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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.
Square, Site wide
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.
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.
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.
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 ...
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.
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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