Friday was a sad day , no, make that a shocking day in the webcasting community. On Friday, the Copyright Royalty Board finalized the webcasting royalty rate based on a cost per play, with a 500 dollar minimum per channel , while also completely eliminating any percentage of revenue options. In a nutshell it was the day the internet music died.
Rather than going through the entire obituary, I will defer to KurtHansons wonderful RAIN site for all the gory details.
I remember setting up servers from progressive networks and xing to stream AudioNets first station, KLIF in 1995. I remember creating Christmas stations, Elvis stations and letting people program their own internet radio station. Then as with now, the vast majority of streaming took place during the day in the office.
Everything that is happening with video now, happened first with audio. Below isnt pretty, but its a reminder of where we started .
Kurt Hanson and the band of small webcasters had their chance in 2005 and 2006. They failed to impress anyone then, and they failed to do the \”math\” required. Yes, this is bad, but they did a horrific job articulating to the CRB and this sealed their case. Now it is TOO late. Also, read the ruling…the channel fees are recoup-ble against royalty payments, and thus, insignificant. Please don\’t listen to Kurt, as he is most often wrong. Instead, follow the actions taken by the CRB, the labels, artists, and webcasters. They had their chance. As an investor in media and content companies…DO THE MATH…PLEASE! AND, DO IT WHEN IT IS IMPORTANT. NOT AFTER THE RULING.
Mark, as usual, you were ahead of the curve on this. I received Rain\’s update email, and then read the Royalty Rates that were finalized by the CRB. Rather than be overcome by sadness, I will try to strategize a fitting response.
The RIAA has, by virtue of their successful lobby efforts, once again made sure that the Artists are paid some fractional amount, while both limiting the exposure for the Artists and protecting Radio Terra Firma.
It will be up to a large and strong group of Artists who determine that, rather than allow a Major Label to license their material to select markets, the Artists can restrict said licensing .
If U2, Tom Petty, Aerosmith and Greenday ( or pick \’em )decided to start the movement, by licensing exclusively to Internet and Satellite Radio, on an exclusive basis, they would get paid, played and exposed to fans with a minimum of commercial involvement .
Wait. Does that include music use in videos? If yes, the prices mentioned by Kurt Hanson seem to be quite low actually.
I just calculated one of my favorite videos on Google Video that uses a song for a karoke type video. 6,612,126 views as of now x $0.0011 per performance = $7,273.34. While this seems to be expensive, we should put it into perspective:
Even if Google gets just a CPM of $2.00, they still have a revenue of $13,224.25 and a profit of $5,950.91
I think this pricing is fair. It gives every blog owner a chance to at least break even (i.e. do not lose money on his blog) as long as it has some traffic.
You are correct. Another in a long line of \”sad days\” when it comes to recorded music these days. Last night I attended The Shins concert here in Dallas. I was trying to think the last time I heard a Shins song on a Dallas radio station. Never came to mind. If it were not for satellite or internet radio stations, artists such as this would not get the exposure to draw 4,000+ at a concert. Yet, if you were to ask them, they would want you to play your music as often as you would–and for free. Why, marketing! And yet, do the terrestrial stations pay these same rates. No.
The RIAA rails against DRM free music in the guise of artist protection. CARP makes it impossible for the small/mid webcaster to survive. Who is protected…not the artist. Sony, Universal, AOL, Yahoo, Clear Channel, etc are the ones that are protected Who loses. The artist and the music lover.
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