply look elsewhere for music.

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Filed Under: music, radio, riaa, webcasting
Companies: riaa

34 Comments

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Anonymous Coward, 30 Jul 2007 @ 7:14am

I don't get it...
With everything the RIAA does, it almost seems as if they're asking people to pirate music.
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Wolfger, 30 Jul 2007 @ 7:19am

Arrrrrr!
Let's send the RIAA companies to the briny deep.
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John Doe, 30 Jul 2007 @ 7:27am

Just another one of them "WTF are they thinking?"
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RT Cunningham (profile), 30 Jul 2007 @ 7:50am

The RIAA is DOOMED to Extinction
They just don't know it yet. The long arm of the RIAA doesn't exist in a lot of other countries where the torrent services are set up. Piracy is running rampant and it's because of the RIAA's tactics and price-gouging that they've been doing for years.
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Anonymous Coward, 30 Jul 2007 @ 8:36am

Come collect from me. Throw me in jail. I dare you.
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Anonaymous of Course, 30 Jul 2007 @ 8:37am

Go ahead, shoot off your foot.
I'm looking forward to webcasters being 100% RIAA
content free and many great indie artists making
a fair profit from their work. Which they rarely
received from the RIAA thugs.
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Shane C, 30 Jul 2007 @ 8:38am

Negotiate directly with the labels.
I wrote this opinion piece back in June. Although the situation has changed somewhat, I think the basic idea still applies.

...
Now, the question that everyone has been asking from the start of this fiasco back in April has been "what are they doing?" They keep talking about how anything less then the outrageous fees dictated by the CRB will leave the artists "desecrated, and homeless." Anyone with a couple hours in an econ. class will tell you that the artists won't get anything if there is no means to advertise their goods. Furthermore, basic math will tell you that if a company has to pay 1300% of it's revenue (that's money coming in, not profit left over) to stay open, it won't stay open long.
How many people would spend $20 on a CD with music that they have never heard before, from a band that they don't know? My guess is, not many. Fact of the matter is, people buy the songs they hear repeatedly. Why else would the labels utilize "Payola" to promote their songs? ( ie: Sony / J.Lo report on Fox)
I know what some of you are thinking. "RIAA...err...Soundexchange is trying to close down the small stations that can't afford to pay these rates. The big corporations will streamline their operations, lay off a few people, and pay the fees." That's not the case.
The big corporations (ie: AOL, Yahoo, MTV, Pandora, Live 365, Real Networks) have all come out declaring that if the choice is between paying 773% of what satellite radio pays, or shutting down their operations, they will choose the latter. Obviously these companies don't want to close down, giving up all their hard work, let alone revenue streams. So what will they be forced to do when they can't afford the "standard, everyone pays the same amount" fees that have been dictated?
Negotiate directly with the labels.
The law explicitly allows companies to negotiate directly with the "copyright holder" (ie: Universal Music Group, Sony BMG, Warner Music, EMI Group) for a reduced fee structure, less than the "common" compulsory agreement.
This does nothing but benefit the labels:
* More money. -- Remember, no Soundexchange, no requirement for 50% of the collected revenue to go to the artists. (you know, those pesky people that they can't seem to find anyway)
*Label controlled set lists. -- "You agreed right here in this contract that if we let you play the music, we got to choose what music gets played." (Independent artists? What independent artists? Go play some Britney Spears!)
*Limited numbers of *casters. -- It's easier to control a small group. If there are a limited amount of "stations" playing music, they can justifiably dictate that they play only the most "popular" music, that appeals to the masses (ie: the 12-22 age range). By the way, this market happens to be what they make most of their money.
*Limited format choices. -- If you believe that maintaining Xnth different genres is easy, or desired, think again. ("Oh, we got both kinds. We got country *and* western.")

Shane Chambers
General Manager
Big Blue Swing.com
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Anonymous Coward, 30 Jul 2007 @ 8:41am

The RIAA is a pawn of the NAB. If you're going to loathe an organization you should loathe one who actually has power.

The RIAA is irrelevant.

Fear the NAB
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Anonymous Poster (profile), 30 Jul 2007 @ 8:42am

Re: I don't get it...
Hey, if they want me to do it, who am I to argue with them?
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Anonymous Coward, 30 Jul 2007 @ 8:43am

Re: The RIAA is DOOMED to Extinction
Yeah, the record execs know that too. But they'll all retire rich, laughing all the way to the bank and nothing at this point is going to change that. The only question is how rich will they be by then? Milking the current system is a lot more expedient that building new business models when you've just got your eye on a golden parachute anyway.
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ConceptJunkie (profile), 30 Jul 2007 @ 8:49am

They hate everyone
The RIAA just hates everyone. They think they are owed a shamefully lucrative living without effort and without having to adapt to a changing marketplace.

They are everything that is bad about capitalism and none of what is good.
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Anonymous Poster (profile), 30 Jul 2007 @ 8:51am

Re: They hate everyone
Amen.
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CharlieHorse, 30 Jul 2007 @ 9:05am

head on over to the EFF ...
and read more about the SoundExchange crap.

IANAL - but, it seems that if I am an indy - not associated with any RIAA company or Soundexchange - that I *should* be able to play/webcast music that I have created (or that I have legally contracted from other indy and/or non-affiliated bands, producers, etc.) without having to pay soundexchange or any other riaa front one nickel. anything other than that would seem to be tortious interference with my right to enter into legal contract with whomever I please.

any lawyers out there who can put this in perspective ?
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Nick (profile), 30 Jul 2007 @ 9:58am

declare independence and start a revolution
Soundexchange thinks they can tax *all* music just like the British taxed the American colonies. Time to declare independence and start a revolutionary war against RIAA and NAB!

I think there is going to be a movement like a poster above mentioned. A branding campaign for Internet Radio stations: 100% RIAA free and proud!
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Anonymous Coward, 30 Jul 2007 @ 10:02am

The post comes close to actually recognizing what is going on the the RIAA. It isn't about the money. It is about control. Webcasters aren't easy to control so the RIAA wants to wipe them out.

RIAA has to have control of the recording industry in order to perpetuate its formula. Rap and what passes for music at the RIAA are easy to mass produce; no innovation required (in fact innovation just muddies the water). Their problem is people outside their system that keep innovating and sometimes making a quality product that becomes popular. The RIAA requires control in order to make their spreadsheet-governed model work.
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Anonymous Coward, 30 Jul 2007 @ 10:14am

why dont indie artists just announce they dont associate with the RIAA and are proud to offer music for the modern generation. ....or something to that effect...might that make some impact on those retards at the RIAA? if the RIAA bullies consumers, why dont the artists who dont affiliate with the RIAA start bullying the RIAA. I have to wonder...
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Anonymous Coward, 30 Jul 2007 @ 10:16am

lol. what are they going to do? tell them you cant make music anymore?
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Mystified, 30 Jul 2007 @ 10:40am

Re: head on over to the EFF ...
I'm also not a lawyer, but if I start a webcast that only plays indy music and nothing from RIAA labels, then RIAA and SoundExchange had better not try to bill me. That would be like expecting me to pay alcohol taxes on soda.

A couple hundred years ago there was a big stink over taxation without representation. Anybody interested in a tea party over at the NAB, RIAA & MPAA buildings?
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Anonymous Coward, 30 Jul 2007 @ 10:47am

Re: Re: head on over to the EFF ...
Just keep on streaming and let them come try and throw you in jail. Conduct your business as ethically as possible and throw yourself on the mercy of society. Its time for some civil disobedience. And join the EFF today!
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bob bob, 30 Jul 2007 @ 10:53am

So, RIAA and SoundExchange will collect money for even non-RIAA music.
How is this not racketeering?
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Anonymous Coward, 30 Jul 2007 @ 11:12am

Re:
Because RIAA has the heart to do away with the bother of figuring who owes who what and handle all that themselves. If everyone wanted to work out individual agreements with individual artists, the industry would grind to a halt.
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Hulser, 30 Jul 2007 @ 11:52am

Re: Re:
Because RIAA has the heart to do away with the bother of figuring who owes who what and handle all that themselves. If everyone wanted to work out individual agreements with individual artists, the industry would grind to a halt.
Well, first off, I don't think even the RIAA would claim what they are doing is for the "heart" for any other emotional reason. It's pure business.
What you appear to be saying is that it's too much trouble for the RIAA to determine who is playing RIAA music and who isn't, so it's OK to just charge everyone. The problem with this logic is that the law is not set up to protect a given business model, but the consumer. You say that "the industry would grind to a halt" if the RIAA couldn't indiscriminately charge their webcast fees. Yes...and? Given the current state of "the industry", I think there's a major portion of the world population who wouldn't mind this "catastrophe" if it meant breaking the control the RIAA has on the marketplace of music.
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Chronno S. Trigger, 30 Jul 2007 @ 2:01pm

Re: Re: Re:
I guess you missed it, so did AC up there, but he forgot to put in the "end sarcasm" at the end of his comment.

Remember people: You must let us know that your joking or people will take it seriously.
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Anonymous Coward, 30 Jul 2007 @ 3:19pm

RIAA pressuring Canada Hair Salons?
It seems that Canada is now pressuring hair salon's to pay up for playing music.

http://www.theglobeandmail.com/servlet/story/RTGAM.20070720.whair0720/BNStory/National/

"The minimum fee is about $95 for salons up to 825 square feet."

Perhaps they will lobby for royalties if a song is played at a wedding or a private party with more than 5 people present.

Maybe we will all be charged a fee on our income tax, and will need to prove our innocents to be exempt.

When will it end?
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Shane C, 30 Jul 2007 @ 5:06pm

First part of
OK, I skipped the background when I posted my comments earlier. I presumed that people reading techdirt would already have the background, and not need me to repeat it for them.
Perhaps I was wrong, as there appears to be some misunderstanding of what and who the SoundExchange is.
First off, the RIAA is NOT a "pawn of the NAB." Up till recently, the NAB, and the RIAA have had a very close relationship (cousins sharing the same bed). However, there seems to be a little bit of a family feud going on recently. Presumably this was instigated when SoundExchange proclaimed that members of the NAB were "stealing from the artists," by not paying them royalties. These decelerations have led to the proposed performance royalty changes currently in congressional hearings.
The NAB, seeing the winds of change, has recently thrown it's full lobbing power behind the Internet Radio Equality Act. I can only presume that they figure they'll loose their royalty free status sometime in the near future, and want to limit the damages.

SoundExchange might as well be called RIAA, in my opinion. "SoundExchange was created in 2000 as an unincorporated division of the RIAA. In September 2003, SoundExchange was spun off as an independent organization."[wikipedia]
SoundExchange doesn't think they can "tax all music." The Library of Congress / Copyright Office declared they can collect royalties on all performed music. If you're going to place blame, place it in the right people. "Beginning on January 1, 2003, SoundExchange became the only collective designated by the Copyright Office to distribute statutory royalties to copyright owners and performers entitled under 17 U.S.C. 5 114(g)(2)." [wikipedia]

Not all performances require payment of royalties to SoundExchange. Statutory licensing provides for direct contractual agreements between the copyright holder, and licensee. For example, if a station decides to only play non-RIAA music, it has two licensing options. First, the station can contact every copyright holder in their library, and cut a deal direct. In many cases, particularly with small non-represented artists, this is often limited to "publicity for performance." Royalties for these independently contracted songs do not have to be paid to SoundExchange.
The second method is the station can purchase a "statutory license" from SoundExchange. The statutory license basically provides them with a legal CYA in case the copyright holder decides they don't want anyone playing their music. With the statutory license in hand, the most the copyright holder can do is demand that everyone stop using the performance with out a direct contract. (note the "everyone," as this right can not be selectively enforced) The copyright holder can only then sue if the "infringing entity" doesn't comply with the demand. They can not sue the station up till that point, because the station has a "get-out-of-lawsuit-free" statutory license.

Shane Chambers
General Mangager
Big Blue Swing.com
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Anonymous Coward, 30 Jul 2007 @ 7:15pm

Re: Re: Re: Re:
Remember people: You must let us know that your joking or people will take it seriously.
You wish.
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Anonymous Coward, 30 Jul 2007 @ 7:22pm

Re: head on over to the EFF ...
IANAL - but, it seems that if I am an indy - not associated with any RIAA company or Soundexchange - that I *should* be able to play/webcast music that I have created (or that I have legally contracted from other indy and/or non-affiliated bands, producers, etc.) without having to pay soundexchange or any other riaa front one nickel.
It may seem that it should be that way, but if you have enough money you can apparently buy politicians and laws that say otherwise.

anything other than that would seem to be tortious interference with my right to enter into legal contract with whomever I please.
Again, not if you can buy laws that say otherwise.
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vargas, 30 Jul 2007 @ 9:56pm

webcasters
The music industry is run by goons. They make it next to impossible for webcasters to play copyrighted works because of the frighteningly prohibitive costs and confusing fees and licenses you have to get but they are upset because webcasters don't play RIAA artists?

I'll be glad when they eventually disintegrate as an industry.
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mike allen, 30 Jul 2007 @ 11:00pm

EFF ??? NAB RIAA also to declair war
First what is EFF ??????
The Riaa have turned on the NAB wanting them to pay high rates !!!!
The NAB have stated they support ihe internet radio equality act.
The UK record companies have set even higher rates than the RIAA.
The whole thing is a total mess. the guy who said just keep streaming and stuff em is right like the the Beatles said REVOLUTION.
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John, 31 Jul 2007 @ 8:03am

RIAA: enjoy it while you can
I hate to admit, half the music I like is on RIAA-linked labels...ah well! Support encrypted file-sharing: http://www.gigatribe.com
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uncledeercamp.com, 31 Jul 2007 @ 11:32am

SoundExchange
The organization sound exchange are basically the Nazi's of our time. Instead of throwing children into the ovens. Mrs.Fienstien/Senator and her lobbies't/RIAA friends are stamping out the hopes and dreams of up and coming Acts from ever making it to the big time from grass roots beginnings. All this for the control of cell phone web-casting and its huge profits. In the Euro's this has already came to fruition and life is allot grayer there. This is America dam it we support free choice and somewhat free listening.Call and write our friends in Washington and tell them you want this miscarriage of justice aborted along with the people that caused it.
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keen, 13 Apr 2010 @ 12:18pm

webcasters
@vargas
yes i agree with you.web casters don't play RIAA artists.thanks for your sound.
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