Replies

Small webcasters paying royalties for playing music on the Internet? Yes, it’s only fair.

No, it's the farthest thing from fair, and here's why. Previously, a radio station would pay ASCAP or BMI or one of the others a fixed percentage of the station's total revenue from advertising per year regardless of the number of times the song was played or how many people were estimated to have listened to it. Along comes web radio and downloadable songs. Certain very large companies, TIME/Warner one of them, were afraid that they would be liable for that percentage of their respective company's entire revenue per year, not just that revenue limited to the part of their business devoted to that particular music-related activity. Because of this, these companies got the law written so that they would have to pay only on a per use or per listener basis. This would then be a very small yearly cost compared to a fixed percentage of their revenue. However, it put small web radio stations into the position of having to do something that no broadcast radio station has to do.

So we have the situation where one large broadcast radio station has to pay a few thousand per year for song licensing (a small fraction of its revenue) and one small web radio station would have to pay what would amount to several times its entire operating budget (tens of thousands of dollars)--not its ad revenue--for playing exactly the same songs, exactly the same number of times, over exactly the same period of time. The two activities, differing only in the technology by which the signal is transmitted to the listener, are being subjected to two entirely different methods of calculating payment, one of them being so costly that it is driving small companies out of business. Call this equal protection under the law? I don't. The only justification for it is that a few large corporations think they'll be protected from having to shell out. Meanwhile, many, many small web-radio stations, which could be generating income for the various artists in exactly the same way that broadcast radio stations do, are prevented from doing so. Web-radio stations that are put out of business by a grossly unfair method of calculating payment won't be around to generate revenue.

This would then be a very small yearly cost compared to a fixed percentage of their revenue. However, it put small web radio stations into the position of having to do something that no broadcast radio station has to do.

Interesting notion, though I'm curious how AOL et al. would be able to make any money from webcasting under the terms required by these agreements.

BTW, one thing I would like to see (though of course since RIAA's real goal is to stomp out webcasting we'll never see it) would be a distinction among streaming 'quality' modes. It's plausible that somebody might record a 192kbps stream of a song and use that instead of buying a CD. It's less plausible that someone would capture a streamed 10-second clip of something that's recorded at 24kpbs and listen to that in place of a CD (it's plausible someone might decide on the basis of hearing such a clip that they did or did not want to buy the CD, but if they like the clip possession of clip would not discourage a CD purchase).