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Save Internet Music

Posted on May 22, 2007

Internet radio has provided an eclectic and independent alternative to the mainstream hit-oriented, payola-ridden music marketplace, but industry greed now threatens to wipe out the medium. Truthdig checks in with Frannie Wellings of Free Press to find out whether Internet radio stands a chance and what music fans can do to save it.

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James Harris: This is Truthdig.  James Harris sitting down with Josh Scheer, and on the phone, Frannie Wellings.  She is the associate policy director at Free Press, where she lobbies key national legislative and governmental staff on media and telecommunications issues.  Today we’re talking about something that is near and dear to our heart, and any of you guys out there who listen to podcasts, who listen to Internet radio.  There’s a possibility, at least in Josh’s mind, that Internet radio could go away.  So we thought that we’d talk to Frannie Wellings.  Frannie, can you make this plain for us?  What’s the status of Internet radio today?

Frannie Wellings: Sure, well, Internet radio is really at risk today.  A board called the Copyright Royalty Board has set Internet radio rates so high that many webcasters who are streaming music across the Web will actually have to go out of business.  They’ve set the rates so high that some of them ... it’s even at 150 percent of their revenue.  This applies to noncommercial radio, like NPR.  It applies to smaller webcasters who are playing the diverse music that isn’t found on regular radio stations.  It even applies to the larger webcasters like Yahoo who right now are trying to play a little bit more diverse music but will move to this sort of top four record companies’ kind of style of pop music if they are stuck with these rates as well.

Josh Scheer: I was reading the interview we had on Truthdig with Pandora’s Box founder.  It seemed interesting but he kind of made it seem that it was just affecting the Web, but you’re saying this actually affects small radio stations and emerging radio stations. 


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Wellings: It is just the Web, but groups like NPR actually are streaming a lot of their music now online.  So it’s their Internet radio operations of groups like National Public Radio that are going to be affected, which means that they really can’t expand to new technologies in the way they want to.  Because, for a group like NPR, their mission is to educate the public, to expand listenership, and this actually makes them fear their listeners, because with every new listener listening to every new song, they’re going to have to pay a bit more.  And that just goes against the grain of the mission of public broadcasting.

Scheer: Again, with this interview I was reading on our site—I read part of it, but then I was reading it obviously for the background on this issue—he was saying that terrestrial radio right now isn’t paying and satellite pays only a very little amount.  Is that the case?  Are they not paying when it’s broadcast over air in a kind of a terrestrial form?

Wellings: Exactly.  The broadcasters, regular terrestrial broadcasters, do not pay the actual artists and performers of the songs that you hear on the radio.  It’s sort of the problem with music where the RIAA, the recording industry and the record companies, tend to be the ones that reap the profits from songs and the actual musicians, performers, are not actually getting those profits.  With Web radio they actually are getting profits, and that’s part of the good part about Web radio.  We want to make sure that that stays, that that is the case, that that remains.  And satellite as well.  But the problem is that satellite has a reasonable fee.  The webcasters’ fee has been set so high that it’s just going to kill the medium, and that’s not going to do anything for artists in the end.  That’s actually going to hurt artists in the end.  So we want to set a fee that’s fair and balanced for everybody across the board so that artists are paid and webcasters can survive.

Scheer: So you’re not just advocating getting rid of fees altogether; you guys just want a reasonable fee. 

Wellings: Exactly. 

Harris: But what’s the fee?  NPR doesn’t play a whole lot of music, so what kind of fees are they up against versus somebody who’s playing Jay-Z, who’s playing Norah Jones?  What kind of fees do they have to pay?

Wellings: The problem is, it’s a little bit confusing.  For a group like NPR there is a minimum amount of songs, and for that they would pay a fee of $500 and then above that it goes to aggregate tuning hours, and so you’re looking at the number of listeners listening to the number of songs.  And for that most of the stations have analyzed how much they play and they think that they’re going to be paying a whole heck of a lot of money.  These fees are also backdated to the beginning of 2006, so many of these webcasters are going to owe millions of dollars, suddenly, as soon as this ruling goes through.

Harris: So this is as expensive as a million, so we couldn’t cover the cost if we put our three pocketbooks together here. [Chuckles.]

Wellings: You know, it would probably exceed your revenue.  That’s exactly the case. 


Scheer: Now this is an important question because there’s another issue that I want to clear up because, again, you read one thing and it says something different.  I’m a little bit confused.  This is only affecting music.  This isn’t affecting ... a podcast ... if we do a radio show that maybe we pick it up. ...  This is just for music, right?

Wellings: This is for songs. 

Scheer: For songs.

Wellings: Exactly. 

Scheer: Does this affect buffer music [music played beneath talking], too? 

Wellings: I don’t know the answer to that, but I believe that this is regular songs that are copyrighted.  Basically, there’s a group that’s called SoundExchange ... 

Scheer: Hmm.

Wellings: ... that’s been set up by the RIAA.  They’re the ones that are collecting the fees.  So SoundExchange finds an act, a musical act, and says, “OK, your music is being played on the Web.  This is how much you should be owed, we believe,” and they’re supposed to pay them.  Now that doesn’t all work out so well, SoundExchange.  It seems to be a little bit of a messy business there.  There isn’t any clear way of tracking what songs have been played, by which artists, and ensuring that that fee has gone to the actual artists.  But in the end, they’re the ones defining it.  So I would imagine it’s not the buffer music; it’s the regular music that you can find online.

Scheer: In their minds, do you think this like a rebirth of Napster?  Are they afraid this music is just being stolen and that they just can’t comprehend the technology?  Or is this just—?  It seems kind of vindictive if terrestrial radio doesn’t have to pay and Web radio does. 

Wellings: Hmm.

Scheer: People can’t download this music.  This isn’t stealing software.  This is just a radio station that happens to be based on the Web to avoid the FCC.

  Wellings: Exactly.  I think, though, that this is partially. ...  Everybody is grateful that Internet radio pays artists and performers.  This, I think, generally—to be blunt—comes from the greed of lawyers and of the recording industry who pushed too far for too much money.  And they’ve gotten their wishes, but at the same time, it’s the artists in the end who are going to be hurt.

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By JimmyJackFunk21, June 1, 2007 at 2:16 pm Link to this comment
(Unregistered commenter)

I use Mercora’s offerings, and this all makes me nervous. I really hope what the RIAA does not go through, but even if it does, it’ll be alright. Mercora has the “M” app, which lets me get my music wirelessly through my smartphone. So I’ll be fine…

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By Jacob, May 31, 2007 at 11:58 am Link to this comment
(Unregistered commenter)

The music industry has been ripping off the people for a long time.How much is enough? Greed is thier main ingriedient.It cost around 2 cents to make a cd and its sold for twenty bucks or more? Am i correct over and over and over again. Thats where it should end. This whole situation would go away if the people would just wise up and say you know what i dont need to have this music and not buy it. if everyone did that and there was no money being exchanged the industry would either change and stop ripping off the public or go belly up which maybe they should anyway.i guess evertime someone reads a book in school or in the library a fee should be paid. Or maybe everytime i use the dishwasher i should pay a royalty fee. Just stop the arguing and greed dont buy the media dont turn on fm radio and see how that works. One more tidbit i wont be replacing any music i have with the next “new media” either. Yea pay you all again for the media i cant use because you changed again thats not going to happen anymore, What a racket.

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By JKoch, May 30, 2007 at 10:54 am Link to this comment
(Unregistered commenter)

A new broadcasting medium is fine, but not if it mainly plays artist “hits” and skirts the royalties.  It would be wonderful if the Internet radio stations promoted, with permission, work of people without access to the big studios or networks.

YouTube and similar sites are also blighted by material “ripped” from commercial sources.  Small clips incorporated with source acknowledgment into a substantially unique or original result might comply with public use standards, but some things are flat-out copies with no acknowledgement or permission.

Discount royalty standards for small Web broadcasters might be fine, but not if the station format is a mirror of the network “hits,” which would only fuel illicit digital copying of copywrited work.  Any site that plays mainly hits and whose visits soar above a certain threshold would have to pay royalties on par with the big guys.

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By danny, May 27, 2007 at 9:15 am Link to this comment
(Unregistered commenter)

Umm, ASCAP and BMI collect performance royalties on television and radio performance of music and pay the copyright owners.  It doesn’t work out great for the small guy, but your guest is wrong.

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By tone-wreck, May 25, 2007 at 10:44 am Link to this comment
(Unregistered commenter)

Promotion is great (as an excuse).

Free radio (or almost free) so you can promote your music.

Concert that hardly pay at all ( or even cost you money through tour support) so you can promote your songs.

Get your music on a TV show for next to nothing so it will promote your music.

Put your tunes on compilations for peanuts, it will good for promotion.(I have had offers from majors in the tens of dollars!!!)LOL to their face.

Free copies to DJs so they can promoye your stuff ( they get paid a bundle though).

Free downloads actually help you promote your music too!

By the time you have done all this promotion for nothing there is no were left to go!


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By Kity, May 24, 2007 at 6:55 am Link to this comment
(Unregistered commenter)

I have wanted one of these forever! THANKS for the great work

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By doctordawg, May 24, 2007 at 2:21 am Link to this comment

Radio music is not nor has it been “free” all these years.  Radio stations sell advertising by attracting listeners by playing music, then pay the songwriters and performers through AFTRA, AFM, ASCAP, BMI, SESAC, etc.  Even restaurants, bars, sports facilities and dentist offices pay royalties to play music, rightly so, as it enhances their value to their customers.

“There isn’t any clear way of tracking what songs have been played, by which artists, and ensuring that that fee has gone to the actual artists.”

This isn’t exactly true, as can track internet plays from legitimate licensees very accurately.  BTW, SoundExchange pays directly to the musicians, bands and songwriters if they are the legitimate copyright holders, bypassing those big evil corporations.

Musicians gotta eat.  Songwriters gotta eat.  Please stop thinking of “music” as something separate from those who create it.  We love you, the listeners, but, man, we gotta eat.

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By Josh, May 23, 2007 at 10:17 pm Link to this comment
(Unregistered commenter)

I can understand protecting intellectual property, but they need to think about this.  Quashing internet radio will only serve to shoot them in the foot by eliminating a major promotional medium.  When I listen to internet radio, I hear songs that I want to own, songs that I had long since forgotten about and I buy the MP3.  Isn’t that why radio over the airwaves has had “free” music for nearly a century?  As a promotional vehicle to sell albums?  They’re taking the “batten down the hatches” approach a little far and they’re going to choke themselves in the process.

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By doctordawg, May 23, 2007 at 9:34 pm Link to this comment

Guys, guys, you’re killing me.  Why does everyone think musicians don’t mind having their stuff stolen?  Magazine writers would scream bloody murder if someone scanned and republished their stuff free on the internet.  Sure, those internet radio stations “need” cheap/free content.  Hey, I could run an unbelievably successful and affordable grocery store if only I could steal the store inventory first.  I could sell steaks for pennies and still make a profit!

What you are advocating here is the same as if I registered, just gleaned all YOUR content through a parsing script, put MY ad links on it, and enjoyed the free ride at your expense.  I’d be streaming YOUR content alongside MY adlinks without compensating you.  How fair would that be?

This would NOT be “good for the music,” as if “the music” is a self-generating entity.  This is like saying we should be able to bootleg Stephen King or Nora Roberts books for cheap or free on the internet because it would be “good for the story.”

Please, guys, you’re killing me, and thousands like me, who either make a living writing and recording the songs you love, or we give up and sell shoes.

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By namvet67, May 22, 2007 at 9:35 pm Link to this comment
(Unregistered commenter)

Big media, because it is now a part of the military-industrial complex is allowed to do what ever it pleases. And of course it pleases to make more money. Big media wants and needs audiences to sustain itself. They can influence market size, and content, in many ways once they are free to “do business” as they see fit. They will find a way to bring internet radio into their domain and rape it for all it’s worth. It’s what they do now in the United States of Everything.
Hoa binh

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