Last.fm Not Joining National Day Of Silence?

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.

Does anyone think that all these fees might just drive the internet radio scene more underground? What’s stopping internet radio from popping up in countries with less regulations and continuing to broadcast whatever they want whenever they want? Seems to work for torrent hosts and gambling sites….

Please keep in mind the difference between rights holders in this and every other music copyright argument.
RIAA = record companies= sound recording owners
ASCAP/BMI etc for other countries see your own rights society= songwriters=musical works owners.
THere is a fundamental difference in motive and execution when it comes to these two very different groups of rights.
I am wearying of seeing how ‘evil’ the rights holders are.
SOngwriters do their best to get a little money for their godgiven craft. Please don’t mix them up with Record Company Executives who happen to own one recording of a musical work (but not the work itself).

cheers jeff

I deleted my profile at last.fm the moment they announced CBS had bought them. I knew that what we had at last.fm was over, CBS is MSM and that is all I have to know to know I want no part. I am actually shocked that anyone is surprised that Last.FM is not participating in the day of silence. CBS owns Last.fm period. enuff said.

There is an awesome sounding benefit to save net radio on july 1 in san francisco:

http://notshocking.com/?p=33

Well I guess this will porbably boost the ratings for Last.fm on that day.

Joe Tao: please provide a rational, logical explanation as to why CBS owning Last.fm is bad. As far as I’ve seen, Last.fm is still providing the same great service that it did before the acquisition. Note that “CBS = mainstream media = evil” does not constitute an educated argument.

It always amazes me how idealistic and irrational people are. Does anybody really believe that these services are founded by individuals and then backed by professional investors solely for the purpose of remaining independent and thumbing their noses at The Man? A little hint: a good portion of the startups that provide services we love to use are hoping to get bought out by somebody like CBS. If they get bought out and the acquirer implements radical changes that ruin the service, displeasure is warranted, but simply deciding to leave a service because they get acquired by a “big evil corporation” is just plain childish. If your black and white view of the world sees things this way, you might as well not use any service that has raised money from institutional investors. After all, aren’t they “evil” too?

Somehow I get the feeling that most of the commenters (and Duncan) don’t really have a grasp on this issue.

Here goes.

Internet (and terrestrial) radio stations pay songwriter royalties now, today (these go to the publishing company of the songs). These are about 3 percent in the U.S. (5 percent in the U.K., similar levels in the rest of the EC).

In the U.S. neither internet nor terrestrial stations pay royalties for using the performance (i.e., royalties to the singers/musicians).

So two issues, the song and the performance. Right now only one get compensated in the U.S.

In most developed non-U.S. countries, however, radio stations do pay royalties to performers, in addition to the royalties to songwriters. All E.U. countries do this. In the U.K. it’s 5 percent to the performer (and 5 percent to the songwriter).

As mentioned above, in the U.S. there are no performance royalties now. This is because the U.S. copyright law preceded (1909) those of other countries and preceded the existence of a strong lobby for performers or the recording industry. There’s been a back-and-forth for decades on this between broadcasters, who don’t want to pay, and performers and record companies, who feel they should be compensated.

(Side note: most U.S. performers never get their royalties from the EU because of reciprocity issues, which would be partially solved by performance royalties for U.S. radio.)

The new royalties would simply bring internet radio in line with what is done for radio in the EU and other countries, and compensate performers for their recordings. Isn’t that fair? I don’t see how anyone can have a problem with this.

There _are_ some side issues:

– Are performers getting a fair cut from their record companies? They signed arm’s-length contracts not under duress, but perhaps reasonable people can feel that their is some imbalance of power here (even in the internet age?). If so, that is fine, but it’s a separate issue that should be addressed in legislation regulating recording negotiations, not by denying everybody involved in the performance royalties.

– Isn’t there a lack of fairness between internet and U.S. terrestrial? Yes there is, due to the historical anomaly mentioned above, and that should be resolved by instituting royalties for U.S. terrestrial radio stations. U.S. terrestrial stations are the ones out of whack with the rest of the world.

– Are the royalty levels fair? Maybe, maybe not. That was dealt with in excruciating detail by the arbitrators. Unfortunately, many internet broadcasters boycotted the proceedings, so important data was not available to them. (By boycotting, what I probably mean is that small internet broadcasters were so legally unsophisticated they probably didn’t even have law firms and didn’t know how important this was to them.) If the royalties are too high, that is a legitimate issue, and there are ways to rectify that using economic arguments based on actual business data to U.S. legislators.

– Wouldn’t it be better for artists not to get royalties, because the viral publicity of internet radio benefits them more? Maybe so. But their performances are their property, under copyright law. If they want to be self destructive and insist on immediate royalties in place of long-term viral publicity, that’s their right.

Remember this about copyright law: Music is governed by the unique concept of “compulsory licensing.” If you write a novel and I decide I’d like to publish it or make a movie based on it, I cannot do it without your permission, even if I say I’ll pay you royalties. Only in the realm of music can people just up and use the material without any permission. Their compensation comes in the form of royalties set by arbitrators. To be absolutely in line with the rest of copyright law, compulsory licensing would be abolished, and you’d have to get written permission directly from the rightsholder for every broadcast.

I’m cancelling my my account at Last.fm if they decide not to observe the day.

One of the things I enjoyed about Last is their community and the way they treat their members. If they don’t observe the day of silence, it means they no longer feel their community is important and are instead about the money and the business (CBS).

Ok CBS is broadcast radio the over the air stations DO NOT pay these royalties at all. and a lot of stations from outside the US will join in mine included. WHY?

If the RIAA in the US get away with this other countries will follow and the only music on the eb will be top 40 that is what the record companies want to control what you hear and to get rid of the independents. That is both Radio and labels.

“If they don’t observe the day of silence, it means they no longer feel their community is important”

how is turning the raido off over leaving it on, better for the community??

“and are instead about the money and the business (CBS).”

this is about paying A LOT of money to the recording owners. Last.fm is getting no money for this! They are losing money by not turning off.

what all the others are doing is save one day of royalty payments

how is your argument making sense?

What Last.fm is doing is sticking it out, like they always did, so the community can listen to music. wake up please.

Great post Stephen. Most people who use the “terrestrial radio stations don’t pay royalties” fail to realize that they do (to songwriters) and that a big battle over terrestrial performance royalties is brewing. I agree with most of your points, however:

1. Why should there be legislation regarding record label contract negotiations? The government’s job is not to protect people from willingly signing what others might consider a “bad deal.” There are so many options for talented recording artists today. If you get an offer from a major label and feel like their terms are not acceptable, go somewhere else. We don’t need legislators involved in this; if a contract signed is legally questionable the court system is very capable of dealing with the issue.

2. If the royalties are too high, it’s the fault of the Internet radio providers who knowingly or unknowingly didn’t show up for the debate. Congress should not listen to any party that decided not to participate in the proceedings. You snooze you lose. It always amazes me that people will be given a forum to participate in major decisions, fail to do so, but then have no problem wasting taxpayer dollars by trying to get the courts and Congress involved. Why not just show up in the first place? At the very least, if you don’t like the decision, you’ll probably have a valid basis for claiming that your arguments were ignored.

3. I think there’s a valid argument to be made that the “publicity” received from radio play does not do as much for music sales as one might think. In fact, the concept that terrestrial radio boosts sales significantly and therefore shouldn’t be subject to performance royalties was an after-the-fact argument created by broadcasters to justify why they shouldn’t have to pay performance royalties during past debates on the issue. My personal suspicion is that there are consumers who make purchases after hearing a song on the radio (whether it be terrestrial, Internet, satellite, etc.), however the majority do not. More may have in the past, but with so much piracy today and disrespect for the parties involved with the creation of music, it’s probably more likely that somebody will hear a song and download it for free on a P2P service.

These rate hikes sound nice in theory. In reality it’s just a money grab by the RIAA.

The rate increases were proposed by Soundexchange, which is an organization spun off from the RIAA specifically for the purpose of collecting royalties off of digital music. Except they don’t collect those royalties for just RIAA artists, they collect them for ALL artists. Whether those artists want them to or not. Whether those artist give them permission and consent to or not. (and they get to collect “administrative fees” for this “service” on top of it).

This, of course, is an example of REAL copyright infringement - someone profiting off someone else’s work without permission or consent - and part of the original intent (not the sort of twisted abominations it’s been warped into) of copyright laws to prevent.

Of course artists are free to collect these royalties from Soundexchange, IF they join and pay a fee to do so. (Kinda sounds like an extortion racket to me). If they opt not to join (and pay a fee) to collect their money, Soundexchange is LEGALLY ALLOWED KEEP ARTIST’S MONEY (again, an example of real copyright infringement and a clear violation of the real intent of copyright, despite how “legal” the whole process is).

Of course most major label artists will see next to nothing of these fees, since most of them have been forced to sign over their rights in an effort to get greater exposure (and draw people to their live shows, where most bands make their real money) and the efforts of the RIAA to “shortchange” their artists (see their petitions to the courts to reduce artists royalties as well as lawsuits by artists against the labels for improper payment - specifically the Cheap Trick/Allman Brother lawsuit against Sony).

Smaller labels and artist won’t benefit much since they generally rely on the smaller broadcasters (the ones most affected by this increase and likely to be driven out of business) for airplay and exposure given the fact that most of the large outlets play mainly major label artists (thanks largely to tactics like the major labels long and very well documented history of payola). Most of whatever fees (after the “cut” - in the form of membership fees - they have to pay Soundexchange) most of them get will likely be offset by the decreased exposure of people hearing them and buying their CDs/digital music or going to shows.

So I’m left trying to figure out how this really benefits, in real practical terms, anyone but the RIAA and the major labels, who stand to benefit directly from the rate increase, indirectly from Soundexchange, and all the while squeezing competition out thereby putting even more pressure on artists to sign with major labels (and thereby forfeit their rights) in an effort to make a decent living.

@#60 - “what all the others are doing is save one day of royalty payments”

That is the most idiotic thing I’ve heard.

The amount Last.fm spends on royalties isn’t jack squat to CBS.

The reason Last.fm will operate that day (if they do) is because Last/CBS doesn’t give two shits about making more payments–in fact they probably prefer higher royalties because it means lots of other stations and websites (read: competitors) will have to shut down leaving them as one of the few still standing.

CBS sucks. no one watches them, let alone listen to them…

While I am no fan of the RIAA I must admit that Independent record labels and their artists need to be compensated for the music they create and, very simply, the rates were set in a fair public forum where both sides presented their case. No one was excluded from this process. Labels and their artists should be paid fairly.

The DiMA trade organization represents large companies like Yahoo and the large venture capitalists who support companies like Pandora, Last FM, etc.. These venture capitalists do not care about music and are just looking to make profits from music. DiMA is using small webcasters and public radio as a shield for their cause, which is to increase the value of their member companies and their profits by paying low rates to artists and labels. The SaveNetRadio.org news release of May 23rd “rejecting” (by the way SaveNetRadio.org is not representing the small webcasters in negotiations) the extension of SWSA rates for small webcasters discusses how “under this proposal, Internet radio would become a lousy business, unable to compete effectively against big broadcast…..”. Huh, what happened to their argument of a month ago that they wanted to protect the kid who loves to play and listen to music? Those real music lovers will be covered by the small webcaster rates. Do people who want to “invest” in Internet radio have a greater claim to having a worthy investment than artists who create music and deserve to be paid for their creativity and record label owners who’ve invested in producing the music?

I don’t think so.

@Stephen: You quote royalties of 3% and 5% but that’s percent of what?

Somewhere I read an actual dollar amount per song per user that it will cost internet radio stations in royalties. I’m curious to how that compares to the average amount per song per user for the average city radio station.

i ‘m banning and boycotting myself and everuthing i do for th erest of my life as a statemnet about something really profound, soon everyone join the boyott and my site will experience the shunning that harrison for did in that amish movie—–i will cone thru this self inflicited hardship with a deeper underswtanding of nothing…..

FYI - TargetSpot (not TargetPoint) is the name of the company that facilitates streaming audio advertising and has received investment from CBS.

Personally, I would rather have Last.fm keep their stations on. Why should they be concerned with US affairs when they are based in Britain (regardless of the fact that they are owned by CBS) Last FM already has to pay such royalties at a higher rate than that proposed in the US, so it isn’t as though that they would get any profit if these rates were blocked. CBS, a company dedicated to spreading their products through the net (youtube, their online video service InnerTube, last FM) would probably find it in their best interests to keep the stations on as well. And there is of course the subscribers to LastFM. Why must these paying customers be punished for something that doesn’t effect the company their paying, as well as disrupt the service their paying for.

Looks like Last.fm won’t be participating in the protest after all. I write about it in my blog post here: http://mediacritiq.blogspot.co.....ernet.html

Hey “bop - ass”

thanks for the 4 updates on all your comments ; no one cares how you spell you name.

-RB

@#57, Stephen:

“Somehow I get the feeling that most of the commenters (and Duncan) don’t really have a grasp on this issue.”

“In the U.S. neither internet nor terrestrial stations pay royalties for using the performance (i.e., royalties to the singers/musicians).”

Of *course* internet radio stations pay performance royalties today. That’s what SoundExchange is for. What’s at issue is the obscene increases in royalty payments being called for.

“The new royalties would simply bring internet radio in line with what is done for radio in the EU and other countries, and compensate performers for their recordings. Isn’t that fair? I don’t see how anyone can have a problem with this.”

The problem isn’t not wanting to compensate performers. Internet broadcasters WANT to compensate performers (even though, due to the way SoundExchange operates, the “long tail” artists that many internet stations play get next to nothing). The problem is that the rates go beyond most stations’ total revenue. And that’s just (retroactively) for 2006. The rates go up 37.5% from there in 2007, 2008 and 2009 will be about 28% more each year and 2010 goes up 5.5% from there.

The UK has rates based upon a percentage of revenue. The US used to too… that’s what the CRB ruling does away with. I wish that internet radio *could* be brought back in line with what is done for radio in the EU and other countries that have a rate of 3% to 4% of revenues.

@Stephen (#57)

“In the U.S. neither internet nor terrestrial stations pay royalties for using the performance (i.e., royalties to the singers/musicians).”

This is not true. Webcasters have been paying performance royalties since the SWSA of 2002.

This discussion is about the CRB rates set for performance royalties for the period of 2006 - 2010…rates which in their second, third, and fourth year (2007, 2008, and 2009) increase 37.5%, 27.2% and 28.5% respectively. How many businesses do YOU know (besides Google) that can increase their total revenues 37.5% year over year?

Of course, any number of positions can be taken, and arguments made on either side of this debate. Here’s a few points I’d like to add (possibly reiterate):

1.) The music industry is hardly in a position to lecture webcasters on the efficiency of their business models. One of the primary reasons the US music indusrty is in this situation to begin with is their failure to adapt to market demands. They chose to litigate rather than innovate, and thereby missed out on their opportunity to shape the future of music distribution in the digital era. These royalty rates are a reflection of that missed opportunity.

2.) If the performance royalty rates for webcasting are so fair, why did a separate CARP (Copyright Arbitration Royalty Panel) determined that 7.5% of revenues was a “fair and balanced” rate for Satellite and Cable Radio?

3.) Many small webcasters showed up for the CRB panel discussion, asking that they keep a percentage of revenue model. The CRB rejected ANY percentage of revenue model for internet radio, even though a previously established rate existed in the SWSA (which, btw was set at 12% of revenue for digital performances, a rate that was higher than most of the EU and Canada for performance royalties. ASCAP and BMI royalties were / are paid above and beyond the 12% figure.

4.) The “willing buyer / willing seller” clause of the DMCA is flawed language, inserted at the behest of lobbyists for the music industry, and is overly vague. Obviously, you cannot establish a rate that would have been negotiated between a “willing buyer / willing seller” in a situation where there exists no willing seller, only willing buyers. This clause puts all the power in the hands of rights holders without balancing the public interest, or allowing for economies of scale. Here’s a take on John Simson’s milk analogy.

In a willing buyer / willing seller relationship, a seller has milk for sale. He’s willing to sell it for $X. A willing buyer says he can’t sell the milk at $X because consumers won’t pay $X for it, when a competitor sells it for $Y. So, the willing buyer trys to negotiate a lower price in an effort to make up in volume what he cannot in price. If the willing seller says no…the willing buyer has the option to find another willing seller who WILL sell at $Y, and maybe even offer volume pricing discounts, while the seller that said no gets nothing (ie, loses the sale). It’s how the market works.

The problem with the willing buyer / willing seller language in this instance is that if a webcaster cannot negotiate a rate with SoundExchange, where else can they go? Who are the other “willing sellers”? The only option available is to go to the labels directly to negotiate rates…which is what deals the killer blow to SoundExchange’s argument. Unlike SoundExchange, the labels are under NO OBLIGATION to split the negotiated rate 50 / 50 with the artists. So, by forcing direct deals, artists could actually LOSE MORE MONEY than they would have otherwise received under a more fair royalty scheme.

5.) A percentage of revenue model (like that set for Satellite / Cable radio) is a win-win. Webcasters benefit by getting a rate that allows them to grow their business, receive further investment, and still compensate artists and music composers for their works. The music industry benefits because Internet radio provides access to a much wider array of music and demographics that are currently underserved or not served at all in terrestrial “broadcast” radio, which means the potential for future growth in revenue for the music industry is tied to the growth of internet radio (which the RIAA and SoundExchange contend will be exponential in the coming years). So, really, it’s only common sense. 7.5% of $500,000,000 is $37,500,000 (the $500m figure was used in the CRB proceedings as an estimate of the current value of the entire webcasting industry). 37.5% of nothing is…well, NOTHING. So, while one could argue that “businesses that don’t have an effective business model go belly up”, it would be naive to ignore the facts that, a.) These rates are established by a GOVERNMENT REGULATORY BODY, and are set arbitrarily rather than negotiated, b.) that these rates are established ex post facto, and in absence of any “real” market forces, and c.) it is in the best interest of both artists and the music industry to work with webcasters in good faith. I have yet to see where any major webcasters are asking for a “free-ride”.

Last.FM have responded…Judge for yourself.

http://blog.last.fm/2007/06/25/make-some-noise

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I really don’t think it has anything to do with them being a British company. I think that it is directly related to the fact that they have been bought by an American corporation and that corporation has ties to a big label - Sony BMG.

It might have been a conflict of interest and probably to their financial detriment if they had angered the label by participating in a protest.