College Radio Feels The Effects Of The RIAA

The Harvard Crimson has an article about the effect of the new SoundExchange royalty rates on college radio, at Harvard and throughout the US. From the Crimson:

Internet radio’s low overhead allows for stations to broadcast on a shoestring budget and still access a worldwide audience. For some college stations that only have small transmitters or broadcast in small communities, streaming actually becomes the main source for listeners.

The newest SoundExchange royalty rates are so dangerous to internet radio because they effectively eliminate both of these advantages to streaming. Not only will royalties see a 150 percent increase over the next five years, but a $500 fee per channel will also be introduced.

If stations want to increase their listener capacity on one channel above 200 listeners, they will be forced to pay more for each accrued listening hour. Finally, since the settlement was supposed to have taken effect in 2007, stations are already in the position of having to retroactively pay the missed fines to SoundExchange within 90 days of receiving notice, which may again be during summer hours when stations are not operating at full capacity.

These prohibitive costs will force internet radio towards the current commercial model of terrestrial radio. College radio stations and other small stations will undoubtedly find the cost to be too high, forcing them to either stop streaming, increase advertisements, or negotiate directly with the RIAA for different terms, lengthening the already lengthy legal battle.

With SoundExchange holding all the cards, internet radio may quickly find itself being bullied into a model the recording lobby finds most profitable

Sad. —MEGHANN MARCO

RIAA Tacks on New Fees, Threatening College Radio [Harvard Crimson]
(Photo: cogdogblog)

Comments

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  1. aaronhoffman says:

    Feals?

  2. superlayne says:

    Not a single rock station is actually independent, anymore really…They’re owned by one big company, really.

    I think the RIAA would be happiest if we payed them every time we thought of a song.

  3. jesseraub says:

    I just recently did a comic about this for Punknews.org.

    http://farm1.static.flickr.com/186/431889511_0308e147ca.jp

    There’s the flickr version. It’s not great quality, or even funny.

  4. paco says:

    I really don’t understand what the fuck principle the RIAA is operating under–the idea that the fewer people who hear music the better? This is utterly absurd!

  5. TechnoDestructo says:

    Good. Maybe college stations will play more independent music (like they used to).

  6. To top it off, the easy way out – advertising revenue – isn’t a luxury most college radio stations have. Most of them are on non-commercial frequencies, where only brief underwriting messages are permitted. Even the most brilliant sales force will have a hard time selling underwriting on stations with such a small, diverse listenership.

  7. mconfoy says:

    I was a DJ, music director and manager of Texas A&M student radio, KANM while an undergrad. I remember that the record companies use to push albums into my arms to get them played for free knowing that we were a great source of customers. Now that they stream, they want college radio to pay for what was once free? What little advertising money was made was used for equipment. No one was paid. Someone help me understand this insanity. How does this possibly make any sense?

  8. This has got to be the most ridiculous thing I have ever heard.

    I don’t understand what the RIAA is thinking either. It almost seems like some sort of agreement between the radio stations and the RIAA to effectively eliminate competition.

  9. Triteon says:

    Folks, this may suck and may not make any sense to a majority of listeners, but the fact of the matter is this: the artists want to be paid for their work. Period. And if potential listenership is increased dramatically– via the Internet– then the payment for the work increases as well.

    Think about it this way: Jerry Seinfeld, et al. doesn’t just get a little check from his syndicator because the show is in reruns. He gets paid for every station that runs Seinfeld in syndication. And he gets a cut of the DVD sales and merchandise, ad infinitum forever. Because it was (the royal) his work. Actors want to get paid and so do musicians.

    mconfoy makes a great point about how the industry formerly operated…back in a day when there were 4 avenues for enjoying music: AM/FM radio, television (AB, MTV, etc.), live concerts and albums. Pushing music via the airwaves led to greater album sales. Greater album sales led to greater ticket sales, and ticket sales is where the artists make most of their money. The system worked for all.

    But the electronic age has given rise to more rampant copying (I’ll admit to dubbing my share of cassettes back in the day), and a drop in the number of albums sold. (I won’t mention my old-geezer mentality that says music today just isn’t as good as it used to be, and that’s why sales are dropping. Dagnabit.) So unions like the RIAA go looking for new revenue streams to accomplish two goals: lining their pockets, and lining the pockets of their artists.

  10. Buran says:

    @Triteon: Spoken like a true RIAA shill.

  11. DuncanC says:

    @Triteon: But if the RIAA charges (or sues) all these independent radio stations out of business, then who will be left to play their music? Then no one gets paid.

    These foolish tactics that protect their business in the short term, will destroy it in the long term.

  12. mac-phisto says:

    @Triteon: hmm. interesting comments. i would suggest doing a bit of research on how royalties are actually paid before making a blanket comment about artists. first, are we talking songwriters or performers? b/c songwriters are paid for radio airtime. well, they are supposed to be paid, anyway. of course, more than one artist has had problems with BMI or ASCAP.

    royalty payments are inherently flawed & even more so in this case. obviously the music industry deserves compensation from for-profit enterprises that generate revenue from playing music online. but npr & college radio stations that offer up content not-for-profit cannot be held to these same standards. many of these stations rely on government subsidies & listener donations to offset operating costs. it’s not the same as yahoo! & other billion-dollar companies.

  13. cpipe says:

    Triteon, this may suck and may not make any sense to you, but the fact of the matter is this: artists want to be paid for their work – but the organizations running the show on that front are organized extortionists, liars, and morons. Period.

    If webcasting rate fees are increased dramatically — via the oddly-extra-taxed Internet streaming rate hikes — I can guarantee you three things:

    Thing one: artists aren’t going to be seeing bigger royalty checks, because the people doing the collecting and disbursement are

    a) created by, paid for, and run by the RIAA. As I’m sure you are aware, they have a *great* record. (They say they’ve been split off since 2003, but take a look at their core management, and their prior positions. Then go read John Simson’s recent interviews where he admits the RIAA still provides SoundExchange with free legal teams.)

    b) Have already demonstrated that they ‘can’t find‘ many major artists in order to pay them.

    c) Have never, ever, published their royalty calculation and distribution numbers. They’re about as transparent as tar.

    Thing B: an entirely vital source of small- and mid- market promotion will be destroyed in the U.S.

    Thing C: Draconian recordkeeping and reporting requirements will be forced upon the webcasters, which is a whole diffn’t discussion. If you haven’t read this one, please do.

    So, in effect, you’re right: they are looking for new revenue streams to line their pockets.

    Ya know what? You sound like you’re in the industry, so I ask you this: How many artists do you know that are getting their royalty disbursements? And how big are they? And what kind of accounting trail is there to back those checks up?

  14. axiomatic says:

    “Lights out. GORILLA RADIO!!! Turn that $hit up!” – Rage Against the Machine.

    Do it. Don’t pay. Screw the RIAA.