The Copyright Royalty Board (CRB) has recently announced a revised royalty rate schedule that will effectively destroy Internet radio.
Why? Because the CRB rejected all arguments from webcasters and sided with the rates proposed by SoundExchange, the independent group formed by the Recording Industry Association of America a few years ago to collect and distribute digital music royalties.
One of the many endangered webcasters is Pandora.com, whose founder and chief strategist, Tim Westergren, was interviewed during the Feb. 21 installment of the Technology and the Arts podcast.
Tim wrote a piece on the Pandora blog that stresses the effects this–what he calls–“ridiculous” decision by the CRB will have on his company and for webcasting, in general. For the sake of getting the word out about this travesty, here is the full transcript of Tim’s post:
March 06, 2007
RIAA’s new royalty rates will kill online radio!!
The Copyright Royalty Board (CRB) has recently released a revised fee schedule for internet radio. Left unchanged, these rates will end internet radio, period. The RIAA has effectively convinced this federal committee to establish rates that make online radio a non-viable business.
It’s an utterly ridiculous ruling that renders any form of internet radio non-economic. We are continuing in the belief that sanity will return as everyone involved, including the 50 million avid online radio listeners, realize just how outrageous this is.
You can probably tell by this post that I feel strongly about this. Online radio has opened up a new world for musicians and listeners alike. It has brought millions of otherwise disconnected music-lovers back to music radio, and has opened up tremendous access and promotion for thousands of musicians – both obscure and well known.
We are striving very hard to build a business. We employ eleven full time people in our ad sales team, and despite very high licensing and streaming costs, believed that we could make it work over the next several years if internet advertising continues to grow. This ruling drives the licensing fees (fees that are NOT paid by terrestrial broadcasters) completely out of reach, and makes our goal impossible.
This is a terribly ill-conceived attempt to crush a powerful and positive grassroots movement that is sweeping across the music world. The record labels’ struggles have nothing to do with online radio and killing it will further hurt their business, not help it.
We need your help. If you’d like to get involved please write your congressperson. Below is a link to point you to the right person. If you can, please send a letter or a fax that asks for a reply (emails are too easily ignored).
Congressional Directory by Zip Code
If you want to learn more details, try this informative blog post from an attorney familiar with the process:
Now more than ever, thanks for your support.
Here are some additional related links:
If you are a fan of Internet radio services, please contact your congressperson and tell him or her how you feel about this issue. Here is an actual letter about this issue addressed to Rep. Sam Farr and Sens. Dianne Feinstein and Barbara Boxer that would make an excellent template for one you can send…
…or you could use this template from the Soapbox section of Congress.org.
However, it would be wise to use these letters as starting points for your own…or write a letter from scratch. The same letter over and over again does not have the impact of an individually crafted one that includes personal experiences. So if you discovered new music only because of the existence of Internet radio, include that in your letter. Make sure Congress realizes this decision has a cultural impact on those of us who enjoy services like Pandora.
Let’s Save Internet Radio!