Radio News You Can't Use

Webcasting Royalty "Deals"
A few major agreements concerning webcasting royalties were inked over the past few weeks, locking large and small commercial webcasters into (sort of) new SoundExchange-sanctioned rate schemes.

Large commercial webcasters convinced SoundExchange to cap the maximum amount they could collect from per-channel fees. Companies like Pandora and Live365 would have been financially devastated if forced to pay $500 apiece for each of their thousands of separate webstreams. Now, instead of owing millions of dollars in baseline fees, larger webcasters will pay a maximum of $50,000. The situation is far from rosy, however. Large webcasters still do not get a break on the newly increased per-song-per-listener royalties, which must be paid on top of per-channel fees. These webcasters have also agreed to comply with SoundExchange's demanding reporting requirements, and will present the collection agency with 24-7-365 song information for each stream they host. Although SoundExchange has pressed the importance of these reporting requirements, they have not provided a realistic and easy method for webcasters to do so.

Small commercial webcasters were also dealt very limited relief from the new webcasting rates that went into effect on July 15. Webcasters who meet certain revenue limits (less than $1.25 million annually) will be allowed to pay royalties based on a percentage of revenue instead of exorbitant per-song-per-listener rates. This "deal," however, is only good for music that is owned by SoundExchange members. Small webcasters still must pay the higher per-song-per-listener fees for playing music by non-SoundExchange members, and the whole deal is null and void if their listenership exceeds certain limits set by SoundExchange. Doesn't sound like much of a compromise to me, but unfortunately, this may be all that small commercial webcasters are offered. Because SoundExchange has been so public about their "offers" and "good faith negotiations," Congress has all but abandoned the Internet Radio Equality Act.

No news on the continuing negotiations for non-commercial webcasting rates: as it stands, non-commercial webcasters like WFMU can pay a lower royalty fee, but must keep listening numbers below a SoundExchange-determined threshold. We hope that the negotiating parties agree to eliminate these listening limits for all non-commercial educational webcasters.

Radio Headline Roundup
- The FCC published a quadrennial review of broadcast ownership rules (PDF)
- Another FCC-hosted media ownership hearing is scheduled for 9/20 in Chicago
- FCC Chairman Martin continues his quest for a la carte cable TV (PDF)
- Public TV stations across the country are debating whether or not to air the unedited version of Ken Burns' WWII documentary, "The War," later this month, fearing indecency fines from the FCC. Last year a public station was fined for airing profanities contained in a blues documentary, leaving broadcasters wary of crossing that elusive line. 
- WAMU in Washington, DC drops weekend bluegrass music programming in favor of a talk/news format
- The new iPod is rumored to support streaming radio and wi-fi... we shall see. UPDATE: Ok, so now it's official, the new iPod does NOT support streaming radio, but does have wi-fi. Apple is probably worried that offering more options for streaming music will take away business from the iTunes store. I'm fairly certain that one of their competitors will force the internet radio issue in the near future.

Comments

[Rufus]

Wait wait wait. The way I'm reading this, you have to pay the per-song-per-listener fee if you play stuff from people that SoundExchange doesn't represent? And you have to pay those fees to SoundExchange?

[Liz B.]

Yep, you've got it, Rufus. SoundExchange runs the webcasting royalty market with little to no oversight. They are charged by language in the DMCA to distribute webcasting royalties to all artists, regardless of whether they are registered members or not. We've previously pointed out their inability to locate thousands of artists: check out their unpaid artist list.

SoundExchange represents about 20,000 artists, and on behalf of those artists, it will collect a portion of a small webcaster's annual revenue. For the zillions of other artists that a small webcaster might play, SoundExchange will collect per-song-per-listener fees and (supposedly) distribute the money to these non-SoundExchange members accordingly.

I have no idea how this crazy royalty split-rate will be calculated for small commercial webcasters, and I hope for their sake that the burden of this dirty work ends up in the hands of SoundExchange (perhaps they will realize the impossibility of this scheme).

[Rufus]

Well that's retarded. I remember talk of the list of people they couldn't find but I guess I had never put the two together. The DMCA never fails to amaze me in its complete backasswardness.

The way I see it, SoundExchange opens itself up to tremendously damaging class-action suits with this scheme. But I'm willing to bet they're indemnified from those by the DMCA too.