Monday, August 18, 2008
Sword of Damocles hanging over netcasters just slipped a little.
Pandora.com's announced they're rapidly approaching the point where they'll have to go dark. Why? You've read it here and many other places as well (I hope). SoundExchange, the agency that collects artist royalties from Internet broadcasters and streamers jacked up the rates past the point of sanity. While no one argued that the rates needed to go up, the industry was stunned when SoundExchange proposed (and the Copyright Board promptly agreed) that a 300% to 1200% jump was fair -- even though it meant royalty rates would outstrip income for most netcasters.
The old system was scalable. A percentage of a netcaster's income was paid to the artists. So niche netcasters catering to a small audience paid a small amount, and popular services with many listeners paid a large amount. And there was a reason for netcasters to grow their audiences. The more listeners, the more income -- and the more the artists got.
Under the new system, it doesn't matter. Unless you have a massive audience, you can't bring in enough to pay the royalty fees which have a pretty steep minimum fee. And when the service goes dark? Then no one gets any money, and how does that serve the artist?
I'll share my letters to my Congressmen encouraging them to support S. 1353 and my Representative to support H.R. 2060 in this blog.
No one's asking for an industry bail-out. As MC Lars said:
- and not by leveling Internet radio.
Day 65 of the WJMA Web Watch.