The SaveNetRadio coalition will be holding a National Day of Silence June 26 to draw attention to an impending royalty rate increase that could lead to the shutdown of most of the US Internet radio industry.
Most large online music and radio providers are participating including Yahoo, Real (Rhapsody), Accuradio, Live365, MTV and Pandora. Conspicuous in its absence is the now CBS owned Last.fm.
To date there appears to be no comment at all from Last.fm, including no response to questions by users on the Last.fm forums.
On the surface it seems strange that CBS/ Last.fm wouldn’t be participating. Last.fm is obliged to pay royalties in the same way that any online music streaming service is obliged to. CBS is an investor in TargetPoint, a company that allows advertisers to customize online radio ads, pinpointing specific demographics and locations that would be affected by any industry down-turn. Is it perhaps a case of CBS deciding to let the competition die? CBS radio stations stream online and unlike many others in the business CBS has deep pockets and a much larger advertiser pool from which to cover costs under the new royalty scheme.
No matter what the reasoning, Last.fm’s failure to participate in the National Day of Silence runs the risk of causing a backlash. Many early adopters who are also Last.fm users will not be pleased to see a company they champion being a poor corporate citizen by failing to support the online music streaming industry.
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I love neil diamond’s “Coming to America” song.
That’s too bad last.fm don’t have it.
70s song brings me good memory….
I do not understand how inet radio survives with so much video content on the web. For those that are taking a break next week, give http://www.abstract10.com a try! you may like inet video instead of radio.
thx
Jason Jenkins
The Abstract Surrealist
http://www.abstract10.com
Jason
easy, we play music in the background when doing stuff, video on the other hand requires full attention. Oddly enough Last.fm is moving into video as well from what I saw when I was researching this post.
Awesome article! Last.fm has tons of potential. It will be interesting to see what CBS does with it and how these royalty rates effect this market.
well, if they have the pockets, maybe they are just hoping that the other dudes bite the dust. perhaps some of those users left without a station will listen to last.fm. ok it’s a stretch. but the bottom line is, now they have the pockets, so why should they care if their competition can’t payup?
Maybe because it’s a “National” protest and Last.fm is not American? Ok, ok, the owners are American now but the company itself is still UK born, bred and based.
On a personal level I’m sure the people at Last.fm support what is being protested (as do I), but would you honestly expect all those American companies to have a “day of silence” to support a third country like Australia, Canada or Britain in a similar situation?
Yeah, me neither.
Last.FM might have been bought by CBS, but it’s a British-based and British-run company ( http://www.last.fm/about/contact/ ), which might explain why it doesn’t appear to be taking part in the National Day of Silence - “national” meaning, in this case, the USA. If the Americans who organized it wanted global participation, maybe they should have considered calling it an “international” day of silence.
As it says in their blog: “The Last.fm team stays put in London, we’ll grow the company some more here.” ( http://blog.last.fm/2007/05/30.....red-by-cbs ).
I’m not saying they SHOULDN’T support the day of silence, I’m just saying that perhaps in this instance they feel they don’t HAVE to participate.
Uh, after posting I see Markus made the same point as me just moments earlier - and I mis-typed my own name. Doh.
Uh, after posting I see Markus made the same point as me just moments earlier - and I mis-typed my own name. Doh. Posting a correction for that seems to have wiped out my previous post, which was held in moderation, and replaced it with the correction, which was published immediately. Oh well.
Last.fm in Italy not ???
Thanks Duncan! That is great news about them moving into the video category.
thx
Jason Jenkins
The Abstract Surrealist
Markus
there are non-American companies joining the day in support (from what I’ve read) + Last.fm is American owned now even if it wasn’t originally. Morally they should be on side.
@Jason, I appreciate that you want to promote your site, but posting the link in every article is a bit much. When I first clicked on your link and immediately back peddled simply based on the offensive layout. To be honest even after viewing a second time I can’t figure out what your site is about.
It looks like something for the MySpace audience, not for the kind of people who read TechCrunch. Most people here look at dozens of new sites a day and move on. We’re not a way to build a user base for your site. If you want visitors then create compelling content. Don’t spam TechCrunch.
@Jason, stop spamming!
ok techcrunch community, i get the hint, ill take my “urban” content back to the “urban” community, its a shame that the net is becoming one of the most segregated communities this world has ever seen. For the record i dont spam, its called reading then commenting, like “other” people DO ALL DAY LONG ON THIS SITE! but ok, im out, now you guys can have a party!
thx
Jason Jenkins
The Abstract Surrealist
What a shame.
http://www.tekno-world.blogspot.com
Oh, boo-hoo. Poor net radio stations. They got a free ride for quite a while. Now the party’s over. This is just business folks. And businesses that can’t turn a profit go belly up.
There were extensive hearings and the new royalties are not at all unreasonable–for the net stations who bothered to show up and state their cases. The arbitrators looked at confidential listener and financial data from net radio companies (and kept it confidential), and came up with a fair and rather favorable deal for net radio companies.
There are a handful of companies (mainly Live365) that just stuck their heads in the sand, ignored the hearings, and now, due to their special circumstances, of which the arbitrators were not made aware, they are in trouble (although SoundExchange still is open to talking with them). What Live365 did was equivalent to ignoring a complaint that’s served on you and then getting a huge default judgment from the judge.
Here’s a rather more balanced discussion among all the interested parties on the Tech Tuesday NPR show:
http://wamu.org/programs/kn/07/05/08.php#14553
Well Stephen you can boo-hoo all you want, but think about one simple thing. The record companies are trying to hold on to a system that is outdated. Fighting cd copying, mp3, and tapes in the early days. It’s a fight that cost millions an millions of dollars (Euro’s, pounds, pick your favorite) but when will it finally occur to them that instead of strangling music they can find other ways to make money. There are trends of people buying vinyl and cd’s again, just because they love the music so much that they want to support it. Music they might have never heard of if they didn’t discovered it first at an online music station. Perhaps it’s not so much about the royalties but about the principle of the thing?
As a last.fm user myself I am quite disappointed at Last.fm for not supporting this thing. And I just wonder why. If they have a good reason, I would love to hear it!
you guys should investigate the link between RIIA, the music industry, who asked for the rates and CBS
well, you know what they say: if you can’t join ‘em , beat ‘em…oh wait maybe it’s something else…that they say…
oopps wrong saying and wrong link…. i guess i already boycotted myself
well that’s fun!…welcome to the world americans. Europe exist! uuuh-uhh..can you see us? is not hard, we’re just the other part of the planet.
I’m really sad about YOUR radio problems blah-blah-blah…but i must disappoint you guys revealing that here in Europe our companies, like Last.fm wich is located and operating in London no matter where investors are, are doing pretty well and doesn’t seem to have any problems with royalties or licenses or whatever.
Maybe we’ll have one of these days, who knows, but sure we’ll not coming whining overseas. Oh yeah….Pandora was an illegal website and has been shut down. Really, i can’t sleep at night when law is applied uh?
And congrats for the invention of the term CBS/Last.fm..never heard it before, but i guess you on techjunk call even lamborghini-volkswagen and consider it a german car, is it right?
you’re so smart…
Dee Dee
CBS owns Last.fm (it is an American owned company) and I’m not American, so by all means write stupid comments about Americans all you want but you’ve missed the mark. These changes affects everyone who listens to music online and geography makes zero difference.
Stephen
Net radio stations have never had a free ride and all they are asking for now is to be treated the same as Satellite Radio instead of driven out of business, that’s not to bad, is it?
Just unmoderated a comment from Sommerset Bob: it might be a US thing and Last.fm is HQ’d in London but the majority of their listeners are in the US + they are US owned. By not participating they are sending a message that they don’t care, and it’s not inconceivable that a similar situation could occur in the UK, indeed my understanding is that it’s already twice as expensive to stream music from the UK than it is from the US (prior to the coming changes). Lets hope Last.fm doesn’t need industry support if problems arise in the future!
Duncan -
‘These changes affects everyone who listens to music online and geography makes zero difference.’
Sure i’m missing something when you insist to point out that Last.fm in an american company so must be loyal to american industry…just to let us know few lines later that in laws and music licences, because this is the matter we’re talking about, geography makes zero difference.
Now i think if you can go on and convince about this collecting societies and music labels in the rest of the planet, you’ll change the history of the music for good.
It seem to me a very childish reasoning - american radio are in trouble, so all the radio in the world must be in trouble and help -
Every country has his own laws: protesting in manchester because speed limits are too low in downtown los angeles doesn’t make any sense and doesn’t solve anything. Even if we drive the same car models. That’s it.
I’m sorry for your radio guys, you have still a pretty solid constitution…i suggest you to work on that if this laws are so unfair.
yep definitely a bad decision, I guess they will publish something regarding the subject on their site or something explaining why they “can’t” participate but “they join the move”
Man you guys just lick up this “thumb your nose to the man or else you’re a bad citizen” crap don’t u?
The reason the startups can do that is because they have nothing to lose. Basically if costs go out, they go out of business. CBS on the other hand produces content, Last.fm is only a minor fry in their business. If they supported this, they might be impacting their OWN content producing business in the future.
IMHO CBS is just being smart… and you guys railing on CBS are just plain naive.
Sorry I mean if costs go UP…. not out.
Totally off topic:
Businessweek.com is down. I see this on their homepage:
OK good for MTV
come here for search item before BUY
Goto
http://www.reviewitem.com
The real point is to contact your congressperson via phone, email and letter to level the playing field so internet radio has a chance to compete in the marketplace. CBS (US based owner Last.fm) should get its act together and support this cause. While it has some “traditional” assets in broadcasting to defend, it is also trying to go forward in the digital age and think of itself as an “audience company”. Its audience cares deeply about this issue and it’s clearly in their long term interests to support it. The founders of Last.fm (Felix Miller, Martin Stiksel and Richard Jones) should take a stand and block US IP addresses that day and not be swayed by their recent cash out checks or hide behind “we’re in the UK, let the Americans figure it out”. The government should be supporting development of new industries (remember the elimination of tax on ecommerce?) not snubbing them in their infancy.
So for the techochallenged, please tell me this does not have an effect on my streaming my favorite radio station.
do I read this correctly? block the users to help the users? I can only ask wtf?
can the users please protest themselves? what about all the users who want their radio to play instead? is this forced civil disobedience or what? let’s come down those high moralist horses gentlemen.
let’s punish the users for the mistakes of the industry? where have I heard this before? ….
“Last.fm’s failure to participate in the National Day of Silence runs the risk of causing a backlash.”
I disagree. Why punish the userbase for what is an argument between the royalty board and the webcasters.
Duncan, the word “moral” encompasses a very few serious duties, none of which exist in the corporate realm where the primary duty is to shareholders. Participating in the day of silence has a cost. As you suggest, not participating may also have a cost. But this decision is one for management of affected Webcasters to make.
For those supporting and participating in the silence, it’s not at all productive to suggest another party, even one as closely affected by the core issues as Last.fm, is somehow REQUIRED to tow the line. Support may be expressed another way (perhaps a way that doesn’t deny listeners service).
I’m not suggesting you can’t or shouldn’t be disturbed by Last.fm’s alleged indifference. Nor should listeners upset with Last.fm hesitate to take their business elsewhere. But these sentiments address the costs and benefits of participation, not some absolute notion of morality or corporate rectitude.
The real punishment is losing the service, not a wake up call to help save it.
faisal: The users are like all of the trees at Ypres in the fall of 1917. The users are the battleground itself and the fees determine who gets access.
Great post Duncan.
Raising the royalty rates for online streaming of RIAA associated songs is ridiculous. It WILL be the downfall of many Internet radio broadcasters and start-ups. Rightfully so. Most online broadcasters failed to create a business model that wouldn’t be affected by royalty rates. Consequently, they will pay…or die.
There are simple ways around royalties and the RIAA. It’s all in the release. Artists see practically nothing from radio royalties, be it terrestrial or online. Yet they love the exposure. The exposure spreads the word. The exposure sells their music and merchandise. The exposure packs the venues. A simple release waiving the right to royalties from airplay does the trick. Would they go for it? You better believe it. Unsigned artists, independent label artists, and major label artists…they do it every day. Several start-ups have taken this approach. And they’ll be the one’s who are left standing.
However, when looking at this issue, you’ve got to ask yourself why rates are going up. It is clearly a last ditch effort for the major recording companies and content producers to monetize the very source of why they’re losing money. Scratch that…not losing money…but making less money rather. The RIAA is the group that represents that US music industry. Their sole goal is to ensure the financial “vitality” of its members. According to the RIAA site, members take a stake of 90% of all sound recordings produced and sold in the US.
Albeit, some people still purchase albums (myself being one of them), online entertainment as a whole has grown tremendously. It’s undeniable. You can listen to anything you want, watch anything you want, and participate in anything you want 24/7 worldwide from your computer. And there are dozens of programs available that allow online entertainment seekers to download the streaming content without spending a dime.
In return, although still racking in billions in annual revenue, the industry is seeing less profit.
From a business perspective, for the RIAA and its members, it makes perfect sense to raise royalty rates to try to increase the bottom line profits. Will it work? Will it make a significant difference? Not a chance. The industry as a whole is grasping on to a dying model. They’ve missed the chance to utilize innovation and technology to create a sustainable business model. As we will see a great deal of companies and broadcasters go under from this rate hike, we will also begin to see the downfall of the RIAA and its members.
Last.fm isn’t getting on board with the protest. Whether it’s because they’re based in London, or because of the HEAVY affiliation between CBS and the RIAA. Why challenge it? CBS owns Last.fm. CBS is the RIAA. So when the other companies and start-ups go under…Last.fm will be alive and kicking.
But rest assured, when the RIAA and its members start to crumble, Last.fm will be going down right along with them.
Greg do your research:
“CBS Records was a record label group (as Columbia Records in the US and Canada) owned by CBS since 1938. CBS sold CBS Records to Sony in 1988 and the record label company was re-christened “Sony Music” in 1991, and eventually Sony BMG Music Entertainment when merged with BMG in 2004.
Sony purchased from EMI its rights to the Columbia Records name outside the US, Canada and Japan. Sony BMG now uses Columbia Records as a label name in all countries except Japan.
CBS Corporation revived CBS Records in 2006.”
http://en.wikipedia.org/wiki/CBS
the new cbs records is an online only label and has 4 artists.
“CBS is the RIAA.”? err, no!
they are a broadcast corporation, including radio, and as such are liable to pay those royalties too.
Last.fm = majors only? think again …
agreed!!!!!
I agree that something needs to be done, but I don’t agree that this is the answer. It’s like the NHL hockey strike - the players thought it was a great idea, but it potentially hurt the sport more than it made their point. CBS probably doesn’t want to take a stand one way or another, but it’s the customers - not the vendors - whose boycotts make the most difference. It should be the listeners - not the stations - that take the stand because at the end of the day, that’s who pays the bills and that’s who corporations most care about.
Just my .2
and @ jason, no need for a meltdown. everybody would love to have you, but nobody here puts that goofy crap about their businesses like you do. make smart, well thought out comments and plenty will hit your site to find out what brilliant mind is behind it. get it?
you may end up selling million dollar mortage home. You will start living apartment.
Advice:
Don’t ask for more capital rise for web 2.0. if you do. you start killing yourself. you may endup divorce, broke up date, lost assets, etc… It’s very risk. It will make harder to pay it back to banks.
yeap, you have pay income tax, IRS, state tax, startup tax, bank interests, mortage loans, and lot’s of thing. Filing chapter 11th will not save you life.
What last.fm need to do is redesign a site or advertise on TV?
Great research on the history of CBS and its holdings. I understand what you are saying. And you’re 100% correct. My example of “CBS is the RIAA” was not meant to state that CBS is literally the RIAA. Nor was it crucial to the point that I had hoped to make. The RIAA is comprised of thousands of members. Including so called ‘independent labels and companies’. It was meant as a figure of speech with the goal of illustrating how incestuous and intertwined all of these companies are. CBS Records was sold to Sony. Viacom owns CBS (it is interesting why only MTV Online is participating in the boycott while other holdings are not). Another thing to remember is that CBS is not only a broadcaster, but they also produce a great deal of content, and also own the rights to this content. So, in some case, as a broadcaster they pay royalties that ultimately go where? Back to themselves or one of their holdings or partners. The list still goes on. It’s all connected. Throw in the enormous and tight business relationships, joint holdings, partnerships, and licensing agreements that all of these companies have with each other. What is good for the RIAA is good for CBS. What is good or bad for CBS will affect Last.fm.
It is clear that something big is happening. What that is? We’re just going to have to see.
I wish SaveNetRadio the best of luck. They’re going to need it.
Sorry Greg, CBS and Viacom split up last year, they are 2 seperate companies now:
http://en.wikipedia.org/wiki/C.....BS_Studios
what MTV does is their business and does not affect Last.fm. Just for the record. I think though misconceptions like this about corporate america fuel a lot of the view points here.
MTV is supporting the silence while viacom sues Youtube. Last.fm stays online and CBS gives its content to youtube. Who is doing the right thing here? Spotted what the users want yet?
riaa?
I am aware of that split.
CBS Corp.
Viacom
Viacom buys CBS. CBS is now Viacom.
Viacom splits seperates the two companies so that there is now a Viacom and a CBS Corp.
Guess what? It’s still the same company.
And further, as per your reference link…
“Both CBS Corporation and the new Viacom are still owned by Sumner Redstone’s company, National Amusements.”
Like I said. It’s a big intertwined mess.
And this is just the information that WE the consumers know.
Maybe last.fm aren’t People-Ready. Thanks for deleting my previous comment by the way, clearly it kicked you in the nuts.
I would hate to see every other station go and last.fm stay!!!
What’s the problem if Last.fm apparently feels no need to protest the increased royalty rates? Perhaps Last.fm and its new owner CBS are confident that they can build and sustain a viable business despite the increase?
At the end of the day, it’s clear that consumers increasingly enjoy Internet radio. As a consumer, I care little about the logistical issues behind how the content those providers deliver to me is acquired. If an Internet radio provider cannot build a viable business, why should we blame rights holders and ask government to step in? Shouldn’t we ask the Internet radio providers why they apparently can’t come up with a business model that makes them money while adequately compensating rights holders?
If companies that rely on content from third parties cannot pay what the owners of that content and the market decides that content is worth, that’s too bad. As a consumer, I certainly don’t care about a “boycott” that asks me to support the financial interests of one entity over the financial interests of another entity. There are no good guys and bad guys here. Everybody’s in business to make money and if you can’t afford the components (in this case content) necessary for your business, it’s disingenuous to portray the makers of those components as greedy suits. Last time I checked, Yahoo, MTV, Real, etc. were all as eager to make money as the recording industry.
http://www.drama20show.com/200.....net-radio/
Strange Yahoo might killed its own search engine.