RIAA Driving Broadcasters Mad (May 31, 2007)

With CD sales on the decline in the past ten years, thanks to downloading of the songs for free off of the Internet, as well as the commercial terrestrial broadcasters playing far less new music than they ever did back in the 60s when FM radio was trying to get established, the RIAA is finding ways to come up with dirty schemes to get more money delivered to the big record labels' fat CEOs and ticking off most everybody in the process.

President Bush should sign legislation to outlaw the RIAA forever and bomb the organization in five minutes like the way the late President Reagan joked about outlawing Russia forever.

In the past several months, many Internet websites have been following up on the biggest storyline of the year in the business of radio, more interesting than anything thought by the writers on any TV serial.

It's not just the Internet-only broadcasters and the terrestrial radio stations that stream on the Internet that's affected, it even affects the terrestrial radio stations that don't broadcast on the Intenet as well.

Back in the golden days of the Internet, circa 1997, when I first got my then-new Sony VAIO 200MHz computer with MMX, 32MB of memory, a 2GB hard drive, a CD-ROM reader, and a blazing fast 33.6kbps modem, there wasn't anything that kept the pioneering radio stations such as KPIG, WMVP, KY102, and The Loop from streaming on the Internet on the then-new technology called radio station streaming. The days of putting up with constant dropouts and high compression didn't keep me from enjoying programming that wasn't being heard on any station in the San Diego or Los Angeles outlands.

Then some little law passed that began to derail the progress that Internet radio is trying to make into my cultural lifestyle. It was called the DMCA of 1998, allowing the then-obscure taliban called the RIAA to set and collect royalities from copyrighted music being streamed on the Internet.

Little by little, more stations came on the Internet, but some smaller radio stations stayed off of the Internet because the streaming expenses on top of the royalties didn't add up to making a profit. The RIAA already hampered some of the choices that I could have made as far as listening to distant radio stations on the Internet, and they could have continued to stream if it weren't for the high cost of paying the royalties to the RIAA.

With annual royalty bills of anywhere from $500 to $100,000 looming to the terrestrial broadcasters that stream as well as online-only streamers depending on their size, whatever that means, the RIAA sees nothing but more green for the record companies and their labels to take the place of the royalites lost due to fewer CDs being sold in fewer record outlets (Tower, the Wherehouse, and the like are vanishing like crazy.)

If the streamers balk and pull their streams off of the Internet, they would stand to lose their listener base to other forms of competetion: video games, iPods, satellite radio, mp3 players, paid download services, pirate streaming and download operations, as well as losing a viable part of doing business on the Internet.

If the local stations pull their streams, they will exist as local entities like they had before Internet radio was invented in 1996, but they will lose the extra coverage without streaming their limited signals to people who can't get their old-fashioned signals. They sure are not going to be able to afford tens or hundeds of thousands of dollars in new royalty bills.

What's not fair about the royalty issue is that the RIAA treats the streamers and the terrestrials, as well as the combo terrestrial/streamers, all differently. Traditional radio stations currently pay the song royalties to the songwriters only, but not to the record companies. Under current law, terrestrial radio stations are exempt from paying royalties to record companies. If you're streaming, whether online-only or with a broadcasting stick, you're hit with royalties for the performers and song owners.

The RIAA demands that the online royalties would go up incrementally from the current $0.0008 rate per song per stream to $0.0019 per song per stream. The rates would go up retroactively from the year 2006, which is not fair to the streamers because that's in the form of stealing from the businesses that are doing nothing but making the unknown singers into well-known Internet icons.

Now in a twist, the RIAA wants all broadcasting radio stations on the traditional terrestrial level to pay more royalties, this time, to a new outlet called the record companies, for copyrighted songs being used over the airwaves. The RIAA supposedly represents that singers and the record companies. What doesn't make sense is that radio had made the mediocre pop artists and their associated record companies and labels millions of dollars in terms of CD and download sales thanks to exposure. How else could have I known how much the music of Panic at the Disco and Celine Dion sucks?

SoundExchange is appealling to the artists represented by the major labels to tell their fans to tell their Congressmen to defeat the bills that would not allow the RIAA to raise the royalty rates for the broadcasters to pay. That's a load of pigeon pellets! The artists should instead sue the RIAA and its arm SoundExchange for back royalties that they're entitled to! It would be nice to see Alyssa Milano get royalties due from her record label when she was once putting out pop songs in the late 80s. Maybe she still has enough "Charmed" magic powers to turn the heads of the RIAA into WB Michigan J. Frogs!

Comedy and dementia music, for example, suffers from limited terrestrial exposure. Such music never gets played on the terrestrial radio anymore, and without exposure to new dementia music, it doesn't seem though that this genre exists in the minds of the people. The Internet is the only way for San Diegans to get their fix of demented music for new and classic funny songs.

Soundexchange, an arm of the RIAA, is trying to use propaganda to compare the streaming services with Clear Channel, already in the minds of the people as an axis of evil. Soundexchange writes a "press release" piece that Clear Channel wants to "avoid their reponsibilites to performers." To the contrary, Clear Channel isn't the villian in this case, instead, it would be a victim of the crushing royalty rates like all of the broadcasters that stream on the Internet and might pull their signals off altogther, or run royalty-free talk shows on the stream all day long.

That will screw the music performers, songwriters, and record companies well if the radio stations pull their streams so that their royalty responsibilities would be a big fat check of $0.00 to the RIAA!

Both houses of Congress had introduced competeting legislation bills to stop the RIAA's outrageous demands but there is a fear that there won't be a compromising bill in time for President Bush to sign it into law by July 15 when the retroactive royalty rates kick in.

If the royalty rates go up, expect live365 and all of the online radio stations to go into the great Internet website in the sky populated by the likes of many early website startups. Expect the terrestrial broadcasters to turn off the streams and program all talk and sports radio instead of playing music. Clear Channel and CBS Radio could tell the RIAA to go screw themselves and program royalty-free local and Internet-only bands on their radio formats, and make them into stars in their own right. On the other hand, it might be a good idea if that happens so we won't have to put up with boring music formats on terrestrial radio as it is today overplaying the same copyrighted crap from decades ago over and over and over again.

Which in turn could spell doom for the iPod industry. If all this new music is being played all the time on the local stations, nobody would care to own an iPod anymore. Apple should get involved into the fray and get Congress to stop the RIAA!

Related Stories: The Wires (May 31, 2007)

Indystar: A battle over how much record labels and artists should get paid in royalties is threatening to spill over into the broadcast radio industry, affecting companies such as Indianapolis-based Emmis Communications Corp. "The last thing that radio companies can afford in a stagnant revenue environment is to pay millions of dollars in fees," said Rick Cummings, president of Emmis Radio (read more - Erika D. Smith-Indy Star).

DiMA, NPR Ask For Stay Of Webcast Royalties Hike. The Digital Media Association, National Public Radio and several small webcasters will file a request tomorrow (May 31) with the U.S. Court of Appeals for the D.C. Circuit asking the court to suspend the July 15 effective date for the increased webcast royalties set recently by the Copyright Royalty Board. DiMA and the others want the increase delayed until after the court has heard the webcast industry's appeals of the CRB decision.

An emergency stay filed today in the U.S. Court of Appeals for the DC Circuit could delay the looming "D-Day" for Internet radio. The motion, filed by the Digital Media Association (DiMA) in conjunction with National Public Radio (NPR) and the Small Commercial Webcasters group, formally requests that the court delay the implementation of the recording royalty rate increase imposed by the Copyright Royalty Board (CRB). Legislation that would repeal the rate increase is pending in the Senate and the House, but may not be brought to a vote in either chamber before July 15, the day the first payments for the newly increased rates for webcasters are due.

"July 15, D-Day for Internet radio, is fast approaching," Savenetradio.org spokesman Jake Ward said, "and we are hopeful that today's motion for an emergency stay will afford the Internet radio industry crucial time to rehear this case. We have every confidence that Congress will continue to give the Internet Radio Equality Act the attention it deserves with the urgency it requires, as evidenced by the over 100 cosponsors who have signed on H.R. 2060 since its April 26 introduction. Savenetradio.org and the millions of webcasters, artists and listeners we represent urge the court to give this motion full consideration."

Randy Dotinga: Cents-less radio battle continues. What is $0.0019 cents worth? Not much. That's nineteen one-thousandths of a cent, not enough to give someone a penny for his thoughts. But imagine you're the owner of a radio station that broadcasts online. You may soon have to multiply that tiny number by the number of songs you play and the listeners who tune in each year. You could end up with a new annual bill of perhaps $500, or $10,000 or $100,000, which will land in the bank accounts of singers and record companies. Also: Randy Dotinga is worn out from being Lindsay Lohan's designated driver. E-mail him at NCTimesRadio@aol.com.

SD City Beat: Royalties and radio: Death to the Recording Industry Association of America. Have you heard about the latest bull@#$! gouge attempt by the RIAA (Recording Industry Association of America)? Now that the organization has successfully devastated the Internet radio community, it's targeting terrestrial radio for an ever bigger chunk of a pie that the RIAA doesn't deserve. The RIAA is doing this, of course, because the recording industry as we know it is dying. The digital age has been brutal to it, and what we are now witnessing are the death throes of the great beast as it flaps its tendrils wildly, trying to grab on to anything it can to keep from going under. In other words, it's not dying with dignity. Here's the back-story: Under current law, terrestrial radio stations are exempt from paying royalties to record companies because, in a nutshell, the record companies greatly benefit from that radio exposure. Sounds like a fair swap, right? Free promotion for free music. However, as we speak, the RIAA is preparing to fight this exemption in Congress. Read the rest of the story at SDCityBeat.com. Caution: strong language.