The beat goes on…for now

You may have noticed that May 15 July 15 (The Day the Music Died) came and went with little comment from me, which ought to be a little surprising, given this post. The truth is that I was–in an unbelievable display of naivety–waiting for some sort of concrete resolution to the standoff. Oh, how silly of me.

A quick recap for those, like myself, who’ve been asleep for three weeks:

SoundExchange (Corporate motto: “[This motto is protected by federal copyright usage restrictions, and may not be viewed except by licensees of SoundExchange, Inc. and their assigns.]”), in an unprecedented show of good sportsmanship not unlike that with which a bored housecat allows a chipmunk to limp around in dazed, broken-legged circles before eating it, agreed to temporarily stay collection of fees due under the newly-minted royalty scheme. (That is, of course, with the understanding that back dues and interest will be payable immediately upon a compromise settlement). To their–very small–credit, the position they are currently championing would at least forego decapitating the smallest of net broadcasters (non-commercial operations and/or those worth less than $1.2 million per annum) . There position is summed up nicely in this quote from spokesman Richard Addes (via

We are talking to small webcasters and representatives of public radio to see if we can reach some kind of acceptable compromise, but everybody else is going to be bound [by the new regulations].

In other words, they aren’t even bothering to pretend that this is anything other than carefully-litigated extortion. By only hammer-locking the largest of the broadcasters, they effectively admit that they’re only interested in growing high-yield crops on their money farm.

That brings us to the issue of fee caps. Commercial webcasters–Pandora, Live365, et al–understandably turned a little green at the CRB-stipulated $500 per stream policy. How many audio streams does establish in a given year? Hell, in a day? It doesn’t take an economics major to see that even a multi-million-dollar entity will bleed white at that rate. So, in their continuing generosity, the nice boys and girls over at SoundExchange agreed to cap annual fees for such large concerns at a paltry $50,000 annually. Says Executive Director John Simon:

We believe that this minimum fee proposal addresses webcasters’ concerns about the minimum fee affecting webcasters with hundreds or even thousands of stations.

This to me is reminiscent of automotive dealerships in the past raising their sticker prices astronomically and then offering seemingly unbelievable discounts. Effectively, what they’re saying is “Sure, it’s more than you wanted to pay, but it’s fifty percent off. Fifty percent! With that kind of savings, how can you afford not to buy?”

Of course we need not forget this is a good-faith compromise offer in the same sense that the guy who puts a knife to your throat in an alley and demands your wallet is offering you a perfectly reasonable choice when he says, “Your money or your life.”

But wait, it gets better.

In order for this compromise to even be considered on the part of Sound Exchange and the rest of Big Music, webcasters must commit, again in the words of Simon, to “become much more compliant in their reporting” and “work on a technologically-feasible solution [to stream-ripping].” These two points were mysteriously under-hyped in the initial “shucks, aren’t we generous” fanfare the industry raised over it’s talks with net radio outlets. The first seems quite straightforward in that it indicates a mandate for stringent, IRS-grade record-keeping and documentation. A pain in the ass, at best. At worst, a clerical nightmare. The second, however, is the blue-ribbon winner. “A solution for the prevention of stream-ripping” means one thing and one thing only: DRM. And we all know what a wonderfully painless operation that’s always been, don’t we?

The bottom line is that the recording industry has grown so complacent, so bound up in its sense of fiduciary entitlement, that they can no longer be reasoned with. To paraphrase Leo Laporte, the inimitable Tech Guy, the music industry went to their legislative and judiciary pet, the Copyright Royalty Board, and asked for the moon. And lo and behold, they got it. The CRB handed them a blank check, a permit to extort. They’ve been trying and failing to squeeze performance royalties out of over-the-air broadcasters for 80 years (not that they aren’t still trying, mind you), and they’re damned and determined to get it right the first time with internet broadcasting.

Of course, there’s still hope, some of it issuing from and unlikely quarter: Congress. The Internet Radio Equality Act is by no means out of steam. Here’s an excerpt from a statement from Sens. Wyden and Brownback, two of its champions:

While we strongly support a negotiated solution, we will not allow the minimum fee issue to be used to force an agreement that mandates DRM technology and fails to respect the established principles of fair use and consumer rights.

If great progress toward a fair solution for webcasters is not made by Congress’s return to Washington after Labor Day, then we plan to take expeditious steps toward passage of the Internet Radio Equality Act.

Please take a minute to read the rest of the statement courtesy of Eliot von Buskirk of In fact take five minutes and send your own congressional representatives a letter letting them know how you feel about this issue, whatever those feelings may be. If you don’t know who your representatives are, or how to get in touch with them, head on over to and input your ZIP code. Their database will provide you with all relevant contact information, including telephone numbers and outlines of talking points if you’re not sure how you want to approach the issue.

Of course, our best line of defense, as entertainment consumers, is to remember, as I’ve said before, that the entertainment industries–the record industry included–exists on the whim and good grace of the audience. Record sales are a privilege, not a right. Period. Therefore, I say this: Whether you be a listener or a broadcaster in any medium, on any scale, I urge you to remember that there are vast oceans of musical talent out there who haven’t yet been assimilated into the corporate entertainment complex. And for you musicians and performers in the audience, remember that the more people who can hear you, the more records you sell, regardless of what bullshit they concoct to the contrary. You’d do well to remind your labels and production houses that killing off an outlet as vast, accessible, and inexhaustible as net radio is not in your best interest, and that what’s not in your best interest is not in their best interest.

Don’t let them forget we’re listening, friends.


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