Yahoo, as well as Pandora, MTV, Real/Rhapsody and many others are honoring the “day of silence” today in protest of the ridiculous new royalty rates for Internet radio stations.
The big music labels have lobbied to get the U.S. government to really stick it to Internet radio stations, when terrestrial radio stations pay nothing to play songs and Satellite providers pay a greatly reduced rate.
There is little Internet radio stations can do to fight back except protest, and just about everyone is on board for a day-long shut down today, June 26, 2007.
But not Last.fm, as we previously reported.
Is this a result of their recent acquisition by a huge U.S. media conglomerate, or was it simply a decision made “long ago” not to participate? See Last.fm’s defense here, and you make the call.
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Hey, c’mon don’t be so US centric. Have you even read last.fm’s blog post?
They had to cope with similar things right from the start but now that it happens in the US it’s suddenly a problem that needs worldwide attention.
You know, the good thing about the internet is, that it’s not just available in the US. Sometimes it would be helpful if american bloggers/writers would remind themselves of that fact, while publishing.
If internet radio relies on music to survive and music relies on people paying for it to survive, how can you blame the music industry from wanting some of that revenue.
Michael, If i earned a large amount of revenue by using articles from this site and your copyrights, wouldn’t you want your cut?
If internet radio’s business model is outmoded and based on free or very cheap copyrighted content, so it goes.
Would you take the same stance if Warez sites were having a moment of download pause because software companies were (gasp) overcharging them for their products? What about video sites that show bootleg movies?
The music industry is easy to kick when its down, and they’re easy to pick on. Fish in a barrel.
If the internet radio sites can’t afford their rates, don’t use their music. Play up and coming bands that would be thrilled to have their music played. Play royalty free music. Do something other than protest, we all know how well protests have worked in the past, and besides.
I notice in their response that they might be facing higher rates than in the US, guess how many people will support them if they get into a fight on that: ZERO. It’s disgraceful.
Flo
The internet goes worldwide and we are all affected by this (I’m in Australia + I wrote the linked post/ prior coverage on TechCrunch), this is about industry solidarity no matter where you are based. Personally I’m considering cancelling my Last.fm account over this, I won’t support a US owned company which may well be acting in a way that kills the competition. Choice works both ways. I chose to say Last.fm has got it wrong.
Its really annoying that by simply not taking part in a protest last.fm is labelled a ’sell-out’. Have they done anything else to sell out their users? Isn’t it reasonable that they might see a different way to deal with the problem?
Unfortunately, this smells of the kind of ‘gotcha’ journalism that has so infected our political system. Never mind the meat of the issue… what’s important is how you look. Make sure you say the right things, look the right way… nothing else really matters.
Of course, the whole process is pretty stinky… hard to believe that in this day and age, we have the government setting prices for music. I hope this whole thing gives pause to those who want government more involved in the economy.
“If the internet radio sites can’t afford their rates, don’t use their music. Play up and coming bands that would be thrilled to have their music played. Play royalty free music”
It doesn’t work that way. Sorry; try again. This is a flat ‘industry wide’ fee that’s supposed to be routed to each artist (minus a processing fee from SoundExchange of course), whether they want it or not. EVERY station is charged by the RIAA’s strongman, whether they play RIAA represented music or not.
As for the rest of your ramblings… it’s not even worth the time for a point-by-point.
well, streaming music on their site is “very problematic” now (among other things, but that’s another story for another time), so maybe it will be a de facto day of silence for them anyways.
http://www.last.fm/forum/21713/_/51596
From their blog…
“We do not want to punish our listeners for our problems, period.”
Doesn’t make sense at all!!!
Only time will tell as to what will happen when the prices rise so much that they are not able to provide service to its listeners and make profit at the same time….
this is not last.fm “killing the competition”, this is their competitors being made to pay the same rates last.fm does already. Name me one example anywhere where a company protested to keep an uneven playing field tilted against them.
this is not news and smells like bias to me.
“guess how many people will support them if they get into a fight on that: ZERO”
About the same as if last.fm HAD supported this - American companies don’t support movements like this in other countries - never have.
Not that I blame them, there are problems like this in countries all over the world, if we had a day of action for every problem the internet would never be on.
How about a no search engine day in support of China’s oppressive search restrictions? - no? - what a surprise, because it doesn’t affect Americans.
They can spin all they want. Bottom line: I’ve uninstalled the last.fm player. Good riddance to them.
Last.FM’s defence is coherent and sensible. As a Londoner who has been a Last.FM member for years, I completely support their stance.
I have noticed a definite bias against Last.FM in Tech Crunch over the last number of months. Put down asides, sniffy references, a generally negative attitude to what is one of the web’s most successful music sites. The number of times Tech Crunch has put out over the top puff pieces on Last.FM’s (usually pretty poor in comparison) competitors is startling.
I think the real question here is this : Why is Tech Crunch so consistently negative about Last.FM? I’m certainly curious.
Here we go again guys. You’re getting quite boring at this point.
But i admit that this useless controversy sure is bringing good page views to your site uh?..keep it going until xmas is my advice
They’re a UK company, entirely unaffected by the US copyright nonsense, pay through the nose, and have never had the option of a blanket license.
But of course all of us have to tug our forelocks to whatever Mike Arrington considers important in his own back yard on any given day, even though he’s repeatedly shown nothing but utter contempt for readers on this side of the Atlantic.
Meh. What else you got?
it seems last.fm SUCKS BIG TIME!!!
I don’t know if what they did is good or bad in ethics terms, but its clearly a marketing mistake
As the editor of a music website, I know how much Last.fm is used by many other, similar websites to form a semi-online radio station (or in layman’s terms - a playlist of picked songs).
If Last.fm had decided to go offline, then yes, it would be great for the readers of this site and general technology buffs - but for people who generally use the site they won’t have an idea what it is all about.
Lets put it this way. Say you didn’t work in the media and one day the New York Times decided - without too much notice - to not print one day as a protest at high print costs. You want to buy your paper. You have no idea that they have stopped printing. You become confused. You buy something else - and The NY Times loses your custom.
If Last.fm has switched off their servers it is without doubt there would have been ’some’ press coverage - but I sincerely doubt every member of Last.fm who wanted to stream music would read it, or the reasons behind it that would have been undoubtedly posted on the homepage. They would then be lost customers.
Because remember while it might be a great short-term stunt, the next day, well, it all becomes long-term. So, well done Last.fm for not switching off.
The easiest way to download music and video from IMEEM and YouTube as MP3 or AVI: http://IMeemYouTube.podobne.pl
Yahoo hasn’t turned of their radio (at least for subscribers). If you go to LAUNCHcast and then pick a genre, they are all still perfectly playable and streaming.
so this entire “Yahoo good, last.fm bad” angle is totally fabricated.
excuse me, “turned off”
Ow my, look at all those self rightious idiots cancelling their last.fm accounts, have you tried deleting your limewire accounts and started paying for the music in the first place? Wake up to the realworld people!
As for last.fm, they will continue to have my payed support !
I agree with Keef. The Last.fm response was a good deal more coherent than the conclusory posts we’ve seen from Duncan and Mike. Mike especially doesn’t really engage any of the issues raised by Last.fm, but instead sneers towards Last.fm’s recent acquisition as the likely motivation.
That’s excellent analysis guys. After reading the comments here and on the Last.fm site, I’ve got a question to ask those faulting Last.fm’s motives. How would Last.fm joining the Day of Silence change your opinion? If they’re really just hoping to profit from the failure of small Webcasters, then wouldn’t you view their participation in the DOS as a fig leaf atop their evil profiteering hearts? Would you even view it as a sincere gesture? What’s the significance of it?
Also, the next time a group declares a day of “jump in the lake,” how are we all to handle it? Who should bring the tar and feathers and who will wield the electric prod against those still on land?
I’m not saying such gestures are never appropriate or meaningful. But turning them into an occasion for recrimination sullies their meaning and diverts attention away from the very cause at stake.
How does kicking yourself in the balls help your cause? Do you think the people who determine the royalty rates listen to internet radio? do yout hink they care? of course not, or else they wouldn’t do what they did. day of silence? they’ll say, “fine, go silent forever…” pointless protest for the sake of protest. think i’ll listen to last.fm more than usual today.
heck…with the multitude of problems last.fm has had since the weekend…they’ve one upped everybody by turning it into a weekend of silence.
I’m a fence sitter on this one but found it funny they say they made the decision a long time ago…yet just now decide to speak up? Were they hoping to ‘escape’ without having to mention their stance?
Yeah, LaunchCast Plus by Yahoo! is working fine. The only indication (so far) of anything is that all the “hot stations” on their website are “see-www.save-internet-radio” or whatever.
Which proves that Yahoo! has built a successful model that at $36/year is able to make money providing me with 6-8 hours a day of uninterrupted music 5-days-a-week.
So I guess it comes down to making sure you have a sound business model. (Though retroactive upcharging is lame.)
I guess you get what you paid for. I get a non-event commercial-free music-filled day.
To everyone letting Last.FM off the hook for being a so-called “UK company”, you need to check your history. The English have always supported American companies in their fiscal struggles. Don’t you remember when all those Brits dumped tea into the Thames in support of our taxation protests back in the 1700’s?
This is a global issue. Legally, the rates are supposed to be paid where the listener hears the music. Doesn’t anyone remember that Pandora recently stopped all listeners outside the US from tuning in?
Where are a majority of Last.fm’s listeners?
All internet broadcasters are in the same boat.
‘playable search’ to the rescue…
http://digg.com/music/Internet.....the_rescue
Sound Exchange will cut people side deals which I’m going to guess *PROBABLY* has happened w/ Last.fm. It would be nice if techcrunch could shoot them a quick email and ask them this question EXPLICITLY. So nasically if Pandora, Live365 and everyone else goes away then CBS is happy and the company it just bought has become more valuable.
There is also some debate as to whether these fees will be pro-rated somehow. Last.fm has struck deals with Warner and EMI (and have been negotiating w/ Sony BMG and Universal). These deals may ALSO lessen their burden since they may not be required to pay the new exorbitant rates for content by these labels.
This whole spiel that Last.fm is giving about being fair about paying artists is pure BS…. Sound Exchange can’t even FIND Ted Nugent, Warren G, and Kraftwerk to send them the royalties they supposedly collect on their behalf.
This a naked, competitive move, plain and simple. I agree with others here in regards to there being a heavy marketing cost to bare here too… but since I’m guessing Last.fm has cut a side deal (and even if they havent they are in bed w/ the majors w/ their big licensing deals) they simply cannot bite the hand that feed.
Actually, Radio stations do pay for the songs they play, but it’s a flat fee to a company who then pays the royalties to the individual artists. The flat fee is just estimate of the amount of songs played and the royalties for each song. Either way, this whole situation is terrible.
If the radio stations dont have to pay -
- How possibly can - Sirius have to? and then internet?
- I dont understand the double standard.
I am happy Last.fm is not taking part in this silly propaganda. Techcrunch readers need to grow up.
I have a Sonos digital distribution music system in my house. One of the great things I love about Sonos is Internet Radio. This gives me a chance to listen to new artists in my home in a form factor not as lame as a PC and PC speakers, and get turned on to new artists.
I think one of the major reasons the RIAA and SoundExchange have been pushing for Higher Internet rates is that folks like me have been able to utilze it to get turned on to new artists who maybe haven’t sold their first born son and the next three sons they make to the music labels, as well as artists who are independant. In short, Internet Radio let’s user’s find great music that is not programmed by the selfish penny pinching executives at these labels. They want us to listen to music which reaps the most profit for them, and this converance of art and business needs torn apart.
By not supporting the whole affair, Last.FM has done most of it’s brand name an injustice. It’s very important for all internet radio stations to band together to stand up to these selfish executives who want more for their pockets than the artists themselves, and the route the took is the wrong one, and one that will likely cost them as services they provide become more of a commodity.
Last.fm is basically saying they don’t care if they are the last.fm left on internet radio. That might be fine for them, but certainly not for it’s users.
For the record, terrestrial radio stations pay a yearly fee based on how much music they estimate they’ll play - and how many listeners they’re rated at. It’s basically the same model as the one about to be imposed on web listeners - just that now it’ll be exact billing instead of estimated billing.
The analogy above about the NYT is probably the best one I’ve seen in this debate.
Jeremy,
That’s not correct. Terrestrials pay songwriter royalties to ASCAP, BMI, and SESAC as do online radio and satellite. However, terrestrials don’t have to pay ‘performance royalties’ to SoundExchange that internet radio and satellite have to pay.
That is a battle that is currently starting to brew. Expect a big one - NAB vs RIAA
“Server not found
Firefox can’t find the server at http://www.last.fm.”
Hmm. I guess someone silenced them though.
Obviously there are no musicians reading this.
It’s clear (to me at least) that music consumption is moving from a “pay per purchase” to a “pay per listen” economy. It’s critical musicians are properly remunerated for their work, which in this environment means paid each time their songs are played.
Virtually every other country in the world has a performance royalty; the US does not. This was grandfathered in by the broadcast industry here years ago. When you’re talking about ASCAP/BMI, you’re talking about royalties that go to the songwriters, not the performers. Separate issue.
The rates that the current CRB has established are more than fair; there’s also a “small broadcasters exception” that allows smaller broadcasters to pay a percentage of their income as opposed to the per-listen fee.
Just because someone claims that they can’t operate their business at these rates doesn’t mean that the rates are unfair. They’re not. They’re entirely reasonable. If someone wants to run a radio station and not charge for it, that’s their choice. It doesn’t mean that the artists should therefore not be remunerated.
As a musician and someone who has worked in the streaming media industry since its inception, and someone who runs a decent sized media hosting business, I think this day of silence is misguided. When this issue first arose five years ago, hosting charges were 10x what they are today, and people weren’t prepared to pay for _any_ content. Nowadays, folks have no problem subscribing to Rhapsody, Last.fm, or any other number of music services. The landscape has changed. Musicians should benefit from this.
If you can’t make money with your streaming business, while paying for the content, then there’s something wrong with your business model. Capping on Last.fm for not participating in this is laughable.
Few points of order for all you hypocrites:
1) Last.fm is UK-based, but US-owned. The difference: they follow UK laws, not US laws. They aren’t affected by the rates. Furthermore, the rates themselves are based on where the *site* is located, not where there listeners are. The other way is impossible to do, because then you’d have to account for proxies, etc, to determine rates.
2) Last.fm *already pays the higher rates*. They’re not striking because the new rates don’t change anything for them. It would be like Google going on strike so that all the other search engines could develop their ad practices. Last.fm’s competitive edge is that it has already adjusted to the new cost system. Why give up a competitive edge when you don’t need to?
3) Pandora blows. It used to be good, but now it’s just a sellout.
4) I couldn’t listen to my music today because….you don’t want to pay for it? How does that make sense? If you don’t want to pay for their music, don’t use.
You’re going to cancel your last.fm account because… They’re going to continue providing the service that they’re supposed to? Right…
@ #23 dave
our decision not to take part was taken when this was first announced. we never went on record for saying we would. most radio stations that do participate signed up as soon as it was set up, and their taking part was then subsequently publicized.
we do make a lot of decision obviously and it seems like on this one people wanted an explanation so we gave one. http://blog.last.fm/2007/06/25/make-some-noise
Why not block stream rippers.
It’s not about not wanting to pay for the music, it’s about not being bankrupted. The argument isn’t that we don’t want to pay, the argument is parity.
RE: Small Webcasters “exception”, it’s a temporary solution to a problem that won’t go away. Do we REALLY want to REVISIT this in 2010? Just like we went through this in 2002? It’s like putting fix a flat in a tire…you still have to eventually just buy a new one or find if the one that has a leak can be salvaged. To the musicians, how would you feel if you were being told that as long as you’re unsuccessful, you don’t have to pay any taxes. Webcasters, under this “exception”, are basically being penalized as soon as the actually do achieve any level of success. The more these stations are being listened to, the more expensive it is to keep them running. If you don’t care about lots of people listening to the stations playing your music, then that “exception” is great. However, if these stations are put out of business because they’re pouring 80% of their revenue, then you’ll see even less in royalties than you currently are.
@smack and @jorge:
nobody is arguing that artists shouldnt be getting paid. The reality is 50% of the sound exchange fee goes to the artist and 50% goes to the label. Of the portion that goes to the artist: have you seen the LOOONG list of artists that sound exchange “can’t find” to give them their money?
They also want to charge $500 for each “channel” or stream on services like live365 to cover “administrative costs”. This is on top of the royalties. Tell me it costs $500 to “administrate” an extra row in a database. It’s BS. Who is getting that money? Not the artists.
Pandora has also published some nice numbers on the fact that a large chunk of their listeners end up BUYING MUSIC they hear on the site.
In never fails to amaze just how intent the record industry is on destroying themselves.
@10 Good. One less person on Last.fm makes a faster service for all
@ #40 Felix…
Hope you didn’t think I was insinuating that you changed your stance…that’s not what I meant.
I only found it odd that the response came so late. Surely questions about this came up from members/media/bloggers before TC’s post yesterday….and maybe it did and I just missed it..
I think Duncan and some others here and at the last.fm blog do make a good point about showing solidarity…even if you don’t agree with day of silence…which is all fine and dandy with me…some kind of recognition on the last.fm site could have gone a long way…Did it really have to be either/or? I think it was somebody at your blog that mentioned Shoutcast not participating but put up a banner to show support.
@ smack #37
“Virtually every other country in the world has a performance royalty; the US does not.”
This is not true. Webcasters in the U.S. have been paying a performance royalty since 1996! It’s this kind of mis-representation of the argument that Last.FM have employed to muddy the waters in this debate. The DOS is about a FAIR rate, not no rate at all. AS an artist myself, and an owner of a label which stands to gain considerably from the new rates, I STILL OPPOSE THEM because they strangle diversity….Homogenization will be the result of this kind of action, and honestly, who wants another sector of our industry run by a small group of giant companies??
I feel it’s necessary to quote user David Young, who made clear, concise arguments against this decision yesterday on TechCrunch’s other post on the subject:
“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”.”
Ahem.. currently last.fm doesn’t even bother pay PPL. And having just been bought for $280million dollars by CBS, it’s in last.fm’s best interest to watch all of the legal US services destroyed to pick up the pieces later.
The lesson learned is that only illegal services like last.fm and youtube that doesn’t play by the rules will ever win in the entertainment business
Anyone find it funny that last.fm was kind of “forced” into a day of silence today? Has anyone tried to access it? It’s servers are flooded with additional users and it’s now rendered useless as the page refuses to load (and if it loads, good luck trying to get a music stream going).
Looks like they ended up joining in the day of silence after all, even if not by their own choice.
@ Doug #47
I’ve been logged into the last.fm website, and listening to Last.fm radio since 9am PDT without glitches or buffering.
Not sure what’s happening on your end though.
The site wasn’t working for me last night, but today it’s purring.
If an Internet radio community protested in a forest, but no one was around to hear it, did they really protest?
Seriously, who gives a f%ck about Internet radio? Not enough for this protest to make an impact for sure…
Actually Russ has stated THE REAL reason why last.fm doesn’t participate in the by Duncan linked forum thread:
We’re unable to participate because it may compromise ongoing licensing negotiations. I’m sorry I can’t be more specific, it annoys me too.