RSSSoundExchange: Is Microsoft Backing Internet Radio in Royalties Fight?
By Scott M. Fulton, III | Published April 30, 2007, 2:15 PM
Characterizing the estimated $50 million-plus that Internet streaming music providers would not pay in royalties as "a windfall to mega-corporate webcasters," the SoundExchange performance royalties collection firm, in a statement issued late last week, argued that the Inslee-Mazullo bill currently before the US House of Representatives would force performance artists into a position where they would actually owe the services that play their music.
"If passed, the bill would also result in a windfall of more than $50 million to mega-corporate webcasters like Clear Channel and Microsoft at the expense of recording artists across the country," the SoundExchange statement reads. "Because the bill is retroactive, artists would have to write checks to cover refunds to corporations whose CEOs and top executives are paid millions of dollars per year."
Even with the pending divestiture of hundreds of US and worldwide ratio stations in advance of a proposed merger with a private equity firm, Clear Channel Communications continues to operate what ratings services believe to be the nation's #3 highest-rated block of online radio services, behind AOL Radio and Yahoo's LaunchCast.
Arguing that small webcasters are only responsible for 2% of performance royalties, SoundExchange Executive Director John Simson remarked that the bill's passage would benefit most those parties who are responsible for the most royalties. "The true beneficiaries are the mega-multiplex services like AOL, Yahoo!, Microsoft and Clear Channel, which will benefit from rates substantially lower than those set by the Librarian of Congress in 2002," writes Simson. "Because the bill is so heavily favored to enrich the big webcasters, it raises questions as to who is really behind the SaveNetRadio Coalition."
Simson's statement stops short of directly accusing any of the four listed parties of participating, financially or in any other regard. Radio and Internet Newsletter publisher Kurt Hanson reminded readers today that Microsoft is no longer in the streaming music business directly. "They now offer a white-label version of Pandora, a service that would be bankrupted by the CRB decision," Hanson writes.
SoundExchange cited $360 USD as the amount which performance artists typically received in royalties for 2006. Hanson counters that this is an average fee, though he concedes that many artists actually make less - as low as $120 USD per year. Hanson's implication is that, even with higher fees, there's no guarantee that artists would actually make more; and since the amount is so low anyway, no rational person would consider it as income anyway.
"Those working musicians, as shown by the tens of thousands who've signed up for the SaveNetRadio Coalition," Hanson writes, "would rather have a thriving world of Internet radio airplay than the potential chance of a $10/month check."
Members of that coalition were scheduled to hold a protest outside the steps of the US Capitol building today.
Watching SoundExchange - themselves created by, funded by, staffed by, and more or less still run by the RIAA - point the finger and accuse savenetradio of "represent(ing) mega-corporate interests" - it boggles the mind. They've entered the Twilight Zone of spin.
It would almost be amusing, since they shelled out money for a high-priced DC PR firm to handle this. But since they're probably using funds that were collected for artist royalties ... it's just depressing.
Remember, also: It's not like those 2,000 record labels and 270 companies /signed up/ with SoundExchange to get represented - that's just what fell out of the RIAA/SE's long-running lobbying effort to represent everybody, everywhere, all the time.
All that, and they can't even distribute more than 60% of the money they take in. They're a crap organization, with crap policy, and if the artists can't realize that they're getting the shaft from all this, then, well, they'll continue to get the shaft. They're just going to lose a major, major distribution outlet in the process.
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|Can't sway me with that argument. AOL, Yahoo!, Microsoft and Clear Channel are lesser evils then the RIAA/SoundExchange. Sure they are all greedy and rather unscrupulous but AOL et al understand the importance of providing a service that the general public wants. Sorry but a court summons isn't what I want, I don't want to be sued.
It's about time AOL et al are on our side. I see this as good publicity for AOL et al.
@"artists would have to write checks to cover refunds to corporations"
That translates to: "Artists were paid in advance of the rates being finalized and they would have to give some back if this law was passed."
I believe the phrase "Don't count your chickens before they hatch" applies here.
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|Simson/SoundExchange/RIAA blew off all their credibility a while back. NOW he wants to try and act like he's representing some poor starving artists against the big mega-corps. Funny, I didn't see him sticking up for the smaller radio stations a few weeks ago!
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|So.. let's have a close-up into this:
* SoundExchange representing more than 2,000 record labels and 270 recording companies.
* to receive as much as $505 million in royalties retroactive to last year, by BetaNews estimates, from US-based streaming music providers. That revenue could rise to $2.3 billion by 2010.
* As SoundExchange explains on its Web site, 50% of royalties it collects are distributed to copyright holders, which are typically music publishers such as Sony BMG, EMI, Universal Music Group, and Warner Music Group, all of whom have representatives on the SoundExchange board of directors. Of the remainder, 45% is distributed to featured recording artists, and 5% to non-featured artists.
* Given the projected growth rate of the industry, that figure could rise to $51.2 million by 2010. Compare that to $2.3 billion, which BetaNews estimated the streaming media industry would pay in 2010
Calculator:
*Proposed by SoundExchange:
Record companies get 1.15billion in 2010, divide by 2500 (averaged) companies
460.000$/year each, just because they have copyrights (Let's not forget this is not the main income from them, or definitely should not).
1.03billion for all artists ( How many artists? is 100.000 exaggerated?) (50artists/label)
that would give 10.300$/year for each artist (Again, this is not the main income)
*Proposed by islee-manzullo bill :
Record companies get 25.6m/year divide by 2500:
10240$/year for each label/record company.
Artists get 23.4m/year divide by 100.000
230$/year.
you know... These people sell several hunderd thousands of albums if not more per artist( at prices around 20$/album ).
Do they expect to double the income coming it from the broadcasting?
To say it in another way... Radio broadcasters cannot be the employers of the music artists. Artists cannot expect (less even the record companies), to have their main income come from the broadcasting of their content.
Because if we reach that point, selling the songs/albums, or even going to a concert shouldn't be paid at any higher price than the broadcasting. Actually, it should be a giveaway then.
This is my opinion on the subject, btw.
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|"or even going to a concert shouldn't be paid at any higher price than the broadcasting"
I agree with most of your points, but this one is confusing. What they're paid, versus what they charge, are almost unrelated. The costs for touring are much higher than streaming over the net, or over the air.
That said, SE is on crack, but so far doing well with their political lobbying efforts. The CRB and SE simply want to control all revenue streams and maximize their take on all transactions. Much like lawyers when they're involved in real estate transactions.
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