A VC« GlenLindsay Glen Ross | Main | Broadcasting Your Status »
This Is Not Right
On March 2, 2007 the Copyright Royalty Board (CRB), which oversees sound recording royalties paid by Internet radio services, increased Internet radio's royalty burden between 300 and 1200 percent and thereby jeopardized the industry’s future. I posted my thoughts on the increase at that time.
The CRB ignored the fact that Internet radio royalties were already double what satellite radio pays, and multiplied the royalties even further. The 2005 royalty rate was 7/100 of a penny per song streamed; the 2010 rate will be 19/100 of a penny per song streamed.
By what logic should a webcaster pay double or triple what satellite or terrestrial radio pays? This is nuts. I love Internet radio. I listen all the time. We've done a lot of work on monetizing streaming audio in the past six months and I believe that there's a good business in Internet Radio, but not at these rates.
But to me the fundamental issue is that our government is giving "over the air" and satellite broadcasters an unfair advantage over internet broadcasters. That is not right.
I've joined the Save Net Radio coalition and sent my congressional representative a piece of my mind. I've added their badge to my house ads on the right hand side of this blog. I'll glady do more if anyone has any good ideas. I'm pissed about this.
Comments (9) | Posted April 19, 2007 in My Music , Venture Capital and Technology
Comments
Everyone is pointing at the RIAA.
I think NAB has far more to gain from this that RIAA.
http://foneshow.blogspot.com/2007/04/internet-radio-is-in-big-trouble.html
Posted by: Erik Schwartz | Apr 19, 2007 11:59:30 AM
It's time for every musician who's never had a song on the radio to start a week long radio/satellite and get every fan of theirs on board in protest.
Posted by: Yaacov | Apr 19, 2007 12:09:58 PM
Hi Fred,
Just another example of how this industry is shooting themselves in the foot be looking for instant gratification in terms of money.
Funny thing is, when you look at these companies like Warner, (whom two institutional investors own about half of their stock) this ownership is allowing this to occur.
The free market is going to prevail at the end of this. It always does.
Posted by: Sam | Apr 19, 2007 1:17:53 PM
this is an appaling development. in what other industry would an incumbent monopoly be able to place these sorts of financial restrictions on a new player simply because the old guard can't get their heads around the fact that business models change?
I love Pandora. Have found new music and bought CDs of artists I heard there.
How does driving these services out of businss help the artists?
Posted by: OffBeatMammal | Apr 19, 2007 1:20:42 PM
Yes, the big record companies have seen their revenue drop, but the answer is to innovate your way out, not to squeeze Internet radio providers and then bring out the lawyers. It shows a total lack of vision and an old school way of thinking. How about making Internet radio free provided that the host display the band name and song name along with the stream?
Internet radio has introduced me to all the music I have bought over the last few years. If I hear something I like I'll buy it. But I'm not listening to Clear Channel. Why is this so hard for the CRB to understand?
Posted by: Mitch Rubin | Apr 19, 2007 8:03:15 PM
I signed up as well. Yet another example of copyright law being flipped on its head and used as a weapon to quash innovation rather than foster it.
Posted by: Brouhaha | Apr 20, 2007 8:12:38 AM
Follow the money, I bet you it's an eyeopener.....
Posted by: jackson | Apr 23, 2007 1:33:56 PM
Free markets do not always prevail in the cases of perceived inequities.
In this case isn't it a simple form of rent control and net radio has been determined not eligible? A form of R-NET (for radio) control. It would seem the "best way to destroy any city, just short of bombing it" an economist said a long time ago, would be just such a thing.
Interesting how the axioms never change...just the theorums...
Posted by: WMA | Apr 24, 2007 2:07:33 PM
totally off topic, but another example of how a few corporates want to spoil it for the rest of us.... a plan to 'reclassify' chocolate so they can fill it with trans fats and vegetable dairy substitues.
yuck. do something about it here http://dontmesswithourchocolate.guittard.com/whatsthisabout.asp - please;)
Posted by: OffBeatMammal | Apr 25, 2007 2:59:07 AM
Main RSS Feed of All Posts
VC and Technology Posts Only
