Local Rhythms – Internet Radio Update

Even though Congress was mostly busy saving the economy last week, they did find time to pass the Webcaster Settlement Act of 2008.

President Bush is expected to sign the bill, which grants a stay of execution to the burgeoning Internet radio business.

Readers of this column know that, a little over a year ago, the government-run Copyright Royalty Board made a decision that threatened to put most webcasters out of business.  The influential Broadcast Law Blog called it “disconnected from the realities of Internet radio.”

The ruling left no wiggle room, and after months of battling for a fairer deal, companies like Pandora were ready to pull the plug.

With the patient so close to flatlining, Congress finally acted.

“There may now be a light at the end of the tunnel in the fight over Internet radio royalties,”
Representative Jay Inslee, a Washington Democrat, said last Sunday.

The new law didn’t set reasonable rates; it simply makes it easier for the two sides – copyright holders and webcasters – to hammer out legally binding agreements of their own.

Whether things get better is, no pun intended, still up in the air.

Writing for Broadcast Law Blog, attorney David Oxenford said the WSA “makes it easy for settlements to go into effect – now we need to see if the hard part – actually entering into those settlements – will occur.”

Companies like Pandora and Last.fm have until next February 15 to sit down with Sound Exchange. Only a cockeyed optimist would count on smooth sailing when that happens.  The history isn’t good.

Sound Exchange is the RIAA-created performance rights organization in charge of collecting royalties. Over the course of this debate, they’ve dismissed the promotional value of webcasting and unblinkingly demanded payments 7 times those of terrestrial radio.  They seem hell bent on eating their seed corn.

According to Pandora CEO Tim Westergren, 70 percent of people who listen to his service on the hugely popular iPhones are doing so for the first time.

“It’s changed the perception that people can listen to music on the phone,” Westergren said in a conference call Monday.

Greed and ignorance could derail this progress.

These missed opportunities hurt everyone.   The new law only buys time until February.  Two much more substantial (and very different) Congressional bills are currently stalled, as everyone waits for the election on November 4.

But at least it’s a step in the right direction.

What’s ahead in entertainment?

Thursday: Chimu Inka, Gusanoz – These Peruvian cultural ambassadors have performed all over the region recently.  They have just a few more shows before heading home, including a stop at the Warner Fall Festival this weekend, and Woodstock High School on Monday.  Their name comes from performer (and Chimu Inka Musical Director) Guillermo Seminario’s pre-Incan ancestors, who were conquered by the Incas.  Seems appropriate for Columbus Day weekend.

Friday:  Moondance, Downtown Windsor – “A whimsical celebration of the moon and its magic” featuring fire-eaters, jugglers, balloon artists and more, celebrates its ninth year.  Of course, there’s music, with Juke Joynt and Vermont bluesman Chris Kleeman.  The forecast at press time was for a perfect autumn night.  Since much of this event happens outdoors, that’s a very good thing.  Circus Smirkus and a dance troupe will also add to the fun.

Saturday: Springfield Apple Festival, Riverside Middle School – This two-day even marks fall’s arrival in my mind.  I tend to welcome out of town guests a lot this time of year (who doesn’t?), and they’re always asking about apple picking and apple cider.  If I take them to this annual Springfield festival, now in its’ 26th year, they’re sure to get their fill.  Great music too, including singer-songwriter Josh “Cherries Jubilee” Maiocco and Alli Lubin.

Sunday: Lindsey Buckingham, Lebanon Opera House – The brains behind Fleetwod Mac has a fantastic new solo album, “Gift of Screws,” and his live shows are stellar.  Never content to stay in one artistic place for long, Buckingham can be challenging.  But this time around, there’s plenty of Mac elements at play on the new disc, which should translate well to the stage.  It’s quite a “get” for Lebanon, really.

Monday: Bryan Greenberg, Iron Horse – The star of the recently cancelled “October Road” television show hits the road with his guitar and a smile.  I have to say, his music sounds pretty good in a John Mayer kind of way.  I wasn’t crazy about the show.  Greenberg just finished making a movie in Boston, “Bride Wars,” with Kate Hudson and Anne Hathaway.

Wednesday: Fred Haas & Sabrina Brown, Elixir – A dinner show and jam session with the piano playing, sax blowing Haas and his wife, with an early (6:30) start.  Each week a different artist’s oeuvre is explored – could be Ellington, Porter, Holliday, who knows?  I can tell you that the New York City vibe is spot-on, and their French Fries (secret ingredient: sugar) are my all-time favorite.

Internet Radio Stays Alive – For Now

netradio.jpgSunday, July 15 was destined to be the “day the music dies,” but as the sun rose Monday morning, Live365.com, Pandora, MVY Radio and other webcasters were still streaming.  On Thursday, the nascent Internet broadcasting industry emerged alive from a closed-door meeting convened by Massachusetts Representative Ed Markey, yet still facing an uncertain future.

At the meeting, Sound Exchange the industry group responsible for collecting royalty payments, verbally promised to refrain from enforcing revised rates ordered by the U.S. Government’s Copyright Royalty Board last April.

Additionally, Sound Exchange offered to cap fees for smaller webcasters at $50,000 per year – the original judgment mandated a $500 per channel fee.  Many web stations allow their listeners to create hundreds, often thousands, of personalized music streams.  They faced multi-billion dollar royalty payments. Large providers like AOL, Yahoo! and Rhapsody were expected to start paying immediately; the fees are retroactive to January 1, 2006.
A motion to delay implementation of the new rates was denied by an appeals court Thursday. This left webcasters looking to mounting Congressional pressure to address the inequities of the fee structure, which most webcasters claimed would force them out of business.  The July 15 deadline had been extended from May 15, and on Thursday a bill to move it out another 60 days was offered in the House.

Legislative responses to the rate increases had been filed soon after the CRB decision. The Internet Radio Equality Act, introduced April 26, has attracted 134 co-sponsors, including Carol Shea-Porter.  The New Hampshire representative was an early supporter of the legislation, saying in a statement that the hike “would have a devastating effect on millions of listeners.”
A similar law was also under consideration in the Senate, but on Tuesday, Judiciary Committee Chairman Patrick Leahy expressed hope that cooler heads would prevail.
“He’s been encouraging all the parties to calmly work towards private settlements on the rates, and there has been progress,” said Leahy spokesman David Carle.  “The parties are still talking, and we’ve heard from webcasters that there’s optimism about the final deal on royalties being reached.”
Jay Inslee, the Washington representative who submitted the House bill, agreed. An Inslee spokesperson told Congressional Quarterly Wednesday that “for Jay, the number one thing is reaching an agreeable solution to both sides, where artists feel like they’re being compensated fairly and webcasters can have a sustainable economic model.”

Even though the world of Internet radio breathed a sigh of relief Friday, all was not sanguine.   Sound Exchange’s promise was too vague, said AccuRadio’s Kurt Hanson, and wasn’t even offered in writing.  Referring to Internet advocacy group SaveNetRadio.org’s “countdown clock” to the rate hike, Hanson cautioned, “during this period of negotiations, I would probably set it at ‘2 days and holding.’”

A press release issued by Sound Exchange announcing their decision also raised concerns.  The fee cap, said the statement, was conditional upon stations working “to stop users from engaging in “streamripping” – turning Internet radio performances into a digital music library.”

The recording industry has long fought illegal file trading. But streamripping, the practice of recording songs from an Internet station, is similar in practice to a VCR.  “All you’re doing is time-shifting,” wrote Salon blogger Farhad Manjo – something that’s perfectly legal.  But he worried that web stations fighting for their lives would agree to industry demands for technical steps, such as lowering bit rates and interrupting songs mid-track, to make duplication more difficult.

“You have to wonder if the recording industry — now that it’s got webcasters locked in negotiations for their future — will have any trouble imposing such reduced-quality streams,” wrote Manjo.

Local Rhythms – A Day Without Net Radio

radio1.jpgSince I wrote about the threat to Internet radio a few weeks ago, things have gotten worse for music streamers like Last.fm and Pandora. The Copyright Review Board (CRB), which sets the cost paid to content owners, refused to hear an appeal to a rate increase that stands to shut down a lot of music streams.

Net stations have turned their attentions to Congress, which is showing signs of action, but D-Day is July 15. That’s when retroactive hikes, amounting to more that triple the current rates, kick in. It should be noted that these are fees paid ONLY by online radio operators.

When that happens, many web sites will have but one option – to shut down.

This is dire, not only for net radio, but for artists who’ve given up on the mainsteam as a way to build exposure. That’s the reason for next Tuesday’s “Internet Radio Day of Silence.”

Many prominent webcasters have signed up, though participation from big terrestrial players like Clear Channel is not yet forthcoming. This may change, as Sound Exchange, the music industry agency that successfully won the CRB case, is making noises about trying to raise the “performance rates” paid by terrestrial and satellite operators.

I suppose for some readers, this is all a bit esoteric, but then again so were compact discs in 1984. But if the leading edge of technology is destroyed before it has a chance to become mainstream, everybody loses.

For example, what if the movie studios had won their lawsuit against Sony’s VCR and made it illegal to record movies from your television?

So much stands to be destroyed in the name of protecting an industry that has proven time and again to be its own worst enemy. In a few days, you’ll have a chance to witness where this short-sightedness leads.

Cell phone networks are becoming fast enough to support Internet radio streams, yet this ruling, if it stands, means few if any will ever get started. Those that do will probably play it safe to reach the lowest common denominator.

I’ve already got too many of those in my car.

Great music comes from bending rules and breaking barriers. The Internet is the only truly nurturing environment for the few cultural revolutionaries still in our midst.

Shutting it down doesn’t make sense.

So when Tuesday comes, listen to the silence and ponder what it means. In the meantime, check out these live music choices:

Thursday: Tuck Stocking, Gusanoz – Cinco de Mayo is to this place what St. Patrick’s Day is to Salt Hill, an excuse to celebrate all week long. Tonight, one of the best young guitarists in the area steps up. Tuck provided the secret sauce on Syd’s first record, and his work on the Conniption Fits’ latest helped to turn their new album into a regional hit.

Friday: Sol Y Canto, Lebanon Opera House – This Latin-flavored combo will be busy today, performing two educational shows early Friday morning, and playing with the Upper Valley Music Center’s Children and Youth Chorus at 7 PM. Buoyed by Rosi and Brian Amador, the band’s name means “Sun and Song.” With Rosi’s redolent singing and Brian’s expressive Spanish guitar stylings, it’s a sound that’s as hot as good salsa.

Saturday: Joey Leone’s Chop Shop, Claremont Opera House – Will the plaster stay on the walls? Can the old opera house stand the shock of the rock? We’ll see when Leone takes the stage. Over the course of his two-hour set, Joey channels everyone from Zeppelin to ZZ Top. Lonnie Youngblood calls him the best guitarist he’s played with since Hendrix, and fans pack the ski resorts whenever he plays.

Sunday: Ronnie Milsap, Paramount (Rutland) – He established his bonafides with hits like “There’s No Gettin’ Over Me”and “I Wouldn’t Have Missed It For The World.” I was reminded of how talented Milsap is when Joan Osborne recorded his Grammy-winning hit, “Please Don’t Tell Me How the Story Ends” on her most recent album. This, my friends, is the Nashville Sound. If you love it, Ronnie’s your man.

Tuesday: Wailin’ Jennys, Iron Horse – As Pete Townshend said, all the best heroes have Chinese Eyes, and all the best Americana comes from Canada. Rough-hewn and utterly charming, this trio got a nice nudge from regular appearances on “A Prairie Home Companion.” Their music is a mix of Dixie Chicks harmonies, rustic overtones and some seriously sweet picking.

Wednesday: Terry Diers, Canoe Club – Like a lot of area musicians, Diers wears a few hats. He plays with the rock bandk Skinxs and does bluegrass with Celtic hammered dulcimer player Samantha Moffatt. Tonight, he plays solo on several instruments – 6 & 12-string guitar, mandolin, and even a little piano.

In RIAA Protest, Chicago’s 9 FM Bans CD Giveaways

In a post-millennial update to the Loop’s legendary 1979 “Disco Sucks” record-smashing party, NewsWeb Radio Company’s 9 FM in Chicago has banned CD giveaways and invited any and all past winners to return their discs; they’ll get a station T-shirt for their efforts. Via FMQB:

“When I read that the RIAA and SoundExchange needed money so badly that they were going to price gouge independent Web streamers and radio stations who stream online, I knew we had to do our part,” said Matt DuBiel, Director of Programming for 9 FM. “In the face of the RIAA’s struggles, it just doesn’t seem fair for us to be giving away CDs (for free) to music fans fully capable of paying for the music themselves. We’re inviting everyone who has won a CD from 9 FM or any other radio station in Chicago this year, to return it to us and we’ll exchange it for a 9 FM t-shirt and give the CDs back to the RIAA. Radio stations need to be able to stream online affordably.”

One piece of advice to fans sending back their discs – be sure to rip them to MP3 first!

Local Rhythms – Killing Internet Radio

head-in-sand.jpgLast fall, I wrote about web sites like Last.fm, Pandora and Mercora, that were shaking up the music world by offering thousands of niche channels and creating social networks for fans. Suddenly, it’s possible to discover artists who are laboring outside of the mainstream.

That could end soon. In early March, the Copyright Review Board, a government entity that’s almost completely controlled by the recording industry, made a decision that is, says Congressman Ed Markey, “a body blow to many nascent Internet broadcasters.”

The CRB ruling, retroactive to last year, triples the amount of money most web stations will be required to pay to record companies to use their products. This fee will not, it should be noted, go to the artists who made the music – that’s a separate payment. Worse, it exclusively targets Internet radio stations.

Regular radio outlets aren’t even required to pay the royalty, created 12 years ago. In 1995, a compliant Congress passed the Digital Millennium Copyright Act, a law that’s spawned nothing but greed and stupidity in its wake.

Since then, the best way into the business is Berkeley Law School, not the Berklee School of Music. Litigators have replaced lead guitarists, and record executives have started to think they’re rock stars.

All the while, the industry has tried to crush any and all technologies that might improve the fate of music in a world of declining CD sales.

It’s not hyperbole to say that if the ruling stands, most legitimate web stations will go out of business. The money CRB is demanding represents two to three times their annual gross revenue. Pirates don’t pay royalties, so they won’t miss a step. But an excellent chance to create a legal oasis for digital music will be delayed, if not destroyed.

When will these guys learn to get out their own way? In rural New England there’s a handful of music stations on terrestrial radio, but many are also online. Two of my favorites, the Point and WEQX-FM, are fuzzy in the car but come in loud and clear on the Net. That would end with the CRB decision.

These are the babies about to be thrown out with this ruling’s bathwater. Several web sites are following this developing story – the best is the Radio and Internet Newsletter.

Write your representative if you believe, like I do, that it’s time to stop this insanity. In the meantime, here are my live music picks for the coming weekend:

Thursday: Spring Savories, Claremont Opera House – A little music and lot of good food, as the State Liquor Commission and several area restaurants get together to show off their wares. Bistro Nouveau, Hullabaloo, Sophie & Zeke’s, Teal Lantern, North Country Smokehouse and the Java Cup, plus six wine vendors will participate in the event. John Lovejoy’s always a pleasure to listen to, especially when he’s tickling the ivories of the Opera House’s vintage piano.

Friday: Kid Pinky & His Restless Knights, La Dolce Vita – New London’s newest dining spot welcomes this fun-loving blues band. Bow-based Kid Pinky plays a smooth harmonica and is an ace piano player. This early evening (6:30 start) set should be long on sultry songs like Jimmy Reed’s “Hush Hush” the smoking original “Watchin’ You” – both of which can also be heard on “Blues That’ll Knock You Out,” the band’s latest CD.

Saturday: All Ages Metal Show, Hot Spot – This is a new nightclub located at the Everyday Inn in Rockingham, located just a little south of Exit 6 on Route 5. Saturday’s afternoon show features Jennings, Otumshank, Chapter 50, …And Then There Were Three and the Jonah Veil. The power trio Stonewall plays their own separately ticketed show at 9. It’s a welcome addition to the southern Vermont scene.

Sunday: Shawnn Monteiro, Center at Eastman – Jazz on a Sunday Afternoon continues with this fine vocalist, backed the JOSA Ensemble and bandleader Bill Wightman. Monteiro draws comparisons to Carmen McRae and Sarah Vaughn. Her set includes “Great American Songbook” standards from Cole Porter, George Gershwin and Duke Ellington.

Monday: Live Free Or Die, Claremont Cinema – Not a musical event, but after a seemingly endless wait, the indie film about bumbling criminals shot two years ago in Claremont has finally found a distributor. It gets its local premiere Monday, and opens to general release at several theatres on Friday. There’s an after-party, appropriately enough, at Hullabaloo.

Tuesday: Carbon Leaf, Iron Horse – After gaining exposure opening for Dave Matthews, John Mayer and Counting Crows, this rootsy band went into the studio last year and made “Love, Loss, Hope, Repeat.” It’s a record with the rootsy feel of 2003’s “Indian Summer,” but with more sheen, polish and punch. It has lots of layered harmonies, percussive spice and muscular grooves.

Internet Radio/Copyright Royalty Board Update

edison at phonographVia RAIN, still the best source for information on the Copyright Royalty Board’s ongoing effort to kill Internet radio, comes word that the brains behind the CRB operation is, well, dumb. The Washington Post quotes CRB’s chairman, “Scarecrow” John Simson:

‘The attitude that really has to change is the idea that the people playing this music on the Web are somehow doing artists a favor,’ Simson says. Artists want their music to be heard, of course,… but Simson rejects the popular notion that the only thing small webcasters owe artists is the exposure they get from having their work streamed over the Internet…

It’s called promotion, John. Passionate music listeners, making little or no money, spread the word to others. It sells, music, exposes unknown bands, and its exponential growth should be cheered. Here’s how webcaster Adrian Koren described it to the New York Times:

“I run this as a hobby,” Koren says. “I get virtually no income from this — just some small fees from my share of CDs sold through links on the site, and that just helps pay for a few CDs. Copyright law should encourage innovation. If it’s having the opposite effect, something’s wrong.”

What’s really puzzling to me is that hardly anyone is pointing out that for indie bands, the Net represents a way around the old paradigm, a world that’s forced good bands to break their records through iPod commercials and episodes of “Heroes.” That, apparently, is the way Scarecrow thinks the world should work:

Is 10,000 stations the right number?’ asks Simson of SoundExchange, which sought the higher royalties. ‘Does having so many Web stations disperse the market so much that it hurts the artist? What’s the right number of stations?… Are artists better off having hundreds of listeners on lots of little stations, or thousands of listeners on larger stations?’

Yeah, the “thousands of listeners on larger stations” is working SO WELL to sell CDs, isn’t it? A New York Times article points out that the CRB decision will sit fine with dinosaurs, but independent bands will inevitably suffer:

“Internet radio operators also say it would not be in the interest of labels to stifle a business that is paying them fees to use their music, especially at a time of declining CD sales. ‘That’s counterproductive to the copyright holders,’ said Terry McBride, chief executive of the Nettwerk Music Group, a label and artist-management company, adding that the ruling could be bad for performers whose music would not be played on conventional radio.”

Nice to hear McBride, a real maverick in the business. But the industry isn’t interested in up and coming bands. RIAA has always been a dinosaur protection racket, for both musicians and executives (mostly for the latter).

The CRB is just one more political face of the enemy – of music fans, indie bands and pretty much anyone who isn’t clinging to the old order.

RIAA’s Internet Radio Double Standard

head-in-sand.jpgRadio Paradise, one of the many non-profit net radio stations due to die as a result of the Copyright Review Board’s recent misguided ruling on performance royalty payments, has started a blog to draw attention to the problems they and other netcasters face. RP proprietor Bill Goldsmith kicks Save Our Internet Radio off with a hard-hitting essay that highlights a fact which may be unfamiliar to many, that net radio stations are being forced to pay a fee that terrestrial broadcasters don’t:

Yes, both FM stations and Internet stations pay royalties to songwriters and/or music publishers. But the royalties in question are owed to the owners of performance copyrights, which means, in most cases, record companies – and to them, FM stations pay nothing at all.

How is it possible for such a massive disparity to exist? For the answer to that we need to go back to the 1990s, when music industry lobbyists persuaded Congress to include wording in two pieces of legislation (the Digital Performance Right in Sound Recordings Act of 1995 and the Digital Millenium Copyright Act of 1998) that drew a sharp division between analog and digital broadcasts. Their reasoning was that a digital radio transmission was not a radio broadcast at all, but a sequence of perfect digital copies of music performances provided to the user, who could then copy them rather than paying to own a CD.

Congress, bulldozed by the same crew that extended copyrights to 75 years, dutifully did the industry’s bidding, IN SPITE OF THE FACT THAT THE LAW HELPED NO ONE, NOT EVEN THE PEOPLE LOBBYING FOR IT.

Goldsmith spells out the history (familiar, it seems, to everyone but the RIAA Luddites):

Crippling an exciting, groundbreaking industry like Internet radio is certainly not in the best interests of the public, nor that of musical artists, and not even – if history is any judge – of the music industry itself. Just as they were unable to see how the advent of home music taping actually spurred the sale of LPs and CDs, they are unable to tell exactly what impact Internet radio and other forms of digital media will have on the future of their industry – and to behave as if they do know, and for Congress to go along with them, is a grave error, and public disservice, that needs to be recognized and corrected.

So, if we are building a business – even a non-commercial business like Radio Paradise – by the use of copyrighted material, isn’t it fair that we pay for its use? Perhaps it is. But the fact remains that what we are doing does not differ in any substantive way from what a company like Clear Channel is doing, and to move forward under the fiction that such a distinction exists is neither fair nor rational.

Of course, Clear Channel lives in the pocket of politicians, nonprofits like Radio Paradise don’t.

Internet Radio, R.I.P.

shotinfoot1.jpgThe music industry held the gun while the Copyright Royalty Board pulled the trigger today, as a decision to effectively triple the rate paid by Internet radio stations for retransmission of recorded works sounded the death knell for a budding business model. Via RAIN:

The Copyright Royalty Board (CRB) has announced its decision on Internet radio royalty rates, rejecting all of the arguments made by Webcasters and instead adopting the “per play” rate proposal put forth by SoundExchange.

RAIN has learned the rates that the Board has decided on, effective retroactively through the beginning of 2006. They are as follows:

2006 – $.0008 per play
2007 – $.0011 per play
2008 – $.0014 per play
2009 – $.0018 per play
2010 – $.0019 per play

RAIN ANALYSIS: In 2006, a well-run Internet radio station might have been able to sell two radio spots an hour at a $3 net CPM (cost-per-thousand), which would add up to .6 cents per listener-hour. Even adding in ancillary revenues from occasional video gateway ads, banner ads on the website, and so forth, total revenues per listener-hour would only be in the 1.0 to 1.2 cents per listener-hour range.

That math suggests that the royalty rate decision — for the performance alone, not even including composers’ royalties! — is in the in the ballpark of 100% or more of total revenues. (KH)

The industry’s rationale, which was adopted completely by the CRB, was as follows (via broadcastlawblog):

Essentially, SoundExchange argued that Internet Radio confers little promotional benefit to most performers, and that there was a large risk of “stream ripping” which would result in lessened sales of CDs and legal downloads. Moreover, the Recording Industry argued that the economics of webcasting are improving and that this higher royalty should be able to be paid by an “efficient” webcaster. In their proposal, no distinction is made between large or small webcasters, or between commercial and noncommercial entities.

It’s times like these that reveal the industry to be a passel of Luddites who can’t accept a future they don’t write word for word. If the record biz really believes that the risk of recording outweighs the promotional value of of Internet broadcasts (which can find listeners rather than the other way around), they deserve to die. Good riddance.