WEBCAST ROYALTY RATES BASED ON YAHOO DEAL THAT WAS DESIGNED TO HURT SMALL WEBCASTERS

CARP bombshell: LIBRARIAN OF CONGRESS SET WEBCAST ROYALTY RATES BASED ON YAHOO! DEAL THAT WAS DESIGNED TO REDUCE COMPETITION AND HURT SMALL WEBCASTERS

Broadcast.com founder Mark Cuban tells "RAIN: Radio And Internet Newsletter" about the strategy behind the RIAA license that Billington used as template for the industry

CHICAGO (6/24/02): The voluntary royalty deal between Yahoo! and the RIAA that the Librarian of Congress announced as his template for the entire industry last week was a deal crafted by Yahoo! to shut out small webcasters and decrease competition, Broadcast.com founder and Dallas Mavericks owner Mark Cuban revealed to "RAIN: Radio And Internet Newsletter" in an article published today.

Although he had left the company by the time the deal was signed, Cuban explained that the deal he originally helped put together conceded a high royalty price to avoid a "percentage-of-revenue" royalty rate. By doing this, Cuban explains, he hoped that low-revenue webcasters would be unable to compete against the well-funded Yahoo!

Cuban also explains that he wanted a "per-stream" deal because he intended to use "multicasting" technology to serve multiple listeners with a single stream, thus paying royalties to the RIAA on only the initial streams.

The thinking behind the deal structure, Cuban explains below, was that smaller webcasters, who would be unable to afford to webcast on their own under such terms (because of the fixed rates), would be compelled to use the services of well-funded aggregators like the Yahoo! Broadcast service.

Cuban sold his network of streaming broadcasters, Broadcast.com, to Yahoo! in August 1999, for a reported $5.7 billion.

BOTH THE CARP AND BILLINGTON USED THE YAHOO! DEAL AS THEIR TEMPLATE FOR THE ENTIRE INDUSTRY

On Thursday (6/20), Librarian of Congress James Billington set royalty rates for webcasters, retroactively to October 1998 and continuing through year-end, based primarily on the terms of that Yahoo!/RIAA deal. The royalty rate of $.0007 (7/100th of a cent) per song per listener is currently greater than 100% of industry advertising revenues and thus will bankrupt most of the smaller webcasters and drive broadcasters' streams off the Internet, many observers believe.

Most webcasters had expected a royalty rate expressed as a percentage of their revenues, as this is the case for the royalty that broadcasters and webcasters pay composers and as is the precedent in almost all other countries.

The final deal between Yahoo! and the RIAA was the sole "marketplace deal" upon which the webcast royalty rate was based, both in the CARP (Copyright Arbitration Royalty Panel) recommendation last February and the Librarian of Congress's final decision on Thursday.

If you enjoy the diversity of internet radio I beg all fellow Freepers tae write Congress aboot this injustice. Here is a copy of ma letter:

Hello and thank you for your time,

I manage Celtic Pub Radio, an internet station which streams from Live365.com.

Per agreement with Live365, I recieve no compensation whatever for my formatting and voice production work. No banner ads, no on air ads, no promotion of any kind.

The station streams Irish and Scottish music produced by independent artists who have no connection with the RIAA in any form. I provide cultural music which cannot be found anywhere on AM or FM stations. While my listener base is comparativly small, I draw 600 to 1100 listening hours per 30 days and over 1000 listeners have bookmarked my stream.

The sound quality of this stream is poor (32 kilobytes per second) as compared to a CD (192 kbps) and is streamed in m3u format which cannot be recorded and played back as a mp3 file can.

I cannot believe it was the intent of Congress to shut down stations such as mine by passing the DMCA.

The decision by the Library of Congress on Carp has placed such an unfair monetary burden on Live365.com (which was already reeling from the dot.com dwindling advertising revenues} that even if it survives, the prices it will have to charge us to stream will drive me and thousands of other broadcasters off the air.

Please intervine, change the DMCA and do it quickly before we, who offer alternative music are swallowed by the RIAA monopoly.

In effect, what the RIAA is after is censorship and total control of all musicians and broadcasters. I can't think of anything more un American.

I say again, protect freedom and freedom of expression.

Sincerely,
Fergus MacCool

Related link:
http://www.freerepublic.com/focus/news/703753/posts

I'm very sorry if this has already been posted. I cudny find it in the search.

Please help save internet radio

Fergus

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