I apologize in advance for this being very long. If ya need to, read a bit, walk around the room and ponder, drink some grape juice, then come back for a wee bit more. I won’t be going anywhere.
Instead of deconstructing this line of reasoning from my dear father in essay format, I’ll just go through and pick on the pieces that I shook my head at the most.
Here goes.
Meanwhile, the blogworld continues its collective breathing in a bag over the Internet radio providers surprise: Rate Increases. Whoa!
Nope. Not the Internet radio providers that are irking me. Live 365 is not the one who’s deciding the rates. The individual radio stations (which would be the ‘providers’, no?) who make up Live 365, and (as another example) the network of radio stations through iTunes, also aren’t determining the rates. Neither is Pandora, Finetune, potentially Last.fm, and the hundreds of other folks out there trying to imagine staying afloat under these new rates.
On the SoundExchange homepage, they point to The Copyright Royalty Board’s Royalty Rates for Non-Interactive Webcasting from 2006-2010. So now we’ve gone one step up from the guys who collect and distribute the royalty fees (SoundExchange) to the girls and boys actually making the decisions around here (CRB).
Which Wikipedia says is…
…a system of three Copyright Royalty Judges who determine rates and terms for copyright statutory licenses and make determinations on distribution of statutory license royalties collected by the Copyright Office of the Library of Congress.
Do they provide music? No. Power radio? Nuh-uh. Decide what gets played? Nope.
Which brings me to my next point.
I was ignoring this stuff because I have this general belief that free markets always solve these issues..
The last thing in the world anybody should want is Congress getting involved.
Sorry – digital music is not a free market, sadly. This is a heavily regulated, yet very fuzzily legislated, emerging marketplace. The fact that this is a Congressional issue and people are lobbying is not surprising, nor is it new – we’ve seen this (well I haven’t, but I’ve read about it and heard about it in one of many great university classes – thanks Dr. Ellis!) before with the oft mentioned controversial origins of the VCR (“The Film Industry and MANKIND will melt into a puddle of goo!!).
With new technology comes new fears. And laws.
And potentially harmful consequences for the very same “free enterprise” my wickedly smart Dad (one half of the best parents that ever existed, which meant that I had a sweet ass set of analytical skills to hone in university) is so eagerly determined to protect. Onward we go…
As he has been a long time Live 365 listener, I’m not surprised this was the reference point.
But regardless of what I or live365.com does, that small guy isn’t any better or worse off because all these Internet radio stations are not giving these independent/working artists air time.
Ack. This is so patently untrue I don’t even know where to begin. Do I start with the handful of people who’ve mentioned that they swing by my blog to check out my handpicked Finetune selections…which has been up for a month, tops? Do I discuss the band I saw for the second time in two weeks this evening who was a radio find of a friend of mine? Do I talk about other friends who gag at mainstream radio and won’t listen to anything but British underground, teeny tiny online radio stations to hear what’s coming up next (while in Canada, mind you)? How about the dozens of band names I’ve scribbled down on pieces of scrap paper, envelopes, Starbucks cups, and almost a kitten tummy once (just kidding) to check them out later when I’m not doing whatever else I happen to be doing at that moment?
Yeah. Right. Internet radio is exactly like the stuff you get when you push “FM” in the car.
Cue laughtrack.
I appreciate my father’s taste in music for being wonderfully predictable and distinctively him, but just because you’ve listened to one Live 365 station doesn’t mean you’ve listened to them all or, gee, investigated the bazillion other sources of streaming radio waiting to be tapped within your Internet browser of choice…all of which are threatened here. There is a wealth of music alive and fighting online that is nowhere near the Billboard charts…and happily so. There is also an abundance of listeners grateful to see an alternative (that consists of thousands upon thousands of alternatives) on the scene. Soft Jazz FM is…shhhhh….not a very good case study, IMHO.
On to my next point…are you getting bored yet?
Jason Fry at the Wall Street Journal got it right with the headline: Music Industry wants higher rates but are the labels undermining themselves. Exactly right.
No argument here – just a question: did he read the actual article?
Net-radio fans are angry, but they shouldn’t be too hasty in blasting the Copyright Royalty Board. The real problem is a pair of misguided decisions made by Congress in the 1990s.
Tim Hanrahan and I wrote about this issue nearly five years ago, and it’s depressing to see how little has changed. A brief recap: The Digital Millennium Copyright Act of 1998, building on 1995′s Digital Performance Rights in Sounds Recordings Act, said Net-radio firms had to pay performance royalties on songs played in addition to composer royalties on those songs. Terrestrial radio stations pay composer royalties, but they don’t pay performance royalties, under the long-established rationale that record labels benefit from the promotional value of songs played on the radio.
No argument there – The Copyright Royalty Board is not the only guilty party here, for sure. The DMCA hasn’t killed the digital music industry, but it sure as hell has made it more difficult/tricky/restricted. What Jason says later on is exactly why people are pissed about such backasswards hypocracy.
To me, that virtuous circle sure sounds like the old “radio is free promotion” bargain underlying traditional radio — for which performance royalties have never been paid in the U.S. Yes, there are technological differences between terrestrial radio and Net radio, notably the ability to guide what’s played, skip songs and keep track of what I like. But those differences seem to work to the advantage of artists and record labels: With Net radio, I’m more likely to hear songs I like, bookmark them and buy them. One listener’s experiences aren’t necessarily grounds for extrapolation, but this bargain seems like a pretty good deal for the recording industry, one it ought to be careful about altering.
Le sigh…Nuff said there.
I love my dear father, respect and admire and have learned a tremendous amount from him. But I strongly disagree that a ‘let it be/it’ll work itself out’ approach is going to be any better than getting up off our collective bums and at least trying to influence a different outcome.
Laissez faire indeed.
Rachel,
Well done. You continue to master the best debate rules out there. Your response was well thought out.
A few points for you to noodle on.
First, the collective bag breathing comment was meant to make the point that people like Pandora, etc, are suggesting to the world writing congress is way to solve the problem. While it is a path, yes, I disagree with it. We should kill the CRB just like we killed the Transporation Department’s power to regulate airfare. Make the penalty for stealing high, the penalty for copyright theft high, the process for reporting it easy, and the path to justice reasonably quick. But kill price controls. Kill them dead.
You said:
“This is a heavily regulated, yet very fuzzily legislated, emerging marketplace.”
Which was to my point. It shouldn’t be. Today, if joe schmo and three friends collectively product 1000 tracks of original music, put it on Amazon’s S3 storage system and charge $1 A YEAR per customer, they keep all the money and can tell the CRB, Congress, the RIAA, and SoundExchange to go blow. They could charge a million dollars a year or be free or charge euros, peasos, lira (just for old times sake) or Lindon Dollars. In fact, now that I think about it, go set up a music radio station inside second like where artists can put stuff into your system, you charge whatever, and split the revenue.
The point? Free market. There is no regulation that says, you have to be in soundexchange, have to use certain tools, have to charge certain amounts, etc. The notion of heavily regulated is nonsense. There is a heavy amount of protectionism, for sure, that is designed to keep fat cats fat and the little guys out of the game. The rates being jacked up by the CRB is a giant wake up call, last straw that should have Pandora, Last.FM, Live365.com, etc, all immediately forming up an “open source” type solution to the problem, collectively telling the same people Joe Schmo above told to go blow; to byte me.
Free Markets.
With respect to “Ack” and my Live365.com comments, me thinks you missed the point. I picked a specific stream to listen to. It is Jimi King who is doing the playlists. If he could choose from a zillion free/good ‘smooth jazz’ tracks and pay half the royalties, he would. Today, that gov’t mess and the lack of a new solution prevents competition. If I’m an unknown artist, please CRB, jack the rates up to 100 bucks a second because I will offer up my music at 3 cents a minute. If you are buying (as the internet radio station), what do you think you will buy. Right. Again, free markets.
Also. You make the point of thousands and thousands of little guys way off the billboard charts happily being out there. True except I don’t have them and I’m paying to hear them which would put money into those little guy’s pockets. Wait, MusicIP, well different point.. The point here is that if those unknowns were in a bucket where the play rate was cheaper, let the CRB jack up rates to the point that the Pandora/Last.FMs of the world will go diving for the new stuff in an attempt to find a supply of good product to sell (or give away) to customers, aka you. That was my point.
And, yes, I did read the Jason’s article. Carefully. Blame Congress, take shots at the CRB, etc, doesn’t matter to me.
What matters is that we need to break the model of complaining to Congress. We simply make the problem go away via free enterprise. Create a different/better solution. Ebay is an impossible solution without the internet. Same applies here. With the internet, this problem can be solved. That’s the macro level point, Rachel.
You did a wonderful job of grabbing various points, my bad use of pro-nouns, and investigave reporting of my music tastes/reading activities. Bravo.
In the end, tho, my view remains the same. The internet radio industry can -and should- solve this problem themselves without further involving the U.S. Govt.
Call your mother..
Continuing to be extremely proud of you,
Dad
“Do I talk about other friends who gag at mainstream radio and won’t listen to anything but British underground, teeny tiny online radio stations to hear what’s coming up next (while in Canada, mind you)?”
Yay! Slava got mentioned in Rachel’s blog!
Very insightful post. I appreciate the links to get a story that’s a little more well-rounded. I don’t have any grape juice, though, so I read it all in one go and now my bum is tingling.
Xo.
This feels just like dinner table conversations…except in different time zones and with beyond large pauses in between.
I don’t see airline deregulation as the same situation here…as I said, ideally this would be fantastic – but I don’t see it happening anytime soon since the traditional recording industry and their pals the RIAA are too firmly set in their clamped down, restrictive ways. Maybe I’m just being pessimistic, but until they see how bleeding companies who are in effect trying to INCREASE the profit margins of the majors (along with a multitude of minors and mini players) deregulation just doesn’t seem like a possibility. It’s not that I don’t believe in free markets, I just think we can’t sit back and wait for them to become an option – gotta work with what we have.
And as far as history goes – didn’t it take a guy appointed by the president in the 70s to make the point that airline deregulation was good for the US economy? With all this being too new and fear being far too rampant at this point, the way regulations are developing, there’s little chance that ‘online radio’ will grow into a market prominent enough to make that kind of an impression.
I understand your argument to a certain extent and I don’t dispute that some of the ‘hoopla’ and panic that’s been associated with this outrage is slightly obscene and can easy obscure the actual issues at hand. But I hold firm that people should still explore petitions and political avenues associated with issues such as this, even if only to educate themselves on what’s happening and how it effects them.
As a member of an incredibly lax, uninvolved generation, it’s a concern that too many people think they can’t do anything about this situation. That’s why I ended my post by saying “you have a voice”…we’ve got to start doing something at some freakin’ point.
I say sushi and sake next time your in town (next week?) to continue this debate? :-)
And yeah, picking up the phone right now…
P.S. – Bobby all I have to say is your ‘bum tingling’ comment made me laugh so loud diet coke almost came out my nose. Not good for the Macbook (but probably good for the soul).
To Rachael and Dad: I truly enjoyed your interaction and exchange of ideas. The problem is you missed the real point which is,as usual, all about me.You see, I want to listen to the freakin radio station that I am used to and enjoy and now I can’t. And you say the US government has screwed me up once again. I am too old to have to endure this. I tell you it’s all about meeeeeeeeee. And because I was depressed all winter, I avoided the news like the plague.I had no clue this was upon us.I mean really, why? So, I will take action.I will buy no new cds;I will drag out the million cassettes from the storage house, and maybe I will hookup the turntable to something and record the really old ,scratchy.etc lps to a tape until I settle down. Oh,did I mention I spent about 6 hours today trying to get live 365 to work on windows, real player ,tried winamp and 365′sown widget player.I now have 3 seperate user names and passwords and none of them work. I ran a4 hour virus scan also. And then I found your blog! Thank You!! At least I won’t be taking my computer to the shop.(unless I have done something nasty to it trying to fix this problem)