SoundExchange Backs Off DRM for Webcasters

Radio Free Europe writes "The big news is not that SoundExchange has repackaged the same royalty proposal that small webcasters rejected in May, but that SoundExchange has dropped its previous insistence that DRM be a part of any agreement. 'On the bright side, it doesn't appear as if DRM is part of the terms this time around. Previously, SoundExchange stated that webcasters who agree to the deal must actively "work to stop users from engaging in 'streamripping'." This began a war of words between the Digital Media Association (DiMA) and SoundExchange, with DiMA accusing SoundExchange of using rate negotiations to push mandatory DRM. SoundExchange's letter leaves the much-maligned streamripping issue out of the discussion, clearing at least that hurdle.'"

How to Run a Company into the Red

SoundExchange has no idea how to create a viable business model. The money is not in charging the broadcasters, rather its in free promotion coupled with aggressive web marketing.

They should cut a deal with broadcasters that offers free music in exchange for relevant ads and links to store fronts were a listener can purchase the music. They should also offer discounts on packaged songs that they want to push on the market.

They could be influencing lesser known genres such as indie and techno, and popularize and brand a new line of music.

They could completely rule this new medium and reap the rewards, instead they are going to force broadcasters overseas and lose even more money to pirates.

I am just sitting here shaking my head in disbelief at the shear stupidity of their business model.

They know exactly what they are doing.

SoundExchange has no idea how to create a viable business model. The money is not in charging the broadcasters, rather its in free promotion coupled with aggressive web marketing. They should cut a deal with broadcasters that offers free music in exchange for relevant ads and links to store fronts were a listener can purchase the music.

You are kidding?

SoundExchange has been given monopoly status. Everyone has to pay fees to them, and this tiny concession is meaningless when you consider the big picture: they get to pick and chose who runs internet "radio" stations. They can block all but RIAA members and force membership. As soon as they are sure of control, all the concessions will be undone and prices will be hiked up to terrestrial broadcast levels. Kiss variety, choice and artistic freedom goodbye.

It's a license to extend their little analog empire into the future. They are going to keep limiting who the "winners" are. A small number of acts will continue to be "pushed" as you put it, at the exclusion of all others. Bands that want to give their music away and advertise in the way you think would be best for them are not going to be able to do it. They are going to have to crawl on their knees and "prove" themselves in some "target" market, just like they do now, before internet radio stations will "risk" playing them. Without the odious fees the old industry is going to impose, the costs of running a web broadcast are very low, there are no risks and everyone is free to give their music away.

There is absolutely no justification for this. There is no scarce public resource involved and therefore no reason to regulate the internet. Your rights have been sold and the RIAA is going to keep raking in the cash at everyone else's expense.

Re:They know exactly what they are doing.

Your rights have been sold and the RIAA is going to keep raking in the cash at everyone else's expense.

I wish they were sold. I might have collected a healthy profit. No, what happened is that they were given away... by us.

Dump SoundExchange artists instead?

SoundExchange http://en.wikipedia.org/wiki/SoundExchange [wikipedia.org] is a subsidiary of the RIAA. Why do webcasters, radio stations and everyone else continue to play their game? There is a lot of good music out there; Always has been, but now it's a listener's market. The web means we no longer need the RIAA to choose which acts we should listen to. So why don't these guys, instead of waltzing with the RIAA, tell them to get bent and promote other artists instead?

Can you imagine the looks on the faces of the RIAA Shill Lawyers when the webcasters say: "You're absolutely right. We're not going to give a single one of your artists a second of airtime again. Now get out before we call the cops. Watch that step. Ooooh that's a dozy! Doris, if he doesn't pick himself off the floor in thirty seconds have security bring the Rottweiler. Oops sorry I trod on your hand." You get the idea... So webcasters, stop acting like wusses.

Sox doing DRM?

Good grief, why would Sox get involved with DRM? Maybe to add some echo?

DRM is dead!

This doesn't surprise me. DRM is dead. How could SoundExchange possibly require it when most of the RIAA members now favor retail sales of DRM free music? Even WalMart is getting into the act. Why? because they found that they can charge MORE for DRM free music and the consumer will pay it. It only took the music industry TEN YEARS to figure out what most of US knew all along!

Soundexchange???

So, I've heard of Soundexchange but I don't know who they are and why we have to listen to them. What do they have to do with internet radio stations who play non-RIAA music. I ask that because I heard that they put the "squeeze" on everyone, no matter what they play. NPR has even been talking about them.

SoundExchange should be before the RICO judge

because its just an extortion racket.

Let me get this straight...

SoundExchange are going to collect $50k from each and every WebCaster radio station.

Then the artists have to find out wether they played their songs, or not, from every single WebCaster. (If you believe people are consistently that diligent, I have a bridge to sell you in Brooklyn.)

Then the artists have to figure out how much of those $50ks SoundExchange might owe the artist. (Some of these guys and gals can play great. Math, they're not so hot at.)

Then the artists have to try to collect, less the euphemistically called administration fees of course (can you say 110%.)

Get the "Piperazine"! I'm looking at a nastytape worm here.

Agreement reached says SaveNetRadio.org

I was digging around and just noticed that SaveNetRadio.org is claiming an agreement has been reached.

Here is the press release [savenetradio.org] (pdf)

And more on their homepage [savenetradio.org]

Note: it looks like this is just one detail that has been agreed upon but negotiations are ongoing.

Logical business move

Sweeten the deal, get it signed. We can change it to include DRM later.

Doesn't surprise me

For all its bluster, SoundExchange is an organization with about 30 employees. They are set up to collect and administer royalty payments, not engage in large-scale litigation. Even if the broadcasters completely stonewalled, I doubt SoundExchange is in a practical position to do much.

As I've said before, the music industry and the broadcast industry are engaged in a standard contract negotiation, albeit one that is receiving a good deal more press than would be usual. Strictly from an economic perspective, the broadcasters would like to receive broadcast rights with no royalties or restrictions of any kind. The music industry would like to have a massive royalty payment and perfect and absolute DRM. Eventually they'll meet at somewhere in the middle where they both figure they can make a buck. It will all work out...

Now that the RIAA's clients are dropping DRM,

it would seem pretty stupid for them to insist on it.

Re:Streamripping?

Streamripping produces a perfect copy of what was "transmitted" which can be copied perfectly ad infinitum. Recording off the radio onto tape produces a lower fidelity analog copy and subsequent generations of copying of that copy introduces more noise at each generation.