Monday, May 19, 2008

Internet Radio Returns

Long-time readers of this blog know that I've been vocal in my support of Internet radio. For those who came in late, the Copyright Royalty Board who sets the royalty rates for webcasters enacted a ruinous rate hike this past year. In a nutshell, the Board only listened to one side -- the SoundExchange (ostensively representing the artists -- but still very much a creature of the RIAA that created it). The Copyright Board steadfastly ignored the testimony -- and, more importantly, the math -- of the webcasters (including NPR) that explained that a royalty rate that could take up to 150% of a company's income might not be a viable business model.

And that's pretty much where things have been since January, with the SoundExchange having the power to shut down the majority of netcasters by just calling in their tab.

But this past week a bill was introduced in both the House and the Senate to change all that. S.1353 and H.R.2060 move to overturn the ruling of the Copyright Board and institute a more equitable rate -- basically about 7.5% of a netcaster's income.

This is higher than the previous rate, (and everyone agreed the rate needed to go up), but at least, this is reasonable. If a web caster's only bringing in around $12,000, then artists will get $900. But if they're making $1.2 million, then the artists make $90,000.

Now that works much better than the current bone-headed rate. Because right now a webcaster that makes $12,000 could be on the hook for $18,000 -- which means they'll very soon be out of business and the artist gets zero. And the netcast never grows to the $1.2 million level, and the artists trade $90,000 for zero.

So this budding industry still has a chance -- depending on this legislation and the support it receives.

Time for a little democracy in action, I think. Next post I'll show you how I'm putting Open Congress to work on this.

- Ralph

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